Impact of the Fourth Industrial Revolution on Future Employment.
The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
The Fourth Industrial Revolution is a way of describing the blurring of boundaries between the physical, digital, and biological worlds. It’s a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies.
In order to understand more about the Fourth Industrial Revolution, it is essential to talk briefly about the three previous industrial revolutions as each of them introduced new resources and technologies which have led us to where we are today.
The first industrial revolution occurred in 1765 when Mechanization emerged by replacing animal and manual labor with machinery. The second revolution happened one century later, when mass production was introduced in 1870 by using electric power to create mass production. Thirdly, in 1969 the digital revolution and globalization took place thanks to the implementation of the internet and the World Wide Web (WWW) leading to the fourth and current industrial revolution taking place by emerging new technologies.
By comparing the fourth revolution to the other three we can find drastic differences. Unlike the previous ones, the scale, scope, complexity and transformation of the Fourth Industrial Revolution is something humankind has never experienced before until today. However, this revolution is only a prolongation of the Third Industrial Revolution only at a greater speed.
The Fourth Industrial Revolution, also known as Industry 4.0, involves the adoption of cyber-physical systems like the Internet of Things and Internet of Systems.
- Internet of Things. Also known as IoT, the Internet of Things is a network of interconnected smart devices that allow each separate device to interact (i.e. send or receive data) from other devices on the network.
- Internet of Systems. Business-owned systems that can collect data from IoT networks to make independent decisions about your business’ marketing campaigns, sales, etc.
As the Internet of Things becomes more main stream, smart devices will have more access to data which could allow them to become more independent. Eventually, smart devices might have enough information to make autonomously make decisions and control key business processes like supply chains without human input.
Whether autonomous machines are a good or bad thing, largely depends on who you ask. Some envision a dystopian, hellish world straight out of a Sci-Fi film where robots have taken all the jobs leaving humans unemployed and miserable. Without employment, our lives would become meaningless leading to drug addictions, violence and widespread public unrest.
Others, most, believe that robots would eradicate the rather dull aspects of our work and allow humans to focus on more challenging, fulfilling tasks leading to an overall happier and more productive society. Regardless, once the Fourth Industrial Revolution reaches full maturity, it’ll impact nearly every industry in every country.
The global labour market is increasingly adopting new technology. New technology makes it easier for companies to automate routine tasks and could disrupt the balance between job responsibilities completed by humans and those completed by machines and algorithms. With smart technology becoming more main stream, we need to consider the impact using this new technology will have on our society and workforce.
Transformations and disruptions are already occurring within labour markets across the world. People routinely store images and documents in the cloud, our emails remind us to send follow-ups and we can turn on light bulbs with a simple voice command.
Over the last twenty years, the use of new technology has caused some roles to disappear while also creating new, previously unheard of job titles. For example, the rise of online flight comparison sites has drastically reduced the number of physical travel agents and advancements in mobile technology have made switchboard operators obsolete. On the other hand, technological advancements have also led to the emergence of brand new job titles like app developers, social media marketers, and data scientists.
So, will these changes improve or hinder our current standard of living and our future of work? To find the answer, we’ll need to explore the Fourth Industrial Revolution a bit closer including its potential impact and benefits.
We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.
There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.
The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.
Already, artificial intelligence is all around us, from self-driving cars and drones to virtual assistants and software that translate or invest. Impressive progress has been made in AI in recent years, driven by exponential increases in computing power and by the availability of vast amounts of data, from software used to discover new drugs to algorithms used to predict our cultural interests. Digital fabrication technologies, meanwhile, are interacting with the biological world on a daily basis. Engineers, designers, and architects are combining computational design, additive manufacturing, materials engineering, and synthetic biology to pioneer a symbiosis between microorganisms, our bodies, the products we consume, and even the buildings we inhabit.
The discussion on how will “The Fourth Industrial Revolution” affect employment in the next years has increasingly been a topic of many debates lately. It has and will continue changing the way we live, we work, the way the economy works and how we are governed (World Economic Forum, 2016).
As many economic journals have reported, this is already happening. The Financial Times reported in 2016 that between 2000 and 2010, of all the jobs lost in the US, 85% had been lost over new technologies. The Bank of England stated that two thirds of all jobs were capable of being automated within the next 20 years. It is therefore evident that the Fourth Industrial Revolution has already come and that it has already impacted the workforce increasingly during the last decade (World Economic Forum, 2016).
The business world claims to be adapting to the emerging new technologies and how they will affect their businesses and while this might be true in a certain amount, this revolution has to date, not been discussed or planned for. Proof of this is how big corporations tend nowadays to merge or ally with smaller start-ups. This is because these smaller businesses bring fresh ideas into the market, and big companies therefore profit for their technological expertise and take them in. Examples of this could be new self-driving technology car manufacturer Waymo who allied in 2019 with Renault-Nissan to create a self-driving car project. However, as stated in various articles, such alliance is only based on ideas and experimentation and does not have a specific project specification (Financial Times, 2019).
It could be argued that the public sector will be the most likely to be affected by these changes in technology. Different industries such as transport will be affected by the implementation of self-driving technology. Also, the retail industry workers will be affected by digitalization and the increasing use of online retail. The health industry will feel the impact from the new implementation of automated surgery machines (Privacy Sense, 2017).
Importance of fourth industrial revolution
The Fourth Industrial Revolution is changing how we live, work, and communicate. It’s reshaping government, education, healthcare, and commerce—almost every aspect of life. In the future, it can also change the things we value and the way we value them.
Impact of the fourth industrial revolution
One of the main effects of the Fourth Industrial Revolution is increased human productivity. With technologies like AI and automation augmenting our professional lives, we’re able to make smart choices, faster than ever before. But it’s not all rosy, and we’re not trying to sugarcoat things for you.
Impact on employment
In addition to new roles and responsibilities, the 4th Industrial Revolution could also lead to more companies employing specialist contractors or remote workers. It can allow them to recruit a global workforce, increase employee loyalty and commitment, scale at a quicker pace and reach new levels of productivity.
Impact of the Future of Work and Recruitment
The Fourth Industrial Revolution is mainly composed of four technological aspects: high-speed mobile internet, artificial intelligence and automation, the use of big data analytics, and cloud technology. It has been discussed that the two aspects that will have the biggest impact on employment and its future are AI and automation. A study released by Mckinsey Global Institute revealed that one fifth of the global workforce will be impacted by the integration of AI and automation. Having a bigger impact in countries such as Germany, the US and the UK. Furthermore, by 2022, companies will decrease their numbers of full-time employee members by 50% and by 2030, robots will replace 800 million workers worldwide (Change, 2017).
Even though these numbers might sound scary, this might just mean that these changes within the workforce could also experience a positive impact. The employees with the right skills that have been replaced could take on more beneficial roles. The World Economic Forum revealed that 38% of businesses believe AI and automation technology will allow people to take on to new motivating and productivity enhancing roles, meanwhile 25% of companies believe this will result in the emergence of new roles for people to take on (World Economic Forum, 2017).
The fourth Industrial Revolution is largely driven by four specific technological developments: high-speed mobile Internet, AI and automation, the use of big data analytics, and cloud technology. Of these four technologies, AI and automation are expected to have the most significant impact on employment figures within the global workforce.
A recent study released by McKinsey Global Institute reports that roughly one-fifth of the global workforce will be impacted by the adoption of AI and automation, with the most significant impact in developed nations like the UK, German and US. By 2022, 50% of companies believe that automation will decrease their numbers of full-time staff and by 2030, robots will replace 800 million workers across the world.
While these figures may sound depressing, it may also simply represent a change within the workforce and displaced employees could, with the right skills, take on more beneficial roles. The World Economic Forum reports that 38% of businesses believe AI and automation technology will allow employees to carry-out new productivity-enhancing jobs while over 25% of companies think automation will result in the emergence of new roles.
According to the 2019 Global Trends report released by LinkedIn, 76% of recruiters and hiring managers think that the 4th Industrial Revolution, or more specifically automation and AI, will have a significant impact on the recruitment industry. Specialist recruiters, especially within sectors that are highly vulnerable to automation, may need to upskill or shift their focus to a new discipline to stay in the game.
Not only will recruiters have to deal with job losses across industries, but aspects of their roles could also be automated. Robots are already being used with the recruitment industry to make recruiters’ jobs easier, quicker and more fulfilling. When it comes to talent acquisition, it can be easy to get bogged down in admin tasks like screening resumes or scheduling interviews. Over 52% of talent acquisition leaders admit that their biggest challenge is matching the right candidate to the right role.
AI technology can help. Intelligent screening software, like Ideal, can help recruiters process large volumes of CVs to find the ideal candidate. It examines current employees’ skill sets and attributes to find the perfect candidate to join the team. It can even pull information about the candidate from their social media profile or open-source company databases. Chatbots can be used to answer candidates’ questions or provide feedback and online interview software can be used to analyze interviewees’ answers including their word choice, speech patterns and facial expressions to determine their suitability for the role.
Such innovative technology poses both an opportunity and threat to recruiters. On the one hand, AI technology could allow recruiters to work faster and smarter by streamlining front-end processes remove boring and dull tasks and ultimately improve the clients and candidates experience. On the other hand, as AI technology becomes smarter, it could eventually replace recruiters.
BBC reports that human resource administrative workers have an 89.7% chance of being replaced by a robot. However, human resource managers or directors only have a 32.2% chance of being replaced by a robot.
Future of Work
“These transformations, if managed wisely, could lead to a new age of good work, good jobs and improved quality of life for all, but if managed poorly, pose the risk of widening skills gaps, greater inequality and broader polarization.” – World Economic Forum, 2018 Report
On some level, workforce changes and technological advancements are normal and to be expected of any developing society. Some worry that the 4th Industrial Revolution could create a dystopian world where robots have taken our jobs and there’s a massive wealth disparity between those that own the robots and those that don’t. However, automating key tasks could eradicate the more tedious aspects of our jobs and allow human employees to focus on more meaningful, fulfilling tasks.
Here at Change Recruitment, we prefer to think that the Fourth Industrial Revolution will have a mostly positive impact on the future of work. It’ll allow us to focus on more meaningful tasks and help people across every industry complete their jobs to a higher standard. We’re excited about the upcoming changes and are currently looking for ways to integrate AI technology into our workplace.
With rapid advancements in technologies such as autonomation and artificial intelligence, the fourth revolution is changing the way we live, work and think. Many businesses are beginning to discuss and prepare for how this revolution will affect them.
With UK employment rates seeing an all-time high in recent years, businesses have the added challenge in finding the candidates needed to fill the ever-changing roles in this upcoming digital evolution. Over the centuries, in every industrial revolution we have had a significant degree of disruption, but it has also presented an opportunity for economic growth and social progression.
A recent study released by McKinsey Global Institute reports that by 2022, 50% of companies believe that automation will decrease their numbers of full-time staff and, by 2030, robots will replace 800 million workers across the world. As alarming as these figures may sound, it represents a change within the workforce and the need for employees to adjust skills sets to take on more beneficial roles.
The rise of autonomation will require numerous individuals to adopt new skills, both IT and non-IT related, in order to remain employable. The future of work belongs to those with emotional and social intelligence, who can spend more time on creative, collaborative, and complex problem-solving tasks that machine automation isn’t suited to handle.
The World Economic Forum’s “Future of Jobs” report found that 35 per cent of core skills will change between 2015 and 2020. As the pace of technological change quickens, it’s the responsibility of employers to empower and educate their workforce to keep up with the pace of change. It’s already evident that talent development, lifelong learning and career reinvention are critical for the future workforce.
Education is at the forefront of how we can flourish within the Fourth Industrial Revolution. Our traditional education has been mono disciplinary, where we work towards a specific skill set and qualification. But with the 4IR, we need to adapt to an interdisciplinary system, where people can develop their skill set and mindset rather than one field in particular.
The rise of technologies means that personalized experiences will hold more importance. Therefore, businesses should do what they can to offer customers the best experience, in terms of security, data handling and privacy. It’s crucial that recruiters understand why these new technologies are beneficial and how they can utilize them to help their business and get ahead of the game.
It’s hard to assess the outcome of the future. However, in the meantime, it’s important to remember the significance of change and its normality. Businesses need to keep up with the pace by attracting, recruiting and developing employees to compete in the new jobs market.
We will all collectively have to broaden our skills sets, learn and adopt the new technologies available to us. With these technologies it means we have a library of knowledge which can be easily accessed in order to adapt to the times.
In addition to new roles and responsibilities, the 4th Industrial Revolution could also lead to more companies employing specialist contractors or remote workers. Due to new technology and changing demands, employers may also become more supportive of existing employees wanting to work remotely or flexibility.
Giving potential and current employees more freedom to work how, when and where can be very beneficial for companies. It can allow them to recruit a global workforce, increase employee loyalty and commitment, scale at a quicker pace and reach new levels of productivity. Employees benefit too as not having to commute means they’ll have more free time, a better work-life balance and greater flexibility leading to overall employee satisfaction and commitment.
What Jobs are the Most Likely to be Impacted?
The 4th Industrial Revolution will impact nearly every industry with The Economist predicting that 50% of jobs are vulnerable to automation. However, some industries are more likely to be automated than others as robots, like human employees, have a particular specific skill set. Within the near future, we can expect to see a reduction in the number of full-time staff in manufacturing and agricultural roles as many of these positions are already being phased out due to increased automation. Robots can also more effectively and safely handle tasks within industrial plants and as such their use in manufacturing dates back as early as the 1970s.
The OECD released a list showing the likelihood of roles, within specific industries, becoming obsolete or automated. At the top of the list are occupations within food preparation, construction, cleaning, driving and agricultural sectors.
In addition to manufacturing roles, automation may also impact postal and courier services, shipping and delivery and service industry jobs. Don’t see your industry on the list? BBC has put together a handy calculator to help you determine how likely it is that a robot will replace you.
Jobs Least Likely to be Impacted
While robots may be better at quickly, efficiently and safely completing physical, predictable tasks, robots aren’t better at everything. Currently, most robots lack social and cognitive skills. They might be able to work as chatbots to answer customer questions and complaints within a given framework, but they generally lack enough empathy to adequately support or care for customers and patients.
As a result, roles that involve recognizing cultural sensitivities, caring for others, creative or complex reasoning or perception and manipulation are unlikely to be automated. So, social workers, nurses, nuclear engineers, teachers and writers can rest assured that they won’t be replaced by robots any time soon.
The impact on business
An underlying theme in my conversations with global CEOs and senior business executives is that the acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed. Indeed, across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution are having a major impact on businesses.
On the supply side, many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. Disruption is also flowing from agile, innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.
Major shifts on the demand side are also occurring, as growing transparency, consumer engagement, and new patterns of consumer behavior (increasingly built upon access to mobile networks and data) force companies to adapt the way they design, market, and deliver products and services.
A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the “sharing” or “on demand” economy. These technology platforms, rendered easy to use by the smart phone, convene people, assets, and data—thus creating entirely new ways of consuming goods and services in the process. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. These new platform businesses are rapidly multiplying into many new services, ranging from laundry to shopping, from chores to parking, from massages to travel.
On the whole, there are four main effects that the Fourth Industrial Revolution has on business—on customer expectations, on product enhancement, on collaborative innovation, and on organizational forms. Whether consumers or businesses, customers are increasingly at the epicenter of the economy, which is all about improving how customers are served. Physical products and services, moreover, can now be enhanced with digital capabilities that increase their value. New technologies make assets more durable and resilient, while data and analytics are transforming how they are maintained. A world of customer experiences, data-based services, and asset performance through analytics, meanwhile, requires new forms of collaboration, particularly given the speed at which innovation and disruption are taking place. And the emergence of global platforms and other new business models, finally, means that talent, culture, and organizational forms will have to be rethought.
Overall, the inexorable shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business. The bottom line, however, is the same: business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.
Industries More Likely to be Impacted
With the integration of AI and automation technologies, some industries will adapt better than others. The industry that will more likely be affected by these changes in technology is the manufacturing and agricultural industries. This is because many of its job positions have already disappeared or significantly decreased over the last few decades (from the 1970’s) due to the increase of automation. Robots can safely handle tasks within industrial plants without putting in risk anyone’s safety.
Other industries such as retail, food preparation or transport will likely be hugely impacted by it as well. The retail industry is facing great changes with the increase of use in online retail by users and digitalization. Therefore, this leaves businesses with less need of having physical stores, which is why many brands close them, or reduce their number of physical stores to a minimum. This is already happening, in August 2019, Karen Miller closed all their physical stores and sold their brand to online retailer Boohoo.com for £18 billion leaving 11.000 at risk (S. Butler et J. Jolly, 2019). Meanwhile, other brands such as Zara have incorporated self-checkouts outside their fitting room in some of their stores replacing then cashiers in order to improve efficiency.
Moreover, the food industry is facing internal changes as well as shown in the graph above it is one of the most impacted industries by automated technology. Fast food chains are already operating with robots, such as Macdonald’s who have implemented a self-checkout system using machines. However, cash points have not been completely replaced, as they have maintained their traditional cash payment option. Also, robots are already being used in the kitchens of fast food companies such as the robot Flippy who as the name indicates it’s in charge of flipping hamburgers non-stop (R. Premarck, 2018).
Industries Less Likely to be Impacted
Some jobs that will likely never be able to be replaced by automated technology are artists and creatives. (T. Pickersgill, 2018). This is because as Tom Pickersgill, CEO of Broadstone says: “Humans use their life experiences, their emotions and their creativity to bring things to life. While robotics and AI uses data to learn and improve.” That is something that will never change unless adding emotions to a robot machine is achieved.
Furthermore, data can’t really produce genuine works of art that will engage an audience through shared experiences. Whether that is a painting, a song or simply a voice. Hairdressers, healthcare workers, caretakers, therapists and social workers, and teachers all form part of this “safe zone’ as well. Teachers, as shown in the graph above, are the less likely job type to be replaced by automated technology and AI. This is because a teacher is made of people’s skills, empathy, patience and understanding, and all these skills are essential for creating emotionally confident young people. Therefore, only a human can be capable of achieving this (T. Pickersgill, 2018).
The impact on government
As the physical, digital, and biological worlds continue to converge, new technologies and platforms will increasingly enable citizens to engage with governments, voice their opinions, coordinate their efforts, and even circumvent the supervision of public authorities. Simultaneously, governments will gain new technological powers to increase their control over populations, based on pervasive surveillance systems and the ability to control digital infrastructure. On the whole, however, governments will increasingly face pressure to change their current approach to public engagement and policymaking, as their central role of conducting policy diminishes owing to new sources of competition and the redistribution and decentralization of power that new technologies make possible.
Ultimately, the ability of government systems and public authorities to adapt will determine their survival. If they prove capable of embracing a world of disruptive change, subjecting their structures to the levels of transparency and efficiency that will enable them to maintain their competitive edge, they will endure. If they cannot evolve, they will face increasing trouble.
This will be particularly true in the realm of regulation. Current systems of public policy and decision-making evolved alongside the Second Industrial Revolution, when decision-makers had time to study a specific issue and develop the necessary response or appropriate regulatory framework. The whole process was designed to be linear and mechanistic, following a strict “top down” approach.
But such an approach is no longer feasible. Given the Fourth Industrial Revolution’s rapid pace of change and broad impacts, legislators and regulators are being challenged to an unprecedented degree and for the most part are proving unable to cope.
How, then, can they preserve the interest of the consumers and the public at large while continuing to support innovation and technological development? By embracing “agile” governance, just as the private sector has increasingly adopted agile responses to software development and business operations more generally. This means regulators must continuously adapt to a new, fast-changing environment, reinventing them so they can truly understand what it is they are regulating. To do so, governments and regulatory agencies will need to collaborate closely with business and civil society.
The Fourth Industrial Revolution will also profoundly impact the nature of national and international security, affecting both the probability and the nature of conflict. The history of warfare and international security is the history of technological innovation, and today is no exception. Modern conflicts involving states are increasingly “hybrid” in nature, combining traditional battlefield techniques with elements previously associated with non state actors. The distinction between war and peace, combatant and noncombatant, and even violence and nonviolence (think cyber warfare) is becoming uncomfortably blurry.
As this process takes place and new technologies such as autonomous or biological weapons become easier to use, individuals and small groups will increasingly join states in being capable of causing mass harm. This new vulnerability will lead to new fears. But at the same time, advances in technology will create the potential to reduce the scale or impact of violence, through the development of new modes of protection, for example, or greater precision in targeting.
The impact on people
The Fourth Industrial Revolution, finally, will change not only what we do but also who we are. It will affect our identity and all the issues associated with it: our sense of privacy, our notions of ownership, our consumption patterns, the time we devote to work and leisure, and how we develop our careers, cultivate our skills, meet people, and nurture relationships. It is already changing our health and leading to a “quantified” self, and sooner than we think it may lead to human augmentation. The list is endless because it is bound only by our imagination.
People relationship with their smart phones is a case in point. Constant connection may deprive us of one of life’s most important assets: the time to pause, reflect, and engage in meaningful conversation.
One of the greatest individual challenges posed by new information technologies is privacy. We instinctively understand why it is so essential, yet the tracking and sharing of information about us is a crucial part of the new connectivity. Debates about fundamental issues such as the impact on our inner lives of the loss of control over our data will only intensify in the years ahead. Similarly, the revolutions occurring in biotechnology and AI, which are redefining what it means to be human by pushing back the current thresholds of life span, health, cognition, and capabilities, will compel us to redefine our moral and ethical boundaries.
Challenges and opportunities
Like the revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise global income levels and improve the quality of life for populations around the world. To date, those who have gained the most from it have been consumers able to afford and access the digital world; technology has made possible new products and services that increase the efficiency and pleasure of our personal lives. Ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game any of these can now be done remotely.
In the future, technological innovation will also lead to a supply side miracle, with long-term gains in efficiency and productivity. 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.
At the same time, as the economists Erik Brynjolfsson and Andrew McAfee have pointed out, the revolution could yield greater inequality, particularly in its potential to disrupt labor markets. As automation substitutes for labor across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor. On the other hand, it is also possible that the displacement of workers by technology will, in aggregate, result in a net increase in safe and rewarding jobs.
People cannot foresee at this point which scenario is likely to emerge, and history suggests that the outcome is likely to be some combination of the two. However, there is one thing that in the future, talent, more than capital, will represent the critical factor of production. This will give rise to a job market increasingly segregated into “low-skill/low-pay” and “high-skill/high-pay” segments, which in turn will lead to an increase in social tensions.
In addition to being a key economic concern, inequality represents the greatest societal concern associated with the Fourth Industrial Revolution. The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital the innovators, shareholders, and investors which explain the rising gap in wealth between those dependent on capital versus labor. Technology is therefore one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries: the demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. The result is a job market with a strong demand at the high and low ends, but a hollowing out of the middle.
This helps explain why so many workers are disillusioned and fearful that their own real incomes and those of their children will continue to stagnate. It also helps explain why middle classes around the world are increasingly experiencing a pervasive sense of dissatisfaction and unfairness. A winner takes all economy that offers only limited access to the middle class is a recipe for democratic malaise and dereliction.
Discontent can also be fueled by the pervasiveness of digital technologies and the dynamics of information sharing typified by social media. More than 30 percent of the global population now uses social media platforms to connect, learn, and share information. In an ideal world, these interactions would provide an opportunity for cross-cultural understanding and cohesion. However, they can also create and propagate unrealistic expectations as to what constitutes success for an individual or a group, as well as offer opportunities for extreme ideas and ideologies to spread.
Shaping the future
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.
To do this, however, we must develop a comprehensive and globally shared view of how technology is affecting our lives and reshaping our economic, social, cultural, and human environments. There has never been a time of greater promise, or one of greater potential peril. Today’s decision-makers, however, are too often trapped in traditional, linear thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping our future.
In the end, it all comes down to people and values. We need to shape a future that works for all of us by putting people first and empowering them. In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to “robotize” humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature creativity, empathy, stewardship it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent on us all to make sure the latter prevails.
Impact on the public & private sector
The Fourth Industrial Revolution is changing the way we live, work and think. It’s bringing with it the rapid advancement of technologies, especially those related to advanced robotics, artificial intelligence, and machine learning. As technology becomes invisible it shapes the lives of young adults and workers across the globe, erasing borders and allowing people to work from anywhere. Work is no longer a place you go, and requires interdisciplinary thinkers that can be creative, think critically and solve problems as they arise. These are just some of the top 10 following skills the World Economic Forum has identified as being essential for success over the next decade:
- Complex problem solving;
- Critical thinking;
- People management;
- Coordinating with others;
- Emotional intelligence;
- Judgment and decision making;
- Service orientation;
- Cognitive Flexibility.
Private & public sector: tackling the challenge
It’s important to understand how the evolution of technology creates opportunities and implications on how industry and markets operate and evolve. Higher education institutions need to think ahead and establish purpose driven collaborative partnership opportunities with industry in order to share challenges, ideas and co-create solutions to real world challenges.
The Skills Gap
As the need for the future skills economy evolves to become more interdisciplinary with critical soft skills becoming essential, organizations will need to adopt a new approach to learning. The public sector needs to consider how to better prepare students for future work-integration based on the skills-of-the-future today.
Higher education and organizations both need to prepare the next generation for the mindset of lifelong learning. Lifelong learning can take many forms including attending events such as conferences, team workshops, innovation challenges, as well as taking skills courses and certifications.
This shift also needs to take into account how we assess a prospective employee’s qualifications. No longer is a degree sufficient, now the future employer will recognize the individual’s portfolio of work, which may include startup pitches, code projects or creative designs that can take on many forms from data visualizations to illustrations.
To conclude, with the Fourth Industrial Revolution and the emergence of new technologies such as AI and automation technology, businesses are trying to adapt to the changes they are already facing and will continue to face in the future. Robots will be taking place and replacing some of the current jobs which are already starting to disappear. Other industries will remain in the “safe zone” as they require some skills and factors a robot will never be able to have, as they are human characteristics only. This change in employment doesn’t necessarily have a negative impact for the future, as these jobs could be replaced by a more motivated and enhancing job or the emergence of new jobs into society.
It would be relevant to recommend businesses to thoroughly prepare themselves for future changes, and to think about the more suitable decisions for them to enable a continuous healthy growth without the need of risking lots of jobs which would lead to employee disappointment, and a bad image of the enterprise. Thinking about what is best for the enterprise internally and externally and preparing for all case scenarios beforehand. Moreover, not only businesses but people should consider these changes as well and prepare themselves to fit into the upcoming changes, preparing themselves to be able to take more technological roles etc. Students for example, should consider this when choosing what career they want to study, as this will shape their future later on.
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