The World wants to move towards a Fourth Industrial Revolution, and this was the major point of discussion at the 2016 Annual Summit meeting of World Economic Forum. The first Industrial revolution was about moving to machines from hand made tools,, the second one about assembly lines pioneered by Henry Ford and third one about Information Technology and Digitization of manufacturing processes.
The fourth Industrial Revolution would be about:
- Embracing a number of contemporary automation, data exchange and manufacturing technologies
- Blurring lines between physical, digital and biological spheres
- Driver less cars + artificial intelligence + smart robotics + nano technology will the way traditional industry works
The current Industrial Revolution will be all about increasing efficiencies in manufacturing by bringing in more automation and reducing the human connect. It threatens low skilled jobs in manufacturing. It has the ability to vary the basic tenets of the current world order and political systems.
Fourth Industrial Revolution and Growing Isolationism
The world is observing an undercurrent against globalization in the Western nations, which had once been the vociferous advocates of a single world order of free trade, investment and movement of capital. Their economies benefitted from the low cost manufacturing in emerging economies, which drove consumerism in the West and improved incomes in India and China. However, this offshoring of manufacturing led to a loss of low skilled jobs in the Western countries. Also, the real beneficiaries of such a system were the MNCs which maximized their profits, the losers being average workers, whose jobs were lost. This drove a wedge between these and caused sharp income inequalities in the West.
Now, the West is talking about Fourth Industrial Revolution, artificial intelligence and smart robotics to reduce the human interference in manufacturing. This will surely reduce the dependence of the large manufacturing firms on the emerging economies for low cost labour. Hence, President Donald Trump makes perfect sense when he talks about preventing companies from going abroad and wants them to invest in robotics and artificial intelligence.
The Fourth Industrial Revolution has also given a push towards new form of social welfare, namely, the Universal Basic Income (UBI).
A drive towards Universal Basic Income
The UBI is being given a serious thought in the Western Academic circles. It ensures a basic income to all the citizens of the country to ensure a Minimum Standard of Living for them. UBI is become all the more imperative owing to the loss of jobs by moving towards the Fourth Industrial Revolution. Such a concept was introduced in Switzerland, which although rejected in a referendum, started an international debate. On a pilot basis, UBI is being adopted by Finland, which provides basic income to the unemployed.
India has also started public discussions on the utility of UBI and wants to introduce it by replacing all other welfare schemes provided by the state. Along with being more effective, it promises to reduce leakages in delivery of services. However, highly prohibitive fiscal costs have ensured it remains on the Economic Survey only.
Fourth Industrial Revolution is bound to bring paradigm changes in the world order, and the nations which can catch up to the new normal will be the ones prospering through the 21st century.