Rapid change and rampant inequality are testing the resilience of economies and societies. It is in our hands to ensure that the potentially disruptive shifts of the Fourth Industrial Revolution not only herald a change of guard in the highest echelons of the global economy, but also rebalance opportunities and outcomes across geographic, generational and gender boundaries.
The growth patterns of the past decades showed both the equalizing and dividing forces of economic and technological change. In 1988, a lower-middle-class US citizen had more than six times the income of a well-off middle-class citizen in China. Today, both earn almost the same amount. Similar leaps happened in other economies, from Turkey to Viet Nam. Yet, in the same period, half of the world’s wealth went to the top 5% of the population, and almost one-fifth went to the highest 1%.
Further tumultuous changes lie ahead as the Fourth Industrial Revolution unfolds, characterised by ubiquitous digitization and technologies that narrow the gap between man and machine.
Yet, whilst it will profoundly shape our future it is far from determining it. Every industrial age found its expression in human values, norms and institutions. In the wake of the First Industrial Revolution, poor working conditions gave birth to socialism and social capitalism; the green movement beginning in the 1970s was a response to the nuclear age and the age of mass production and consumption enabled by the Second Industrial Revolution; in the late 20th century, new global multi-stakeholder governance models gained traction in response to rapid globalization, a result of the Third or “Digital” Revolution which radically lowered communication and transportation costs.
What protocols, partnerships and practices can address the policy dilemmas and unintended consequences of the Fourth Industrial Revolution?
Answering this question will require the courage, thought leadership and entrepreneurial spirit of the leaders gathering at the Annual Meeting of the New Champions. This annual meeting in China brings together scientists, the leaders of up-and-coming companies, social entrepreneurs, political leaders and others to discuss the coming waves of change.
We cannot abandon forces of income, wealth and opportunity concentration, but we can mobilize forces that work against them, from investing into education and entrepreneurship to shaping the governance of emerging technologies. Concretely, an inclusive Fourth Industrial Revolution will require vision and leadership across four domains.
Scaling Up Human-Centred Technology
Technological innovations – from exponential increases in computing power and data to the CRISPR method in gene editing – create not only phenomenal opportunities for human progress, but also serious societal challenges. If we are to seize the opportunities and avoid the pitfalls of the Fourth Industrial Revolution, we must consider the moral and ethical questions it raises with regard to economic and social development, value creation, privacy and ownership, and individual identity. In this context, how do we design human-centred products and services?
Leading Continuous Reinvention
The Fourth Industrial Revolution is shaking up old business models and presenting strategic options that enhance efficiency. On the supply side, developments in energy storage, grid technologies and realtime processing of customer and asset performance are transforming operating models. On the demand side, customers value and expect personalized interaction at all points of their consumer experience. Facing an exponential speed of change in technology, how can leaders recognize adaptive challenges to their organizations and build resilience?
Creating Sustainable Systems
Massively expanding economic activities are placing irresistible pressures on social and planetary systems. At the same time, new technologies are making possible a transformation in almost all spheres of economic and social life. There is a better future to be had in terms of prosperity and quality of life that can also radically reduce pressure on the global commons. How do we seize such opportunities and create more sustainable systems in areas such as energy, mobility, production, health, education, gender and work?
Responding to Geo-Economic Shifts
The erosion of the middle-class is reframing the political economy of slower-growth countries. In faster-growth economies, avoiding the “middle-income trap” is an increasing strategic concern. Common to both is that technological innovation is creating newly advantaged and disadvantaged stakeholders during a period of increasing geopolitical uncertainty. How can communities, companies and countries better prepare for the coming economic changes?
Achieving progress across these four domains is not only a matter of developing new technologies, business and governance models; it also challenges us to reassert fundamental values that serve as a compass and radar at times when old maps no longer serve us well. Achieving Inclusive Growth in the Fourth Industrial Revolution will require the power of imagination to see everything in our present world anew; a deep commitment to diversity as our best – if not only – chance to escape the echo chambers of our biases and beliefs; and a collective capacity for empathy as the glue that holds humanity together.
Equities January 29, 2020