The Fourth Industrial Revolution: Challenges and Opportunities for Technology Firms

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In 2016, Klaus Schwab, the World Economic Forum (WEF) founder, published a book called "The Fourth Industrial Revolution." In it, Schwab discusses the next wave of innovation and technology, characterised by a fusion of the physical, digital, and biological worlds.

He argues the Fourth Industrial Revolution will impact all disciplines, economies, and industries - and will do so at an unprecedented rate. He suggests that only some of us are prepared for how this revolution will impact how we work, play, communicate, and think about what it means to be 'human.'

"We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another," writes Schwab. "In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before."

Schwab predicts that by as early as 2025, we will see the widespread commercial use of nanomaterials 200 times stronger than steel and a million times thinner than human hair, the first transplant of a 3D-printed liver, driverless cars, and many more innovations that will turn science fiction into science fact.

In this blog, we'll provide an introduction to the Fourth Industrial Revolution. We'll discuss its opportunities and challenges and consider what businesses can do to prepare for this forthcoming transformation.

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The first three industrial revolutions

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During the late 18th century, Britain experienced the beginnings of what would become known as the first industrial revolution. The invention of labour-saving technologies like the spinning jenny, power loom, and steam engine led to considerable improvements in production, efficiency, and economic expansion.

This was followed by the second industrial revolution of the late 19th century and early 20th century, characterised by innovations like the telephone, the light bulb, and the internal combustion engine. It fueled mass industrial production and manufacturing, creating the steel, oil, and chemical industries, and ultimately paved the way for the modern economy.

The third industrial revolution, which began midway through the 20th century, is also known as the digital revolution. It's when advanced economies shifted from mechanical and analogue technology to digital electronics thanks to computers, semiconductors, and new communication networks, like the Internet. It led to a new era of globalisation and interconnectedness, fuelling the expansion of international markets.

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The fourth industrial revolution

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Schwab writes that the Fourth Industrial Revolution will be fundamentally different. It will be defined by new technologies that blend the physical, digital, and biological worlds and challenge traditional assumptions and ideas about what it means to be human.

The rapid adoption of AI, IoT, robotics, and blockchain is just the beginning. As the revolution gains momentum, Schwab expects to see the adoption and commercialisation of mind-bending technologies like mobile supercomputing, intelligent robots, neuro-technological brain enhancements, and genetic editing.

"The Fourth Industrial Revolution represents a fundamental change in how we live, work, and relate to one another," writes Schwab. "It is a new chapter in human development, enabled by extraordinary technology advances."

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In the book, Schwab identifies several key characteristics of the fourth industrial revolution. They are:

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‍Velocity, scope, and systems impact

The fourth industrial revolution will be fast, and its scale will be global. Schwab predicts it will alter the systems of production, management, and governance across the entire world.

Disruptive 

The emergence of disruptive technologies will fundamentally transform traditional business models and create new ones, many of which are beyond our current scope of imagination. Examples include ride-sharing services and on-demand manufacturing.

Borderless

Schwab expects to see a blurring of boundaries between the physical, digital, and biological spheres due to the growing prevalence of wearable devices, smart homes, and the integration of digital technology into the human body. Researchers are already testing DNA nanobots that seek out and eliminate cancer cells. 

Tesla boss Elon Musk often discusses blending the human mind with digital technology through brain implants. Neuralink Corporation, founded by Musk in 2016, is a neurotechnology company that develops implantable brain–computer interfaces. It's built a chip that processes and transmits neural signals between the human brain and devices like a computer or a phone.

Augmented and virtual reality

The fourth industrial revolution will be marked by the increasing use of augmented and virtual reality technologies and fully immersive digital spaces like the Metaverse. This is already happening. Gamers spent nearly 50 billion hours on Roblox in 2022. Roblox is an online game platform where users can build their virtual universes. 

And the digital real estate market is booming. Last year, the Metaverse Group (a subsidiary of crypto investment company Tokens.com) bought land on the Decentraland metaverse for $2.4 million.

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Facts, stats, and predictions

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• The fourth industrial revolution could add an extra $3.7 trillion to global GDP by 2025, according to research by McKinsey & Company.
• In a PwC survey, more than 7 out of 10 (72%) business leaders and CEOs agreed that AI would provide a significant business advantage in the next few years. 
• The total amount of data generated globally is now at 44 zettabytes; that figure was just 4.4 zettabytes in 2013.
• A Deloitte survey found that just under half (47%) of executives think their organisations need to do more to prepare for the Fourth Industrial Revolution. 
• By 2025, half of the world's largest companies will have invested in some form of digital twin technology. A digital twin is a computer programme that uses real-world (and real-people) data to create simulations that predict how a product, service, or process will perform. 
• According to a report by Grand View Research, the robotics market will grow at a compound annual rate of 23.6% from now until 2028.
• IBM predicts that by 2025, quantum computing will have reached a level of performance way beyond current supercomputers.
• In a survey by the World Economic Forum, 70% of respondents said they believe that the Fourth Industrial Revolution will create more jobs than it displaces.

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The fourth industrial revolution is already here (sort of)

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The technologies that will power the fourth industrial revolution are already part of our daily lives and routines. Here are a few examples.

Amazon Go

This cashier-less grocery store uses computer vision, deep learning algorithms, and sensor fusion to allow customers to walk in, pick up the items they want, and leave without stopping at the checkout. 

Tesla Autopilot

A suite of advanced driver assistance systems enables Tesla vehicles to perform driving tasks, such as staying in a lane, changing lanes, and navigating interchanges, with minimal to zero driver input.

Google Assistant

A voice-activated virtual assistant that uses natural language processing and machine learning algorithms to provide users with personalised recommendations and assistance.

Fitbit

These popular wearable fitness trackers use sensors to monitor physical activity, heart rate, and sleep patterns, providing personalised insights and coaching to help users achieve their fitness goals.

Blockchain-based supply chain management systems

IBM and Walmart are using blockchain technology to create more secure and transparent supply chains, allowing consumers to track the journey of their products, including food sources from farm to store.

Collaborative robots (cobots)

These small, flexible robots work alongside human workers in manufacturing and other industries, performing tasks such as assembly, packing, and quality control.

Virtual and augmented reality headsets

Devices like the Apple Vision Pro and Oculus Quest enable users to enter virtual and augmented reality environments for gaming, education, and training purposes.

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The opportunities and challenges of the fourth industrial revolution

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"The changes of the fourth industrial revolution are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril," Klaus Schwab, The Fourth Industrial Revolution.

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Here's a look at some opportunities this coming revolution will bring.

Automation

Technology will automate many routine and repetitive tasks, freeing workers for more creative, meaningful, and value-driven activities.

Efficiency

Companies will be able to streamline their operations, reducing waste and boosting productivity. For example, predictive maintenance technology can help companies identify potential equipment failures before they occur, reducing downtime and maintenance costs. IoT sensors and data analytics will help companies optimise their supply chains and logistics, reducing the time and cost of getting products to the consumer.

Productivity

Businesses and people will become more productive with better tools and data access. AI-powered insights can help sales and marketing teams identify new opportunities and effectively target their efforts. At the same time, collaborative robots can help manufacturing teams work more efficiently and produce higher-quality products.

Now, let's focus on some of the challenges.

Schwab identifies several in his book. They include:

Job displacement

The fourth industrial revolution may lead to job losses and redundancy in the short term, particularly for companies and people that don't invest in retaining or developing new skills. 

This is a big concern for many unskilled or semi-skilled workers. Higher-skilled workers, like coders and software developers, could also be at risk as artificial intelligence becomes more advanced. ChatGPT can write code, fix programming bugs, and build new websites.

Security concerns

The fourth industrial revolution may create new data and cybersecurity challenges as businesses and individuals become increasingly dependent on technology.

Ethical issues

Using artificial intelligence and machine learning algorithms raises questions about bias and discrimination. Autonomous weapon and security systems raise serious concerns about potential unintended harm. The US military is testing out armed robot dogs, which could one day be used to patrol the country's southern border.

Schwab notes that these challenges are manageable, stating that businesses and governments have a central role.

He writes that businesses should invest in reskilling and upskilling workers to prepare them for new roles in a more automated workforce. At the same time, governments should provide social safety nets and free training programmes to help workers transition to new jobs and industries. 

This, Schaab continues, demands a new era of cooperation between businesses and governments. He believes they must work together to develop new security protocols and ethical guidelines that ensure emerging technologies are used responsibly and for the benefit of everyone.

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"Collaboration and partnership between public and private sectors are critical for addressing the challenges and opportunities presented by the fourth industrial revolution, The public sector provides the legal and regulatory framework, infrastructure, and public services needed for economic activity, while the private sector provides the innovation, investment, and entrepreneurship. Working together, they can achieve more than either can alone." Klaus Schwab

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Preparing for the fourth industrial revolution

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Schwab's book also focuses on how businesses and organisations can prepare for the Fourth Industrial Revolution. His key strategies for navigating the fourth industrial revolution successfully include:

Invest in technology

To stay competitive, businesses must invest in the technologies driving the transformation, including AI, IoT, and blockchain.

Reskill the workforce

Investment in training programmes and education initiatives will help workers develop new skills and competencies. By reskilling their workforce, businesses can ensure they have the talent and capabilities to succeed in the future.

Foster collaboration and innovation

Businesses must foster a culture of innovation and collaboration that encourages experimentation, sharing new ideas and insights, and a willingness to embrace change.

Embrace agility and adaptability

Businesses need to be agile and adaptable. This could require new business models, experimenting with new technologies, and responding quickly to changing market conditions.

The totalitarian tiptoe?

The fourth industrial revolution is closely related to "The Great Reset," a term used to describe a proposed set of economic and social policies to address serious global challenges, including climate change, inequality, and public health.

Both the Great Reset and the Fourth Industrial Revolution have spawned various conspiracy theories, suggesting that powerful elites are directing a sinister plan to take over the world and establish a new world order. These theories often involve claims that the COVID-19 pandemic was intentionally created or exaggerated as part of the plan and that the policies proposed under "The Great Reset" will lead to a loss of individual freedoms and a dystopian future.

These theories are bizarre and baseless. However, to be fair to the conspiracy crew, Klaus Schwab sounds like a villain from a 1960s Bond movie.

And, on occasion, he dresses like the overlord of a galactic empire intent on subjugating the known universe.

https://twitter.com/BreslowCaleb/status/1328889387451510784/photo/1

But does a Bond-villain accent and a funky robe mean he's directing a master plan to enslave all of humanity under a global, technocratic state? 

Probably not.

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