The 4th Industrial Revolution or 4IR as it has come to be known, has had a lot of buzz over the last few years and is touted as the next big thing since the spread of automation and digitization through the use of electronics and computers, the invention of the Internet, and the discovery of nuclear energy which characterized the 3rd Industrial Revolution. In this week's Decoder article, we will be breaking down the 4IR, understanding what it is, what technologies encompass it, etc.
To have a bit of a background understanding, the First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. The 4th Industrial Revolution, on the other hand, is a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), genetic engineering, quantum computing, and much more. Because of this perfect storm of technologies, the Fourth Industrial Revolution is paving the way for transformative changes in the way we live and radically disrupting every business and economic sector one can think of.
The term 4th Industrial Revolution was coined by Klaus Schwab, founder and executive chairman of the World Economic Forum. Schwab described the 4IR as having the potential to raise global income levels and improve the quality of life for populations around the world. He also goes on to state that:
In the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.
Despite the good that stands to be brought about by the 4IR, it also stands to further widen the inequality gap by segregating the available labor force into “low-skill/low-pay” and “high-skill/high-pay” groups.
As countries and governments like Botswana's champion the 4IR as the main driver of transformative growth, the aforementioned factors must be considered to ensure that everyone reaps the befits of it. 4IR should be judged on how much they are contributing towards improving efficiency and productivity, reducing trade, transportation and communication costs as well improving effectiveness of logistics and supply chains, all while ensuring that they are not further widening the inequality gap.