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If you are of my age, you eventually remember the 3rd Industrial Revolution. So let's do a very brief recap just to put our memories in good shape.

The 1st Industrial Revolution  -  1760's - 1860's  -   Steam, Coal, Railways, Factories

200 years before the first batch of Generation Y was born mankind still used horse power in its literal form. The 1st Industrial Revolution replaced horse power with steam power leading to railways and factories.  

          

 

The 2nd Industrial Revolution  -  1860's - 1970's  -  Electricity, Combustion Engine, Mass Production

This is the era of today's baby-boomer's parents work life; a time when methods in factories changed dramatically leading to mass production on a conveyor belt requiring a lot of man power. 

             

 
The 3rd Industrial Revolution  -  1970's - early 2000  -  Robots, Computer Technology, Internet, Electronics, Renewable Energy

Baby Boomers and Generation X remember this time. It's the time when some man power was replaced by robots, electronics and computer technology especially in manufacturing. Workers lost their jobs in certain roles.  

             

 

The 4th Industrial Revolution - 2020 onwards
Processing Power, Data Speed, Connectivity, Integration, Cognitive Computing and Neural Networks

The 4th industrial revolution has just started and will last far beyond 2020. While the 3rd revolution replaced many production line workers with robots, the 4th revolution aims to replace many more as well as supervisory and managerial level employees (i.e. the middle class). Today's computers can process a lot more data than in earlier times. Data speed has literally achieved light speed and the possibility to connect everything together has opened the doors to integration and allows many different parts to become virtually one. 

Imagine an internationally operating company. It does not even need to be very large of scale. A head office in Bangkok,  a factory in an industrial estate in Chonburi, a research center in Khon Kaen, another manufacturing facility in Vietnam and one in Myanmar. In a conventional, say pre-1980’s set-up, each location would have a full blown human resource department, an accounting department and a purchasing department with all the staff necessary times five. Once the 4th industrial revolution has accomplished its goal, this organization will have a single HR department, a single accounting department and one purchasing department handling the purchasing for all facilities centrally. Four fifths of the staff needed today will be given the opportunity to find a more fulfilling job. This is the ultimate target of the 4th Industrial Revolution: increase efficiency through integration.  

Along the 4th industrial revolution, software and hardware engineers are doing their best to replace humans wherever they can. From blatant obvious job killers like self-driving cars to the less easily visible automation of entire processes making people and human interactions obsolete. Today you may still "dial" 1150 or 1112 on your mobile phone to order a Pizza with a friendly operator answering your call and telling you about all the actual promotions available before eventually taking your order. Then the delivery man brings your order to your home or work place where you pay in cash against the paper slip scotch taped on the top of your pizza box. In future however, you will look up the actual promotions on your mobile phone or tablet, or skip the promotions and go right away to the ordering screen where you tick whatever items you want. While the operator and delivery man make their living from the unemployment insurance, your Pizza is landed in front of your home safely and on time by a drone. At the moment of touch-down, a message on your mobile phone alerts you that your lunch is ready so you can collect it before the neighbor's dog takes care of it. The amount for the entire order has been deducted from your bank account at the moment you confirmed the order on your mobile phone and if you think your pizza was prepared by human hand you are as wrong as you can be. The entire process is automated. Your order went directly to the software managing the production process. The 4th industrial revolution is not about humans, it's about integrated automation.
 

What does it mean for the business and the society?

Like any revolution, history will tell if it makes things better or worse for mankind.  For businesses the 4th industrial revolution should result in revolutionary efficiency. How far it will be a cost saving remains to be seen. First of all, those sophisticated systems are not cheap, second, the business will still have to maintain hardware and software and those are jobs for highly skilled people. So bottom line is most likely cost saving through synergy, consolidation, and efficiency resulting from integration and connectivity while the total cost of salaries paid might be just as high as it used to be or even increase but distributed over far fewer workers and employees.

For society it will undoubtedly be a huge impact. When even more low income earners and an increasing number of the middle class staff/employees are either losing their jobs or can't find jobs to begin with, then the social burden on governments will increase significantly. Generation Z youngsters will have to do what it takes to get one of these well paid specialist jobs, or simply establish their own business so they will not be exposed to an increasingly tough selection process but will be those selecting.

Like many new technologies, however, there is a positive side as well as a negative side.  On a positive side, for example, successful widespread adoption of self driving vehicles promises to drastically reduce traffic accidents and traffic-related deaths because autonomous vehicles don’t text and drive; they don’t fall asleep at the wheel and they don’t drive drunk. Just let's hope they also drive themselves to the service center when it is time for regular maintenance works.  In health care, for example in the field of cancer treatment, the introduction of artificial intelligence promises to help put the best “information and wisdom” in the world at the fingertips of oncologist everywhere so that they can diagnose and prescribe the best treatments. This information and wisdom will be created using analytical evidence-based cognitive computing systems that have access to and learn from vast volumes of medical data.

The potential final vision of the 4th Industrial Revolution is coming very close to some science fiction movies we may have laughed at a few decades ago and it sometimes makes me remember my grandmother when we were talking about the future and she said "well, I'm glad I won't have to experience this". But mankind has always faced challenges and has always found ways to overcome them, resolve issues and find solutions. There is no doubt that people and government policies will change and adapt to cope with the up- and downside of the current rapid technological development, transforming us into digital societies where individuals are permanently online, in-touch and up to date through constant communication and instant data exchange. 

 

 

 

Niklaus Stucki is a business consultant at Freewill Solutions.
Let me know what you think about this at: niklaus_stu@freewillsolutions.com

Bangkok, 23rd November 2016

 

PS: Between the time I wrote this article and the day I published it, the Pizza delivery by a drone has already become reality in New Zealand as described in the following article from November 16,

http://www.nationmultimedia.com/news/breakingnews/30300143

That said, nowadays if you want to talk about the future you'd better hurry up as you might end-up talking about history faster than you thought.

 

 

 
 
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