HESA

Higher Education Strategy Associates

There is no Fourth Industrial Revolution

I am seeing an increasing number of otherwise thoughtful people in Canadian university and research circles going around talking about the “Fourth Industrial Revolution”.  They need to stop.

There is no such thing as the Fourth Industrial Revolution.  It is a catch-phrase made us by Klaus Schwab, head of the World Economic Forum (the Davos folks), which he developed in an eponymous book released in late 2015.  I read it.  It’s dreadful.  Seriously, seriously awful.  No redeeming characteristics whatsoever.

The argument lies in the same kind of shallow “Digital! Clean Tech!  Woo!” analysis that seems to animate Navdeep Bains, our Minister for pro-IT Industrial Policy.  Essentially what it comes down to is that after a long China-driven commodities super-cycle, everyone is interested in more knowledge-intensive industries.  And a bunch of these seem to be (emphasis on seem) to be on the tipping point of some interesting transformations that might have deep economic ramifications: autonomous vehicles, AI, nanotech, quantum computing, materials science, energy storage, etc.  But all of this does not a revolution make.

Generally, economic historians posit that there was one starting in Northern England built around textiles in the eighteenth century, one around mechanical mass production starting in and around Detroit in the early 20th century, and – maybe, this is still disputed – one based around computers and information technology starting in the 1960s/70s/80s (depending on who is telling the story).    The question is really whether all these new technologies that Schwab is so excited about are really new or just extensions of the It revolution of the late twentieth century.  Schwab claims it is because of three factors: “velocity” (change is happening more quickly), “breadth and depth” (some handwaving about “unprecedented paradigm shifts”) and “systems impact” (something about transformation across industries that also looks like a lot of handwaving).  But as several articles noted at the time (see here, here and here), this is fundamentally unconvincing.  All of these new showy technologies are children of the information revolution, and there’s no sign of any radical break in the economy or the pace of technological change that would make us think that there’s been some “revolutionary” break.  Is change occurring?  Of course.  But change has been occurring for decades, even centuries, sometimes at a much faster pace than today.

Now, sure, some might point to the huge amounts of money now being poured into alleged growth industries, like “Clean Tech” (or the “Green Economy” as its sometimes called).  Our Minster for Shaking Hands with Tech Executives, for instance, likes to talk about Clean Tech being a “$3 trillion industry”.  But a lot of that has to do with creative re-labelling of existing economic activities.  So, for instance, one major study which hyped the value of this economy includes in its definition of green tech large swathes of the construction industry (energy efficiency!), the automobile industry (lower emissions!), sewage collection (it’s about waste!)….you get the picture.  Important?  Yes.  But improvements in these areas are mostly about slow transformation of the economy, not some kind of big break with the past. Not, in other words, revolutionary.

And of course, a lot of the hype about these new technologies is just that: hype.  Everyone is talking about driverless automobiles, but there’s no certainty that the legal issues surrounding them will allow them on the road in major numbers for at least a decade (who is at fault if a driverless car gets into an accident?  Who will insure cars if there is ambiguity about this?)  AI sounds like a huge market, but a lot of it has to do with re-classifying what used to be called “software” as AI.  Nanotechnology has been the tech of the future for at least 15 years; biotech for 30.  Etc, etc.  There’s lots of groovy science out there, but turning it into industrial or consumer products at scale is tricky and doesn’t come quickly.  And because modern capitalism isn’t patient, that means a lot of money for product development is going into things which fundamentally don’t raise productivity.  As Peter Thiel once said, “we dreamed of flying cars, we got 140 characters”.

And even if some of these do manage to make it to market, there are some real questions about how much they will change living standards.  If you’re in any way inclined to call yourself a techno-optimist, I really urge you to read Robert Gordon’s The Rise and fall of American Growth, which painstakingly reconstructs the last 150 years of American economic history (it works equally well for Canada, though), and suggests both that a) the high growth rates of the mid-twentieth century were a one-off, never to return and b) that most of the major changes to the workplace due to the It revolution have already happened.

So in any case, if you’re tempted to try to join the Davos buzzword crowd and throw the term “Fourth Industrial Revolution” into a conversation, just don’t.  In a few years, when that term has been properly consigned to the dustbin of history, you’ll thank me

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9 Responses to There is no Fourth Industrial Revolution

  1. Vinitha says:

    The theme of next years Asia Pacific Association of International Education conference is The impact of the Fourth Industrial Revolution on Higher Ed in the Asia-Pacific. The lead hosts NUS, NTU, SMU and SUTD – perhaps you could consider a presentation on this topic.

  2. Tom Carey says:

    Alex, if you are arguing that the label is incorrect then it might be helpful to suggest an alternative. We do appear to be in the midst of a dramatic change in the nature of “mid-level skilled jobs”, which other countries are taking very seriously. It would be difficult for a small nation like Canada to stay in the loop on all that is happening and of course it is doubly difficult for us to coordinate our efforts because of the way higher ed is distributed across provincial jurisdictions.

    So we do need to work hard at this to ensure we get our share of those jobs. That will have to involve partnerships internationally, to which we must bring our own special value in order to be part of ongoing discussions and emerging developments. There are Canadian institutions working on this, but to date there is little in the Innovation Agenda to acknowledge the need for more strategic thinking about Canada’s role in larger international collaborations to address the changes in the nature of mid-level skilled jobs (whatever name we may give to the phenomenon)

    • Alex Usher says:

      See, I’m not convinced we are in the midst of a dramatic change in mid-level skilled jobs. We are seeing gradual polarization, but it;s been going on across the developed world for at least three decades now. It’s not new, and there’s been no recent acceleration in job loss in this area. In Canada, we sometimes miss the effects of these changes because our resource economy attenuates the losses somewhat. Do we need better policies to address this? Sure. But pretending the cause is some non-existent “new wave” of technological change isn;t going to help with that.

      • Tom Carey says:

        Alex: the recent acceleration has come in the way other countries are moving forward in connecting the dots between

        (I) technology advances in call-it-anything-you-want-except-Industry4.0 (e.g., https://www.manufacturing.gov/nnmi-institutes/ in the U.S.);

        (ii) the shift in capabilities this requires of the workforce (e.g., Qualifications and Skills in the Factory of the Future: A German and American Perspective. VDI/ASME Industry 4.0 White Paper, 1-28., a joint Germany-U.S. project); Polarisation of activities in Economy 4.0 – skilled worker qualifications and skilled worker requirements in the digitalised work of tomorrow https://www.bibb.de/en/pressemitteilung_55127.php); and

        (iii) the required changes in higher education to develop the knowledge, skills and mindsets of graduates in the vocations most affected by these changes (e.g., http://epub.oeaw.ac.at/ita/ita-manuscript/ita_15_04.pdf, http://epub.oeaw.ac.at/ita/ita-manuscript/ita_15_04.pdf in Germany and Austria)

        It would be troubling if we in Canada were behind the curve on just one of these aspects; but to still not be out of the starting gate on any of them demands that we raise the alarm! Even Denmark has an Educational Lab for experiments in Vocational Education! http://www.eera-ecer.de/ecer-programmes/conference/8/contribution/21455/

        (You, of course, would love the depth of data that organizations like the Federal Institute for Vocational Education and Training in Germany provide :).

        While the pace of these changes may not merit the “Revolution” label, you must admit that there is a huge gap between the pace at which the world of work in these areas is changing (i) and the pace at which we in Canadian higher ed are moving to address items (ii) and (iii) above.

        We are doing some work on these areas in the BC Association of Institutes and Universities – would you like us to do a guest post in One Thought to Start Your Day, or should we just post on the BCAIU.ca website and to refer to y our OTSYD post as the view to which we are responding?

  3. Osman says:

    It is true that there is no “Industry 4.0.” It is a term invented by Germany. (Schwab just followed the suit and tried to put the term into a broader perspective than just automation.) Merkel’s technology and industry strategy – exporting automation – is based on promoting this slogan.

    However, – despite strong objections of Northwestern professor Robert Gordon – it is also true that, there is a dramatic, in fact disruptive changes in manufacturing, services, busines models… A more correct term to use is given by two MIT scholars Erik Brynjolfsson and Andrew McAfee: The Second Machine Age – the title of their excellent book.

    Second and third “revolutions”(?) were not nearly as disruptive as the first and the current one.

    • Alex Usher says:

      Thanks for writing.

      I think my reply to this is the same as it was to Tom. If you look at the record to date, there’s nothing going on right now that hasn’t been going on for 30 years. That’s not to say the cumulative effects of the last thirty years aren’t significant and long past due dealing with. But there’s no radical rupture. And while I enjoyed the Brynjolfssson & McAfee book, I’d say it;s still mostly science fiction. There’s lots of interesting things going on in labs, and remarkably little of it heading into any kind of scalable commercializable programs. (and even if there were, I;d still say that the stuff B&M are talking about is still all IT i.e. thirdwave).

  4. KP says:

    Whether there is a fourth or 3A revolution, what has happened (and happening) is a lot of young people trained in many different fields are either not having good and reliable jobs except for software related jobs! Is this because of the so called automation, globalization (out sourcing), or just bad planning and closing down of jobs that would have been supported by governments (for example, many social support and environment related jobs of the past were the so called government jobs which don’t exist anymore) or all of this?

    The only reason I would consider this a new Industrial revolution is that there seems to be less need for more human employment unlike in previous industrial revolutions that all lead to more employment of humans per product consumed!

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