What Goes Around Comes Around

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We’re thinking about the fourth industrial revolution all wrong

The impact of new technology on incomes over the last twenty years also is blamed for some 80 percent of the 4 percent global decline in the share of GDP going to labor in the labor-capital split since the s. The relatively few highly skilled and talented workers, especially those critical to the Third Industrial Revolution, along corporate managers and owners, have been accruing an increasing percentage of the wealth, while the middle class has seen its relative income stagnate and even decline.

Since , wages for young high school graduates in the US have fallen more than 10 percent and those of college graduates 5 percent. Will these trends continue indefinitely? Are your skills a complement to the skills of the computer, or is the computer doing better without you?

Worst of all, are you competing against the computer? Will new technologies reverse this trend and spawn large numbers of new, high-paying jobs, and return the middle class to income growth?

We’re thinking about the fourth industrial revolution all wrong

While the current trends are not encouraging, they are not set in stone either. Many technology optimists and economist forecast that new technologies will create more jobs than are destroyed and even new industries and entire new categories of jobs.

Even in this scenario, there are not likely to be enough of those jobs for all those who are qualified. Moreover, there are likely to continue to be large numbers of workers who are not qualified enough for the high-skill, high-paying jobs of the Third Industrial Revolution, and this could exacerbate social instability and political conflict. Thus, government may need to pursue policies to cushion the effects of the secular shift in the economy, including by raising the minimum wage, revising the tax code, and perhaps even taking currently unpopular step of providing for a guaranteed annual income.

Sentryo would like to give you a quick look back in time at these first three industrial revolutions to define the contours of a fourth revolution which is taking shape right before our very eyes.

Lecture: The smart third industrial revolution and the future of work - 48th St. Gallen Symposium

Following a slow period of proto-industrialization , this first revolution spans from the end of the 18th century to the beginning of the 19th century. It witnessed the emergence of mechanization , a process that replaced agriculture with industry as the foundations of the economic structure of society.

Mass extraction of coal along with the invention of the steam engine created a new type of energy that thrusted forward all processes thanks to the development of railroads and the acceleration of economic, human and material exchanges. Other major inventions such as forging and new know-how in metal shaping gradually drew up the blueprints for the first factories and cities as we know them today.

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Nearly a century later at the end of the 19th century, new technological advancements initiated the emergence of a new source of energy: electricity, gas and oil. As a result, the development of the combustion engine set out to use these new resources to their full potential. Furthermore, the steel industry began to develop and grow alongside the exponential demands for steel.

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Chemical synthesis also developed to bring us synthetic fabric, dyes and fertilizer. Methods of communication were also revolutionized with the invention of the telegraph and the telephone and so were transportation methods with the emergence of the automobile and the plane at the beginning of the 20th century.

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Nearly a century later, in the second half of the 20th century, a third industrial revolution appeared with the emergence of a new type of energy whose potential surpassed its predecessors: nuclear energy. This revolution witnessed the rise of electronics —with the transistor and microprocessor—but also the rise of telecommunications and computers. This new technology led to the production of miniaturized material which would open doors, most notably to space research and biotechnology.

For industry, this revolution gave rise to the era of high-level automation in production thanks to two major inventions: automatons— programmable logic controllers PLCs —and robots. The first industrial revolution used water and steam to mechanize production, the second used electric energy to create mass production and the third used electronics and information technology to automate production.

Will the Third Industrial Revolution Create More Jobs than It Kills? - Atlantic Council

Today a fourth industrial revolution is underway which builds upon the third revolution and the digital revolution that has been taking place since the middle of the last century. This fourth revolution with exponential expansion is characterized by merging technology that blurs the lines between the physical, digital and biological spheres to completely uproot industries all over the world.

The extent and depth of these changes are a sign of transformations to entire production, management and governance systems. Here we are…the fourth revolution is unfolding before our eyes.