4th industrial revolution: how it changes our world and how businesses should adapt?

We probably won’t surprise you by saying that we are today not even at the beginning, but in the full swing of a Fourth Industrial Revolution. Industrie 4.0, or the Fourth Industrial Revolution, is taking place today, while it is gaining momentum and consists in the development of robotics, further economy digitalization, production and services automation and the expansion of humanless technologies usage.

Germing in previously disjointed fields like artificial intelligence and machine learning, robotics, nanotechnology, 3D printing, genetics and biotechnology, today it is a multi-component process where all the ingredients are building on and amplifying one another.

At the World Economic Forum in Davos this year, the world's transition to Industrie 4.0 was discussed once again, namely the ways it keeps transforming practically every human activity: the way we make things, use the resources of our planet, communicate and interact with each other as humans; the way we learn, work, govern and do business. And its scope, speed and reach are now unprecedented.

People are always concerned with changes, trying to predict whether they will be for good or not really so, first of all for them personally, and after that, for the whole humanity as well. These changes have never been smooth, involving important social costs, and most of them were in countries with retarded reaction.

What’s happening in the manufacturing industry right now? Smart automation already helps optimize all the processes and task, whether performed by humans or machines. Once successfully tested in the virtual world, the results are transferred to the physical machines, and they close the cycle by sending their reports back to the digital sector. This wonderful integration of virtual and physical domains in so-called cyber-physical systems is the giant leap we see today that affects everything happening in the industry so far. Keep in mind that the Fourth Industrial Revolution acts on a much larger scale than all the previous ones, so it inevitably will eliminate millions of jobs and create millions of new ones. 

We’ve already been through the Industrie 2.0 and Industrie 3.0 and the most preliminary estimates show that this transition resulted in a reduction of at least 20% of workplaces, while globalization has led to the fact that this reduction has been extremely uneven in different countries. Speaking about Industry 4.0, according to the most preliminary calculations based on 350 largest corporations, this transition will lead to a reduction of at least 5 million jobs with more than half of them in the desk job and service sectors. The question is, where else, even in the abstract, is it possible to create that many alternative jobs? This seems to be a rhetorical interrogation.

improve working productivity and eliminate routine operations

Recent discussions on the impact of Industrie 4.0 on the employment have often been polarized between those who anticipate unlimited opportunities due to the new emerging job positions and prospects that improve working productivity and eliminate routine operations, and those who are less enthusiastic, expecting massive job displacement. Actually both scenarios are possible, and it’s our today’s choices and actions that will determine where each of us will be standing in the measurable future.

One of the most important trends in relation to Industrie 4.0 is now the way that companies should perceive their responsibility for the impacts of emerging technologies. We can see a gradual change in the way how tech companies and their executives navigate through these new moral and ethical questions, taking bigger responsibility for the social influence of their innovative products and technologies. It isn’t just about corporate social responsibility any more, but the core business interests of these companies.

Also, in the emerging conditions, tech businesses should take on greater social responsibility, caring even more about the environment, fighting for social justice, helping refugees, investing in employees’ training and education. In other words, business entities are expected to create greater values for the whole society.

If we succeed in this revolution, digitization will benefit the nearly 10 billion people who will populate our planet in 2050. Otherwise, societies risk to be divided into winners and losers, which will induce social unrest and anarchy, communities might be disintegrated and people will lose their faith into governments’ ability to ensure social integrity and security.

We should be ready to address many tough questions that arise with Industrie 4.0 gaining ground. How the current educational system needs to be changed according to the changing environment? Can we find the way to secure the future of those whose workplaces will definitely disappear due to machine substitution? Should we create taxes on software and robots used as labor power? How individuals’ rights and freedoms should look like in the digital age?

Here, both government and business must join forces to provide relevant answers and changes to get things right today and set the right direction to probably the greatest transformation that human civilization has ever known.

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