4IR Disrupting Human Capital

The world proposed in post-apocalyptic science fiction stories is not on the horizon, but artificial intelligence is now accomplishing more than many realize. Rapid technological advances have created the framework for what many experts are referring to as the Fourth Industrial Revolution. Where steam power once overcame challenges of distance and travel, and electricity created the foundation for modern mass production, leading-edge technologies stand to disrupt dozens of industries, societies and governments.

What Is the Fourth Industrial Revolution?

Where the Third Industrial Revolution revolved around the development of data systems and rapid communications, the Fourth is expected to build on these concepts, moving from the digitization of everything to systems where digital information has real-world impact. Creating machines and systems that interact with the physical world is often considered the foundation of what could become the Fourth Industrial Revolution or 4IR. 4IR is essentially an array of new technologies that combine physical, digital and biological domains.

Technology Leading the World

The rapid pace of technological development is the driving force behind the Fourth Industrial Revolution. That means a multitude of evolving technologies such as AI, robotics, 3D Printing, IOT, the Internet of Things, autonomous vehicles, nanotechnology and quantum computing would play a major role in disrupting markets, the workforce and even how people relate to each other.

Each of these technologies blend many different spheres of life and create something that can streamline economic productivity and improve quality of life. Imagine a world in which virtual assistants work with doctors to diagnose illnesses using at-home testing kits and instant readings. As 3D printing gains ground, there could come a day where going to the mall is virtually superfluous. Consumers can order plans and print their own products. Autonomous vehicles could remove the need for car ownership, with driverless fleets trolling cities, waiting for their next scheduled pickup. The possibility of change is endless, but how close are these technologies, really?

AI and Robots Already Exist

While it could be years before autonomous cars actually hit the roads in large numbers, artificial intelligence and robotics are already affecting job markets. Automation depends on these technologies, and there are dozens of examples. From the ubiquitous ATMs to self-checkout lines, machines already make up part of our daily landscape. Production plants around the world use automated processes to create everything from complex computer parts to cookware and clothing items.

With robotics leading the way to factory automation, it should come as no surprise that AI is leading the way in 4IR. From intelligent virtual assistants to simple scheduling bots and bots that handle several enterprise tasks, AI has come a long way. Even the travel industry uses AI technology to help create suggested vacation packages which human agents wouldn’t be able to piece together for millions of customers. As computers learn to communicate with humans, the results are that many basic tasks require little to no human intervention.

Are Machines Taking Over the Workforce?

With thousands of jobs already gone, many of them factory and manufacturing positions, the fear that increased automation will impact the current workforce is entirely rational. However, it is important to remember that even the smartest machine would still need human oversight for years to come. Automation doesn’t always mean fewer jobs. Consider the ATM as a quick case study. When banks first rolled out ATMs, the thought was that it would lead to fewer tellers and massive layoffs. The reality became that more ATMs meant more branches and even more tellers. All three previous Industrial Revolutions have brought about several changes to the nature of work but they also created millions of new jobs. The Fourth Industrial Revolution is likely to be no different. Unfortunately, what may be impacted are formerly middle-class jobs that could be automated. This is the fear that is perpetuating around the world now. It is true that the relationship between economic growth and human capital will be decoupled in the near future, but it would also bring about incredibly exciting and meaningful new jobs.

The Socioeconomic Divide Impacted by 4IR

New automation technologies will expand their sweep from the lowest paid jobs and enter the realm of middle-class jobs. What the ATM did not do, blockchain technology might. This append-only ledger technology is more than just the foundation of modern cryptocurrencies, it also has the potential to completely disrupt not only banking but several industries en masse. ATMs did not make visits to a teller obsolete, but direct and immediate, completely secure transaction technology might.

As technology tackles some of the most dangerous jobs, it reduces the need to pay more for higher risk positions. Safety comes at the trade-off of a lowered pay scale. The human skill spectrum will need to be redefined and redrawn. Super High Skilled labor would be at the top of the job food chain. This Super Workforce would be the new sought-after talent with very high pay packets. With low-skilled labor at the bottom of the chain already, what about jobs in the middle? The current middle class jobs are the ones that are most likely to be affected. With no middle class, or with middle class becoming poorer, the socioeconomic divide grows apace further with technology.

What Does Automation Mean for the Workforce?

While a fully automated world where much of the physical labor is completed by machines might not happen for a century or more, it is coming. Machines already handle much of the work in an agricultural environment, but humans are still needed for higher-level thinking. Computers still work mainly from point-to-point and need human intervention when a complex task gets away from them. When most labor positions are gone, expect to see more people employed in design and entertainment fields than ever. These are areas where machines do not function well. Research and development, innovation, and imagination led activities and dozens of other industries will require human assistance.

Quality of life may dramatically improve as production functions automate. Imagine a world where most errands are automated, education is customized and delivered directly to students, governments become solely regulatory bodies with little need to offer services. The result could be a utopian society where humans do little work, simply because there is little work to do. It could also be a nightmare of the very rich and the very poor, with few points of contact between them. 4IR demands a new and deeper collaboration between government, educational institutes and industries. Governments just publishing a white paper on AI is not enough. Universities adding a few new courses in Data Science and Machine Learning won’t cut the ice. Industries can no longer operate in isolation, looking only at productivity and efficiency gains. 4IR is different in many ways and it requires all these economic pillars to work with a common goal to redraw the new human skill spectrum first and then reskill and redeploy workforce across the world.