The Fourth Industrial Revolution: What it Means for The Future of Work
When the First Industrial Revolution took place, it transformed the world of work. People’s working lives, and with them their leisure habits and social status, were completely overhauled.
But now, some experts say, we stand on the precipice of an even more significant change – a revolution that will transform how we live, work and relate to one another. It may even change what it means to be human. To respond to the Fourth Industrial Revolution will require a global effort and a willingness to take nothing for granted.
What are the four industrial revolutions?
The period commonly known as the Industrial Revolution refers to a roughly fifty-year period between the middle of the eighteenth and the start of the nineteenth century. During that time, manufacturing shifted from traditional handmade methods to machines. Suddenly, factories sprung up everywhere and labourers worked with machine tools, often steam powered, to create new goods.
During the Second Industrial Revolution of 1870-1915, otherwise known as the Technological Revolution, electric power came into play. The manufacture of interchangeable parts gave rise to the assembly line, and mass production became possible.
From the end of the First World War, things remained fairly stable until the turn of the twentieth century. That’s when digital technology really began to take off, transforming how we work yet again and becoming known as the Third Industrial Revolution. Suddenly, communication is instantaneous and fully mobile, meaning we can work anywhere, anytime, while industries which used to produce tangible products now deal in the digital sphere.
But while some consider the Third Industrial Revolution to still be in train, a fourth is sneaking up behind it. And it’s this revolution, the Fourth Industrial Revolution, that will really transform what we know as the workplace of today. It’s characterised by emerging technology breakthroughs in a number of fields including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, The Internet of Things (IoT), 3D printing and autonomous vehicles. These technologies blur the lines between human and machine, and carry with them a promise of unprecedented connectivity.
Image credit: TCEA
What can we expect?
1. An increase in disruptors
No matter how old and established your industry, the digital world brings with it the threat of disruption. Technology-enabled platforms, especially those which are mobile-enabled, are everywhere. That has seen a change in how we consume goods and services, and the old barriers to providing those things have begun to fall away.
The digital world also means that the cost of trialling a new idea is lower than it used to be. Not every radical new business concept will succeed, but more of them will try, raising the stakes for the traditional models.
2. A hollowing-out of middle-tier jobs
With automation replacing jobs that have traditionally been done by people, the possibility of job loss looms large. One estimate has the percentage of jobs at risk from automation as high as 47%.
Production is already changing, with some factories producing twice as many products per employee as they did a decade ago, and that trend is likely to continue. The jobs that do remain will be specialist: the logistics experts, engineers, robotics mechanics and designers who are needed to ensure that an automated workforce runs smoothly.
The risk is that as low skilled jobs disappear, income inequality will increase. While it may be a valid fear, it is also true that the previous revolutions haven’t necessarily borne this out.
3. An increase in customer expectations
Customers are marketed to in increasingly targeted ways. Big data means that marketers have a wealth of information on which to draw and can target customers before they’re even aware they might need a product or service. Customers are growing used to this, so much so that if the ad in their social media feed doesn’t align with their interests, they’re mildly baffled.
At the same time, physical products can be enhanced with digital capabilities, and new technologies mean new products all the time. All of this means that customer expectations are sky high, and companies need to be able to keep up.
4. A return to local manufacture
Ironically, the same trends that will see a dip in manufacturing jobs may see them return to local shores. At the moment, most large companies manufacture their products overseas in countries where low wages allow them to reduce overheads. But as labour is increasingly supplanted by robots, the few human workers represent a far smaller percentage of the company’s costs, making it less important to cut costs.
In addition, shifting customer expectations and sophisticated products may make it more important that the designers, manufacturers and sellers of the products are in the same area.
What can we do to prepare?
It’s more important than ever that business leaders prepare for change. That means expanding their thinking away from reliance on tradition and habit, and towards innovation. A good leader will look at their systems and hiring processes to ensure that their work culture encourages diversity of thought so that new ways of thinking aren’t lost. They may also consider re-examining their training and R&D strategies to ensure that each are aligned with future change.
Leaders who can think globally instead of locally and take the long-term strategic view over short-term reactivity will be better prepared for the future of work.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: Economist, The Guardian and the World Economic Forum.