What better way to start this new century than to go over the pros and cons of the 4th Industrial Revolution. The 4th industrial revolution is a term coined by Professor Klaus Schwab. He is the founder and Executive chairman of the World Economic Forum, so he has some good credentials. He described the 4th industrial revolution as a “current and developing environment in which disruptive technologies and trends such as the Internet of Things, robotics, virtual reality and Artificial Intelligence are changing the way people live and work”. So this is the era of AI and machine learning, genome editing, 3D printing, Internet of Things, augmented reality, autonomous vehicles, and much more. And we’re not talking about the future here. These things are currently affecting our personal and work life and they are ever evolving. Today we are living on the cusp of this Forth Industrial Revolution. Which is also referenced as Industry 4.0 or 4IR. For some reason, people love 3 character acronyms and I really think these acronyms could be one of the characteristics and disadvantages of this industrial revolution.
That brings us to the main subject of this article and that’s the pros and cons that this 4IR brings. And because we’re talking about the 4IR, let’s cover 4 of each. Convenient, right?
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The pros of the 4th industrial revolution
This happens with each industrial revolution and apparently productivity of each industrial era goes up 50 times over the preceding age. In the next 5-10 years, it’s estimated that productivity will increase by 5-8%. This is mainly because of increased automation.
2. Improved quality of life
Technology has made possible new products and services that increase the efficiency and pleasure of our personal lives. One Channel CEO, Bernard Ford, exemplifies this by mentioning how “ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, playing a game” and even controlling the lights and temperature in our homes can be done remotely. Not to mention that soon we’ll have fully autonomous cars, or maybe we already do – depending when you’re reading this, and who knows what else.
3. New markets
Klaus Schwab mentioned that “a fusion of technologies that is blurring the lines between physical, digital, and biological spheres” will create new markets and growth opportunities. It will blend improvements from several fields, that were often previously separated, to create a new product or a new service. Not only there will be more knowledge workers, but knowledge workers in new fields.
4. Lower barrier to entrepreneurship
We can already see that with new technologies such as 3D printing for prototyping, the barriers between inventors and markets are reduced. Entrepreneurs can now establish their companies and test various products with lower start-up costs without the traditional time and cost constraints often encountered with traditional prototyping methods. The typical barriers to entry are removed from the entrepreneurship equation.
The cons of the 4th industrial revolution
It is all about who gets the benefits of these technologies and of the results they help produce. The reality is that the largest beneficiaries tend to be the providers of intellectual and physical capital (shareholders, investors, and innovators). Technology is one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries. Shocking, isn’t it? The demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased and the part in between them will start to wear thin. So this could also lead to potential job losses. Not to even mention that for developing countries there are technological and infrastructure challenges and skill challenges that are not easy to overcome.
2. Cybersecurity risk
When everything is connected, the risk of hacking data and tampering with it or using it for malicious intent is now more prevalent. It is not as contained as before. It’s more and more frequent that we hear the dreaded news of a new data security breach. So often, in fact, that it does not shock us anymore. Not to mention that it challenges the very nature of identity and privacy, especially with the increased use of data analytics and machine learning.
3. Core industries disruptions
We see this already. Taxis are competing against Uber and Lyft, Traditional television and cinema compete with Netlfix and YouTube, the hotel industry with AirBnB and any store is competing against Amazon. This has ramifications in the type of services being offered and the model through which they are offered as well as the jobs associated with them.
4. Ethical issues
With improved AI, genetic engineering, and increased automation, there are new ethical concerns and questions of morality that already differ greatly from individual to individual. With access to more data about an individual and a group of individuals, the risk of using it for personal gain and manipulation is even greater. I think we all remember Cambridge Analytica data scandal in early 2018 when it was revealed that Cambridge Analytica had harvested the personal data of millions of peoples’ Facebook profiles without their consent and used it for political advertising purposes. Plus, this is only an example of those data missuses that we know of.
So here we are on that edge of the 4th industrial revolution that radically impacts our daily lives. It can be an era of economic and knowledge growth and improvements in the way we live and work, but we also need to be weary of its disruption potential and find ways to mitigate these risks.
Please let me know what other pros and cons of the 4th industrial revolution you are aware of and should be mentioned here.