The world is on the brink of a revolution, but not one moved by ideologies, religions or nations. It is a technological revolution that looms ever larger on the horizon, and its consequences will be unprecedented and so far-reaching that we can barely conceive of them today.
This will be the Fourth Industrial Revolution. The First brought about mechanisation using water and steam power; the Second used electricity to usher in mass production. Electronics and information technology propelled the Third, which made automation the new means of manufacture. The Fourth, which is disrupting almost every industry in real time, will fundamentally change the ways in which we live, work and connect. It could change the very way we look at the world, forcing us to question ancient ideas such as those of the community and of the self. It may change our very understanding of reality.
More than anything, the Fourth Industrial Revolution is characterised by a blurring of lines. This sets it apart from the previous three, which related to technological progress; the Fourth Industrial Revolution, in contrast, has to do with communication and connectivity. The physical and digital will begin to merge as rapid and exponential increases in computing power propel developments in the fields of artificial intelligence and robotics, nano- and biotechnology, energy storage, autonomous vehicles and the Internet of Things. Our notions of identity, privacy and ownership will change as we yield increasing amounts of data to websites and apps. Citizens will be empowered to express themselves and engage with governments, but also potentially subjected to increasingly intrusive surveillance techniques and tighter control. An economic boom will begin as the cost of trade comes down, products become cheaper to produce and processes become more efficient and more automated. Some worry however that as labour markets are increasingly disrupted, we could see a widening of inequality gaps.
As biotechnological advancements and artificial intelligence prolong our lives, improve our health and enhance our cognition, we will begin to reconsider fundamental questions about morality, ethics and the nature of life and death. So too will we come to question what makes us individual, and what makes us human, as we ‘outsource’ more and more of our faculties to digital agents. And then of course there is the threat of digital weaponry which could be catastrophic. Perhaps more terrifying is the prospect of a single state actor winning a ‘cyber-arms race’ and bending the rest of the world to its will. Unlike the previous industrial revolutions, which unravelled in a linear way, the Fourth will progress exponentially. The velocity of change will make adaptability difficult, which is why decision-makers absorbed by short-term concerns must make time to consider the future.
Already, changes have started to happen: philosophers now question whether what we call the individual ‘self’ is online as much as it is in the real world. Through Google and our smartphones we have the world’s collective knowledge with us at all times, accessible with a few taps on a screen. New platforms, enabled by technology, are disrupting existing industry structures and creating entirely new ways to consume goods and services. And individuals have an increasing number of means by which they can create and build wealth, generating an entrepreneurial landscape and undermining traditional business.
In his book on the subject, Klaus Schwab exhorts leaders and citizens to ‘together shape a future that works for all by putting people first, empowering them and reminding them that all of these new technologies are first and foremost tools made by people for people.’ But this sort of planning doesn’t seem to have started. Or perhaps we’re so familiar now with our digital world that we’ve lost perspective. It’s a truism that the very idea of the smartphone would confuse and terrify someone born in the 19th century, and yet we in the 21st, overburdened as we are with our daily struggles, are quick to dismiss the possibilities of the future as pointless conjecture or the stuff of science-fiction. What we know for certain is that this brave new world poses challenges of a kind we’ve never before seen, and the very fabric and structure of our societies will be tested as we all try to make our way. It’s fair to say that our ability to adapt, at the individual, national and global level, will determine whether or not we survive, and perhaps even flourish, in the world of the Fourth Industrial Revolution.
This article is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments. If something has piqued your interest and you would like to find out more or discuss what investments might be suitable for you, please contact one of our Investment Managers on 020 7337 0777.
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