Chinese Communist PartyIndustry 4.0 offers amazing possibilities for everything from manufacturing to medicine, but we should be aware of its spin-off effects, writes Linda Nazareth.

By Linda Nazareth, June 12, 2019

Have you ever asked Siri what the weather was like? Or commanded Alexa to put on your favourite playlist? If so, you may already figure that technology is making your world a better place. And who could argue?

Technology and the “internet of things” has changed our lives, often for the better. In a larger sense, however, a debate continues over who will ultimately be the winners and losers in what is now being called “Industry 4.0.” There is a lot at stake.

You may know Industry 4.0 as what was originally called the Fourth Industrial Revolution, or you may have managed to miss both terms. After all, reference to the latter started only in 2015, when the term was coined by World Economic Federation (WEF) founder Klaus Schwab, who observed that the world had entered a period in which things were changing quickly enough that the term “revolution” was apt and in industrial terms it was, arguably, the fourth time this had happened.

The First Industrial Revolution started in the late 18th century and brought with it the mechanization and steam power that moved the world away from hand production. The Second Industrial Revolution came about 100 years later; division of labour, mass production and electricity were its hallmarks. The Third Industrial Revolution is the subject of a bit more debate in terms of its starting point, but it’s the one that gave you the ability to play Candy Crush on your smartphone. Put another way, it harnessed the powers of digitization that came about with the space technology of the 1960s.

So, what is the Fourth Industrial Revolution and why is it so revolutionary? Well, it pretty much builds on the Third Industrial Revolution. In the words of the WEF, it is “characterized by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres.” In addition to talking toasters and Alexa, it is the technology from this revolution that is fuelling blockchain, Big Data and allows us to summon rides from our smartphones. It’s giving companies the power to figure out what someone looks like just by using a YouTube clip of their voice. Depending on your viewpoint, Industry 4.0 registers somewhere between super cool and absolutely terrifying.

What differentiates this revolution from the others? In some ways, nothing: With each revolution, there have been worries over who would own the gains from new technologies and who would be left on the sidelines.

But there are extra concerns this time. Some are around ethics (with whom does Alexa share your playlist, anyway?) And, perhaps most importantly, there are worries about the pace at which change is happening. The move to Industry 4.0 is happening much faster than we are used to and it is reaching into just about every sector. With such rapid disruption, it is probably unrealistic to expect regulation to keep pace.

There is also an inequality aspect to all of this. Up to now, every industrial revolution has resulted in positive effects for workers, albeit with a lag. This time around, it is not clear whether that will be the case or how long any lag might be.

The timing is not great, given that any way you parse the figures shows inequality is already in full flight around the world. A report from Oxfam released this year showed billionaires in Canada saw their wealth increase by $20-billion in 2018, while at the same time the 4.5 percent of the country’s wealth held by the poorest half of Canadians remained static. That is better than the global picture, where worldwide billionaire wealth rose by $3.3-billion a day, or 12 percent, and the wealth held by the poorest half of the world’s population decreased by 11 percent.

To be sure, there is a risk that Industry 4.0 will make all of this worse. The gains from new public offerings accrue to a few stakeholders only and, yes, robots and their ilk will wipe out some jobs and leave many scrambling for anything more than non-voluntary, fractional employment. Already, hugely profitable tech companies such as Google have more contract employees on their payrolls than they do permanent ones. As we move forward, there will be a need for workers with both specialized tech skills as well as capabilities in a wide variety of softer skills. For everyone else, prospects could well darken, widening income gaps and making earning ever less secure.

Industry 4.0 offers amazing possibilities for everything from manufacturing to medicine, not to mention all the nifty things Siri can tell us. Of course, we want to be leaders in adopting the technology it brings to us rather than trying to stop it (not that this is possible at this point anyway). But as we enjoy the gains from this new industrial revolution, perhaps we should be more cognizant than has been true in the past about its spin-off effects. This may be the most revolutionary revolution of them all and it would serve us well to see that it will inevitably have an impact well beyond talking toasters.

Linda Nazareth is a senior fellow at the Macdonald-Laurier Institute. Her book Work Is Not a Place: Our Lives and Our Organizations in the Post-Jobs Economy is now available.