Top Read of the Week: The Fourth Industrial Revolution

​I just finished one of the books on the Edu21 Syllabus. Below are some lengthy excerpts with the most important pieces for education bolded. Just more evidence for why education needs to change now, in a big way, and not in some more distant future in a small way. All of it points to cooperative, product-oriented learning that aims to creatively solve authentic complex problems.

Klaus Schwab, in The Fourth Industrial Revolution, writes:

The first industrial revolution spanned from about 1760 to around 1840. Triggered by the construction of railroads and the invention of the steam engine, it ushered in mechanical production. The second industrial revolution, which started in the late 19th century and into the early 20th century, made mass production possible, fostered by the advent of electricity and the assembly line. The third industrial revolution began in the 1960s. It is usually called the computer or digital revolution because it was catalysed by the development of semiconductors, mainframe computing (1960s), personal computing (1970s and 80s) and the internet (1990s).

Mindful of the various definitions and academic arguments used to describe the first three industrial revolutions, I believe that today we are at the beginning of a fourth industrial revolution. It began at the turn of this century and builds on the digital revolution. It is characterized by a much more ubiquitous and mobile internet, by smaller and more powerful sensors that have become cheaper, and by artificial intelligence and machine learning.

Digital technologies that have computer hardware, software and networks at their core are not new, but in a break with the third industrial revolution, they are becoming more sophisticated and integrated and are, as a result, transforming societies and the global economy. This is the reason why Massachusetts Institute of Technology (MIT) Professors Erik Brynjolfsson and Andrew McAfee have famously referred to this period as “the second machine age”, the title of their 2014 book, stating that the world is at an inflection point where the effect of these digital technologies will manifest with “full force” through automation and and the making of “unprecedented things”. (Kindle Locations 113-127).

He continues:

As a result, the great beneficiaries of the fourth industrial revolution are the providers of intellectual or physical capital – the innovators, the investors, and the shareholders, which explains the rising gap in wealth between those who depend on their labour and those who own capital. It also accounts for the disillusionment among so many workers, convinced that their real income may not increase over their lifetime and that their children may not have a better life than theirs. (Kindle Locations 203-206).

Furthermore:

So far, the evidence is this: The fourth industrial revolution seems to be creating fewer jobs in new industries than previous revolutions. According to an estimate from the Oxford Martin Programme on Technology and Employment, only 0.5% of the US workforce is employed in industries that did not exist at the turn of the century, a far lower percentage than the approximately 8% of new jobs created in new industries during the 1980s and the 4.5% of new jobs created during the 1990s. This is corroborated by a recent US Economic Census, which sheds some interesting light on the relationship between technology and unemployment. It shows that innovations in information and other disruptive technologies tend to raise productivity by replacing existing workers, rather than creating new products needing more labour to produce them.

Two researchers from the Oxford Martin School, economist Carl Benedikt Frey and machine learning expert Michael Osborne, have quantified the potential effect of technological innovation on unemployment by ranking 702 different professions according to their probability of being automated, from the least susceptible to the risk of automation (“ 0” corresponding to no risk at all) to those that are the most susceptible to the risk (“ 1” corresponding to a certain risk of the job being replaced by a computer of some sort).

This research concludes that about 47% of total employment in the US is at risk, perhaps over the next decade or two, characterized by a much broader scope of job destruction at a much faster pace than labour market shifts experienced in previous industrial revolutions. In addition, the trend is towards greater polarization in the labour market. Employment will grow in high-income cognitive and creative jobs and low-income manual occupations, but it will greatly diminish for middle-income routine and repetitive jobs. (Kindle Locations 534-549).

In addition:

In the foreseeable future, low-risk jobs in terms of automation will be those that require social and creative skills; in particular, decision-making under uncertainty and the development of novel ideas.

This, however, may not last. Consider one of the most creative professions – writing – and the advent of automated narrative generation. Sophisticated algorithms can create narratives in any style appropriate to a particular audience. The content is so human-sounding that a recent quiz by The New York Times showed that when reading two similar pieces, it is impossible to tell which one has been written by a human writer and which one is the product of a robot. The technology is progressing so fast that Kristian Hammond, co-founder of Narrative Science, a company specializing in automated narrative generation, forecasts that by the mid-2020s, 90% of news could be generated by an algorithm, most of it without any kind of human intervention (apart from the design of the algorithm, of course).

In such a rapidly evolving working environment, the ability to anticipate future employment trends and needs in terms of the knowledge and skills required to adapt becomes even more critical for all stakeholders. These trends vary by industry and geography, and so it is important to understand the industry and country-specific outcomes of the fourth industrial revolution.

In the Forum’s Future of Jobs Report, we asked the chief human resources officers of today’s largest employers in 10 industries and 15 economies to imagine the impact on employment, jobs and skills up to the year 2020. Survey respondents believe that complex problem solving, social and systems skills will be far more in demand in 2020 when compared to physical abilities or content skills. The report finds that the next five years are a critical period of transition: the overall employment outlook is flat but there is significant job churn within industries and skill churn within most occupations. While wages and work-life balance are expected to improve slightly for most occupations, job security is expected to worsen in half of the industries surveyed. It is also clear that women and men will be affected differently, potentially exacerbating gender inequality. (Kindle Locations 564-581).

Effects on inequality are then described:

The discussion on economic and business impacts highlighted a number of different structural shifts which have contributed to rising inequality to date, and which may be further exacerbated as the fourth industrial revolution unfolds. Robots and algorithms increasingly substitute capital for labour, while investing (or more precisely, building a business in the digital economy) becomes less capital intensive. Labour markets, meanwhile, are becoming biased towards a limited range of technical skill sets, and globally connected digital platforms and marketplaces are granting outsized rewards to a small number of “stars”. As all these trends happen, the winners will be those who are able to participate fully in innovation-driven ecosystems by providing new ideas, business models, products and services, rather than those who can offer only low-skilled labour or ordinary capital.

These dynamics are why technology is regarded as one of the main reasons incomes have stagnated, or even decreased, for a majority of the population in high-income countries. Today, the world is very unequal indeed. According to Credit Suisse’s Global Wealth Report 2015, half of all assets around the world are now controlled by the richest 1% of the global population, while “the lower half of the global population collectively own less than 1% of global wealth”. The Organisation for Economic Co-operation and Development (OECD) reports that the average income of the richest 10% of the population in OECD countries is approximately nine times that of the poorest 10%. Further, inequality within most countries is rising, even in those that have experienced rapid growth across all income groups and dramatic drops in the number of people living in poverty. China’s Gini Index, for example, rose from approximately 30 in the 1980s to over 45 by 2010. (Kindle Locations 1328-1342).

He ends with:

This will clearly require systemic innovation and not small-scale adjustments or reforms at the margin.

We cannot get there without ongoing cooperation and dialogue - at local, national and supra-national levels, with all interested parties having a voice. We need to focus on getting the underlying conditions right, and not just concentrate on the technical aspects. As the evolutionist Martin Nowak, a professor of mathematics and biology at Harvard University, reminds us, cooperation is “the only thing that will redeem mankind.” As the principal architect of four billion years of evolution, cooperation has been a driving force because it enables us to adapt amid increasing complexity and strengthens political, economic and social cohesion through which substantial progress is achieved.

With effective multistakeholder cooperation, I am convinced that the fourth industrial revolution has the potential to address – and possibly solve – the major challenges that the world currently faces.

In the end, it comes down to people, culture and values. Indeed, we need to work very hard to ensure that all citizens across cultures, nations and income groups understand the need to master the fourth industrial revolution and its civilizational challenges.

Let us together shape a future that works for all by putting people first, empowering them and constantly reminding ourselves that all of these new technologies are first and foremost tools made by people for people.

Let us therefore take collective responsibility for a future where innovation and technology are centred on humanity and the need to serve the public interest, and ensure that we employ them to drive us all towards more sustainable development. (Kindle Locations 1626-1641).

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