Since the World Economic Forum’s gathering in Davos earlier this year, there’s been much talk about the so-called Fourth Industrial Revolution (4IR), the fusion of digital, physical and biological technologies empowered by artificial intelligence (AI), mass-automation and hyper-connectivity.
Various industry leaders have chimed in with their support for the concept - I’m expecting we’ll hear a lot about it at Dreamforce in a couple of weeks time as Salesforce CEO Marc Benioff is one of the most enthusiastic evangelists of the term.
But I was interested to note that the UK government last week took a long hard look at the idea as well, hosting a debate in the House of Commons with legislators opining on the potential of this new revolution, but also issuing some cautionary warnings as well.
One of the reasons this debate was well-timed was that in the post-Brexit vote age of a Conservative Party government led by Prime Minister Theresa May, there has been much talk of developing an industrial policy for the UK, something that hasn’t been in place for many years. Assuming this takes shape, its form and content will need to be informed by this idea of the 4IR if it is to have any real value.
Conservative MP Alan Mak, who secured the debate in Parliament, summed this up when he declared:
Britain can and should develop an early economic comparative advantage to become a world leader in the new 4IR global economy, but to do this, we must take a proactive, free market approach to policy formulation, and prepare for the impact of disruptive technologies, not just react to them. Put simply, we must make mastering the new 4IR a key part of the Government’s industrial strategy. Just as Britain launched the first industrial revolution 250 years ago, it can and must lead the new 4IR in this new century.
Mak cites the example of defence contractor Lockheed Martin which has used Big Data to develop a new system called Mailmark that helps the UK postal service to track parcels more efficiently as the e-commerce economy grows. This is an example of the benefits of the 4IR, he said:
It is clear that by embracing these new disruptive 4IR technologies, we can create new jobs, deliver new services and generate new economic growth. It is also clear that the countries that are best able to take advantage of the 4IR are those with nimble free market economies, low taxes and a competitive regulatory environment.
Labour MP Peter Kyle warned his fellow legislators that time is not on anyone’s side here as the revolution has begun as people would realise if there wasn’t so much focus on the futuristic aspects:
The Fourth Industrial Revolution will sweep through our economy in a matter of years, rather than the centuries it took the previous industrial revolutions to unfold. Sadly, we have been fed a diet of automated cars and drones to deliver our groceries, which to those of us of a certain age has a certain 'Tomorrow’s World' feeling about it.
The truth is that this revolution is already under way. Consumers are already controlling their home heating and security with their mobile phones. People’s hand-held devices are controlling real-world events via the cloud. That is happening today, but we have barely crossed the start line in this race…There is a danger that the rate of change in our economy will not be matched by the ability to produce and retain the skills that are needed.
Kyle’s Labour Party colleague Chi Onwurah, one of the few politicians with a tech industry background, focused her attention on some of the more challenging side-effects of the 4IR, particularly around workers rights and data:
We have a new set of intermediaries, such as Uber and Deliveroo, whose workers are dis-empowered and to whom they are unaccountable. How much real power does the Uber driver have in relation to Uber? This informal ‘gig economy’ gives workers little security and few rights. These new business models can also put downward pressure on wages and move business risk on to ordinary people, causing stress and a lack of security.
In addition, citizens and consumers face threats to their identity and data. For example, to download an application from the Google Play store, people must first have a Google account, which is used to identify and control their device. How many consumers know that? Indeed, how many MPs in this Chamber right now know who has their data and what they are doing with them? How can we give citizens the skills, as well as the necessary connectivity, to participate fully in the digital economy?
Meanwhile Ronnie Cowan of the Scottish National Party wanted guarantees that the working classes would not be left behind in the 4IR:
The Industrial Revolution failed to lift the landed poor out of poverty. It created vast amounts of wealth, but increasingly that wealth is being accumulated in a smaller and smaller section of society.
I want the UK Government to demonstrate two things: first, how they plan on driving forward the fourth industrial revolution; and secondly, how this technology will be used to benefit the social and economic situation of everyone in society. With an astute eye for the future, the fourth industrial revolution could lead to a period of unrivalled prosperity for this country, but without the Government’s stewardship, these new technologies will only reinforce social, gender and regional inequalities.
This was a theme pick up by Labour’s Ruth Smeeth who predicted that greater prosperity and opportunity from the 4IR are not a foregone conclusion:
The Fourth Industrial Revolution needs to be guided in such a way as to provide equality of opportunity and balanced regional investment. Communities such as mine in the post-industrial regions, long neglected by successive governments and lacking the resources to retrain and up-skill our workforce, could be hit hardest if we get that wrong. The challenge we face is not only to capitalise on the new technologies but to ensure that the rewards are distributed equitably and that everyone has the chance to get ahead.
For the Conservatives, Kevin Hollinrake was concerned about the prospects for small and medium enterprises faced with the challenge from established digital economy enterprises:
The failure rate for high-tech businesses is very high, but investors will countenance that because the rewards are also very high. Investors know that it is almost a winner-takes-all bet. They know that if they get it right, they can land themselves with an Amazon, a Google, an Uber, an Apple, or even a Rightmove or a Zoopla. In many sectors, there is either no competition or competition from just one other body, which puts those businesses in a hugely advantageous position.
The biggest worry I have about some of the businesses that will win in the future is their ability to dominate the entire supply chain. Uber is a good example. When it first came along, we saw it as just something that connected people who wanted a taxi with people who were taxi drivers. Uber has been clear that in the future it wants to be the taxi driver as well. In fact, it does not want any taxi drivers; it will have autonomous vehicles, and will no doubt link up with huge car manufacturers. Toyota, Nissan and other companies are looking at this. Uber will be end to end, taking away small business opportunities from taxi drivers, delivery drivers and HGV drivers.
The situation is similar with Amazon, of course. Small businesses used to engage on the Amazon platform. A small business driver would pick up goods and take them to their destination; in future that will done by autonomous vehicles and drones. Amazon will completely dominate the supply chain, so where is a small business opportunity there?
And of course, across the entire 4IR debate in the UK lies the shadow of Brexit, a point picked up on by Labour’s Stephen Kinnock. who said:
Each of those challenges is exacerbated by the uncertainty that our economy faces as we negotiate Brexit, given that we do not know what our trading relationship with our largest market will be, and likely will not know for some time. In that difficult context, the fourth industrial revolution, which will completely transform the way we live, will be a defining period for our economy.
Will the technology at its heart, left unfettered, entrench the challenges we face, threatening jobs, driving inequality and reducing exportable products as the economy is further limited to services, and further place all the risks and insecurity of the economy on the worker? Or will we use the fourth industrial revolution to transform and brighten our economic future for all our people? Can its fusion of digital technology, intelligence and connectivity shape a new economy, with new models of manufacturing, labour relations and skills development that create jobs, raise living standards and allow us to trade with the world in new ways?
Kinnock once worked for Professor Klaus Schwab, the instigator of the discussion about the 4IR at the World Economic Forum. Kinnock quoted him as saying:
In its most pessimistic, de-humanized 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.
This can only be achieved with hard work, concluded Kinnock.
A useful starting point for further discussion and policy-making. Striking that balance between encouraging innovation and entrepreneurialism while keeping a steady hand on societal concerns is a tricky one to pull off at any time, never more so perhaps than now with the Brexit uncertainties still to be resolved.