We stumbled upon an interesting article recently which had us thinking about the next industrial revolution. Cited by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, he talks about Industry 4.0 in his article, “The Fourth Industrial Revolution - what it means, how to respond”.
The fourth being the digital revolution, that Schwab says, “is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres”. Exactly what this means, we will get to later but for now let’s recap the three industrial revolutions that have come before it.
Industry 1.0: The First Industrial Revolution began about 1760 and lasted 100 years or so and included the transition to mechanisation. Tasks previously done by hand were replaced with machines through the use of water and steam power - in essence, the rise of the factory system. In the mid-1770’s there was a fundamental change in working principles after James Watt and Matthew Boulton perfected their beloved steam engine. And so, efficiencies and productivity were on the rise and job opportunities significantly improved.
Industry 2.0: During the second revolution in the mid to late 19th century, economic progress continued with the adoption of steam powered railways, boats and ships, electricity and accelerated mass production with the rise of large-scale manufacturing (aka. the assembly line). Again, efficiencies and productivity boomed, food costs decreased and population grew meaningfully.
Industry 3.0: The Third Industrial Revolution early in the 20th century then saw the introduction of electronics and information technology to automate production. Basically, manufacturing went digital with robots replacing humans on the assembly line. Productivity went through the roof, average income and population began to exhibit unprecedented sustained growth and the standard of living in the western world was at a record high.
So what of the Fourth? Industry 4.0 is a revolution of digital technology that’s building on Industry 3.0. It’s a combination of all known technology known to man: physical, mechanical, electronic, biological and intellectual, both artificial and human. It’s a blend of digitalised communication and calculation, selection and switching, monitoring and melding to produce a digital technology of previously unimagined power, scope and accuracy. It’s automation using machine learning and algorithms to increase efficiencies. It’s using artificial intelligence to improve productivity levels with administrative tasks managed by ‘bots’ so humans can focus on ‘big picture’.
Some might argue the Fourth Industrial Revolution has the potential to decrease job opportunities through the replacement of people with machines, just as was predicted during the previous three revolutions. But with so much data at our fingertips and endless opportunities for growth, we see A.I as tools for making life easier, not tools for replacing people.
As Schwab so eloquently summarises, “Neither technology nor the disruption that comes with it is an exogenous force over which humans have no control. All of us are responsible for guiding its evolution, in the decisions we make on a daily basis as citizens, consumers, and investors. We should thus grasp the opportunity and power we have to shape the Fourth Industrial Revolution and direct it toward a future that reflects our common objectives and values.”
Spot on. It’s just about being part of the future.
Read the article - The Fourth Industrial Revolution - what it means, how to respond