On the Fourth Industrial Revolution and the Rise of Digital Fluency

And here we have it. Yet another paradigm shift in industry; the proverbial bend in the curve. The Industrial Revolution is a notion and development that has fundamentally changed our economy, but most importantly our society. There is no doubt that major changes occurred within a short period of time. Industries arose and quickly replaced small-scale workshops and craft studios. It was the infamous switch from industrious to industrial, and certainly the start of a prolonged boom.

The Industrial Revolution dates back to the 18th century,  so around 230 years ago.  We can distinguish four stages in the continuous Industrial Revolution process. The first “acceleration” occurred toward the end of the 18th century: mechanical production on the basis of water and steam. The second stage takes place at the beginning of the 20th century with the introduction of the conveyor belt and mass production, to which we can link the names of icons like Henry Ford and Frederick Taylor. The third stage is also widely known as the Third Industrial Revolution, which involves the digital automation of production with electronics and IT. Imperative to this particular revolution is the mass production and widespread use of digital logic circuits, which in turn has mass produced technologies such as the computer, smart phones, and the internet.

At this very moment, we find ourselves at the beginning of the fourth stage, which is characterized by the so-called “Cyber-Physical Systems” (CPS). These systems are an aftermath of the extensive integration of production, sustainability and customer-satisfaction, which forms the basis of intelligent network systems and processes.

The bigger question is: What will be the impact of these ubiquitous, mobile super-computing, intelligent Cyber-Physical Systems? From self-driving cars to neuro-technological brain boosts and genetic editing; the evidence of radical change is all around is and it’s happening at the speed of light.

Even Professor Klaus Schwab (Founder and Executive Chairman of the World Economic Forum), is convinced that we are at the beginning of a revolution that is essentially going to change the way we live, work and relate to one another. In his book, The Fourth Industrial Revolution, Schwab points out that previous industrial revolutions had actually liberated humankind from animal power, made mass production possible and brought the practicalities of digitization to billions of people all over the world.

The Fourth Industrial Revolution is, however, fundamentally divergent. In essence, it is characterized by a range of new technologies that are being produced through a fusion of physical, digital, and biological worlds, which in turn, are impacting all disciplines, economies and industries, but most importantly, it is seriously challenging ideas about what it means to be human.

I was quite impressed myself with Watson- a machine that took on a far more complex challenge than his predecessor Deep Blue ( the robot beat the world chess champion): the television game show Jeopardy! A complete different ball game than chess. It is a game that draws on an endless volume of knowledge that at time also requires sharp analytical language skills, especially with jokes and puns.

It’s safe to say that we will all be surprised by the progress that occurs in the coming years and decades. I am particularly curious about the impact that this accelerating progress will have (is already having) on the job market and the overall economy since I believe this will significantly challenge the conventional knowledge about how technology and economics interlace.

The resulting shifts mean that we are living in a time of great capabilities but also great uncertainty. The world now has a potential it never even imagined it could have. It can connect billions of people to digital networks. Additionally, it has the momentum to dramatically improve the efficiency of organizations and even manage assets in environmentally-friendly ways (as opposed to the continuous environmental damage done by the previous industrial revolutions).

However, Schwab also express his concerns: that organizations might be unable to adapt to these changes; more importantly, governments could fail to use and regulate new technologies in a way that will capture their benefits. Furthermore, a potential shift in power will create important new security anxieties; inequalities may grow; and societies polarize.

Even though natural language processing software still has a long way to go and computers are not yet as good as humans at complex semantics, it is important to point out that they’re getting better at an incredibly fast pace. Having said that, surprising developments are underway because while computers’ communication abilities are not as extensive as those of the average human being, they are much broader. Google Translate is making this almost a reality because it initiated a serious of developments in the field of digital translation services. The translation services company Lionsbridge recently partnered up with IBM to offer GeoFluent, an online application that instantly translates chats between customers and troubleshooters who do not share a language (McAfee & Brynjolfsson, 2014).

It is common knowledge that computers have always been bad at writing real prose. Sure, I’ll give them the fact that in recent times they have been able to generate grammatically correct sentences. But, they’re still meaningless sentences. However, and this is where it gets interesting, recent developments demonstrate that though not all computer-generated prose is senseless. Forbes.com recently hooked up with the company Narrative Science to write the corporate earnings previews that appear on their website. Let me point out that these stories are generated by algorithms without human involvement. Just google an example of a Forbes Earning Preview to get a taste.

The Fourth Industrial Revolution has brought about an era of epoch-making connectivity and inequality, and its effects are definitely far-reaching. In the midst of these developments, the migration crisis is certainly a case in point. The conflict in the Middle-East may be the most obvious catalyst, but the dangerous combination of inequality and connectivity exerts a powerful pull for people crossing to Europe. Think about the Syrian refugee in a Turkish camp, or the underemployed young generation in the Cambodia slum, not only do they have essentially different life chances compared to the average EU citizen. They are also constantly tempted and taunted by an never ending stream of images and messages of what others have, and they don’t. This very same mix of increased global connectivity and inequality plays a critical role in many of the conflicts and governance crises we see around the world.

The World Economic Forum recently published a report with some shocking figures. Based on a survey of executives in fifteen of the world’s largest economies, the report expands on the “Fourth Industrial Revolution”, which will most certainly alter labor markets in just five short years. The report concluded that 7.1 million jobs will be lost- and the biggest losses will be in the white-collar and administrative roles. At the same time, some of these losses will be compensated with the creation of 2.1 million new jobs in the nanotechnology and robotics sectors. In addition, the report estimates that 28 percent of the skills required in the UK will undergo a great deal of change in the four years leading to 2020.

The big question is how can we possibly predict what kind of skills our children will need. The shifting paradigm involves an expectation that workers will retrain and re-skill throughout their careers. I personally think it’s quite alarming that over 90 percent of Millennials expect to stay in a job for less than three years.

So I guess we can’t really predict the skills that will be required in the decades to come, but we can predict the qualities that will be required – soft skills like leadership, flexibility, communication, decision-making, working under pressure, creativity and problem-solving. These are all skills that educational policy has been trying to banish from the classroom so that education can focus on core subjects like science and math.

So basically, the WEF was just reinforcing a message that has already been delivered by others. Last year, Andy Haldane, Chief Economist of the Bank of England warned that almost half of all jobs in the UK are under threat from automation the coming two decades. This, in turn, will affect people at all levels of organizations.

These figures raise some important questions, particularly regarding the future of the education system. As Sir Ken Robinson pointed out in his TED Talk, children starting school now will probably be working until around 2065- yet we can’t even predict what the world will look like in the next five years.

Ever heard of Lazslo Bock? Well he’s in charge of recruiting at Google, and he recently said in an interview that “while good grades don’t hurt” the company is looking for softer skills like leadership, humility, collaboration, adaptability, etc. We are all slowly coming to the conclusion that the current education system was pretty much designed for a different era, and since it’s been under scrutiny from constant testing, creativity has practically been thrown out of the curriculum. Tony, Little, former Master of Eton College, has written extensively on the dangers that wider intellectual development is being constrained by an overwhelming obsession with exams.

For the leading non-governmental organization Save The Children this is a big deal. All these trends definitely matter, not only because children are incredibly vulnerable to the distortion created by political and social change, but also because childhood is a vehicle in which we can break the structural cycles of poverty and disadvantage.

On the one hand, there has been considerable progress made over the last twenty years in reducing child deaths and boosting education outcomes. On the other hand, the review of progress towards the 2015 development goals also show that millions of children have not profited from these gains, and that this is directly correlated to who they are and where they live. This can be seen as a potential threat to the 2030 global goals established by the UN last September.

The new ‘Generation X’ has already adopted the pseudonym of Generation Excluded- referring to the millions of children who are failing to even reach their fifth birthday, or never learn in school because they live in a conflict zone, or belong to the “wrong” ethnic group, or are a girl. We have to change the status quo and demolish the barriers that prevent children and youth from surviving and prospering, in order for them to reap the benefits of the technological and economic developments that this Fourth Industrial Revolution is bringing about.

Technology can definitely help us by making life-long constant re-training and re-skilling a more feasible option. So called MOOCS (Massive Open Online Courses) have succeeded in lowering the price of education and widened access by removing the need for mandatory assistance. This means students no longer need to be at set times or places, thereby facilitating those who already have a job, or for those who simply cannot afford to. Udacity, an online university, recently introduced the concept of “nano degrees”, which was primarily designed to train people for jobs in the field of web developing and data analysis. With the rapid pace at which technology is advancing, it is likely that future employees are going to have to take such courses at some point in their lives.

The debate is mainly divided on two fronts: “techno-optimists” and “techno-pessimists”. The optimists believe the technology transformation will either free humanity to new creative heights, or lead to a dystopia of increased poverty, purposeless and unhappy people while the pessimists put a great deal of focus on the ethical, legal, and moral issues raised by the deployment of robots. As you see, there are compelling arguments in both directions. However, on the future social impact of the rise of robots, I do believe is a bit premature to draw conclusions.

So, to bring it home. This transformational technology of the Fourth Industrial Revolution, particularly robotics, poses both risks and opportunities to policymakers and to society at large. The extent and scope of robotics and the digital economy displacing human-performed jobs is without precedent. In addition, short-sighted decisions made by policy-makers should ensure that our education system will adjust to the needs of the twenty-first century, which are infinitely different than any previous century.


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