On the brink of the Fourth Industrial Revolution

Is it emerging factories and the 18th-19th centuries‘ context that comes to your mind when you hear the term “Industrial Revolution”? That is a frequent case as we tend to know what the First Industrial Revolution is but cannot distinguish the three revolutions of an industry that have happened so far. Because of this lack of knowledge, some are blind to the fact that the world is ALREADY entering the Fourth Industrial Revolution and that we are the ones to experience it.

The First Industrial Revolution

The First Industrial Revolution is the process of change from an agrarian and handicraft economy to one dominated by industry and machine manufacturing. It was underpinned by the Agricultural Revolution and caused the massive growth of coal, iron and textile industries from the late 18th century until mid-19th.

Due to technological changes, the mass production of manufactured goods saw a tremendous increase in the use of natural resources: water, steam, coal. Major inventions and new knowledge in metal shaping gradually contributed to the emergence of the first factories and cities, as we know them today. Some connect the First Revolution with pollution and poor working conditions, but it has also lead to an increase in employment opportunities and the acceleration of economic, human and material exchanges.

The Second Industrial Revolution

The Second Industrial Revolution (a.k.a. the Technological Revolution) is a period of rapid industrialization as a consequence of the expansion of electricity, petroleum, and steel. It started in the 1850s and finished just about 1914 when WW1 started.

As new sources of energy emerged and the steel industry rapidly grew, new communication and transportation means were invented. The rapid growth of productivity, summoned by the industrialization, lead to a dramatic fell in goods’ prices. Even though unemployment rose as the machines displaced many labourers, living standards significantly improved.

The Third Industrial Revolution

The third Industrial Revolution represents the period of the emergence of nuclear energy and the rise of electronics from the 1960s until the 2000s-2010s. The rising era of high-level automation: improved telecommunications; invented computers, which contributed to space researches and biotechnology.

Since the Third Revolution, things and devices have been automated using IT and electronics. People began to think more about sustainability and therefore minimize non-renewable energy consumption by relying on renewable one.

The Fourth Industrial Revolution

The latest Industrial Revolution (Industry 4.0) is a fusion of technologies, which started in the late 2010s and is merging, blurring the lines between the digital, physical and biological spheres. Industry 4.0 confirmed Darwin’s thought that the ones who are most adaptable to change will survive: once we, humans, implement smart technologies, connected machines will interact and make decisions autonomously.

According to the founder and executive chairman of the World Economic Forum, Klaus Schwab, unlimited processing power, storage capacity and access to knowledge possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.

Why should we care?

The Fourth Revolution has already had an impact on the consumers who were able to afford and access the digital world and its new services that increased the efficiency and pleasure of people’s personal lives. Klaus Schwab also notes that in the future, transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.

Despite some economists’ concern about the possible inequality and potential exacerbated gap between returns to capital and returns to labour, many believe that the smart approach of the Fourth Industrial Revolution will cause an increase in safe and rewarding jobs. The fifth and current President of South Africa, Ramaphosa, also expressed that the Fourth Industrial Revolution “has the potential to solve many of the social problems we face by better equipping us to combat disease, hunger, and environmental degradation.”

How Industry 4.0 changes business

As regarding the supply side, many industries are seeing new ways of existing needs and the disruption of existing industry value chain created by the introduction of new technologies and global digital platforms for research, development, marketing, sales and distribution.

These smartphone-suitable technology-enabled platforms not only create a new way of consuming goods, but they also minimize the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. Occurring demand for transparency and consumer engagement forces companies to adapt and rethought how they create and deliver services or goods.

According to economist Klaus Schwab, business leaders need to understand the changing environment, challenge the assumptions of their operating teams, and relentlessly, continuously innovate. As the changes are happening independently from our will, we can only ride the wave or being overwhelmed from it or fall behind.

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