Innovation in any guise has always provoked opposition. This is all the more so when it occurs in pharmaceuticals, in genetically modified foods or in information and communication technology. Innovation is feared by some for its disruptive capacity and its penchant to foster change. Unfortunately, most of us do not even realise the import of taking change for granted which is why human ingenuity is hardly appreciated, particularly in the financial markets.
Investors obsessed with pedestrian concerns, fears of competitors from around the world, the glut in oil which could trigger the collapse of the world economy. Indeed, worries about world economic recession are not far-fetched, yet the fear of world economic recession, excessive debts and under regulation is at the heart of new economic measure in the country.
What is more, the advent of new technologies holds the promise of a fourth industrial revolution. That was the theme of this year’s meeting of the World Economic Forum (WEF) held in Davos, Switzerland between January 20 and 23, 2016. The WEF on Africa comes up in Kigali, Rwanda next week between May11and 13. Nigeria ought to prepare for that conversation.
At present, billions of people are connected by mobile devices, with unprecedented processing power, storage capacity and access to knowledge. And these possibilities will be multiplied by emerging technology breakthrough in fields such as artificial intelligence, robotics, the Internet, autonomous vehicles, printing, nanotechnology, biotechnology, materials science and quantum computing.
Like the revolutions that preceded it, the fourth industrial revolution will raise global income levels and improve the quality of life for populations around the world. To date, those who have gained the most from it have been consumers able to afford and access the digital world.
Technology has made possible new products and services that increase the efficiency and pleasure of our personal lives.
Ordering a cab, booking a flight, buying a product, making a payment, listening to music or playing a game – any of these can now be done remotely. In future, technology innovation will also lead to a supply side miracle, with long term gains in efficiency and productivity.
Transportation and communication costs will drop, logistics and global supply chains will become more effective and the cost of trade will diminish, all of which will open new markets and drive economic growth.
At the same time, as economists pointed out, the fourth Industrial Revolution (FIR) will yield greater inequality, particularly in its ability to disrupt labour markets. As automation replaces labour in world economy, the net replacements of workers by machines might broaden the gap between returns to capital and returns to labour. Also it is possible that the displacement of workers by technology will, in aggregate, result in a net increase in safe and rewarding jobs.
Although much is uncertain, we are convinced that in the future, talent, more than capital, will be the critical factor of production. This will give rise to a job market segregated into low skill/low pay and high skill/high pay which in turn will lead to an increase in social tension. In addition to being a key economic concern, inequality will become the greatest social concern during the FIR. The largest beneficiaries of innovation shall be the providers of intellectual and physical capital, the innovators, the shareholders and the investors.
This explains the rising gap in wealth between the capitalists and the employees.
Therefore, technology is the reason why incomes have stagnated for the majority of the people in developed countries. The demand for highly skilled workers has outstripped the demand for workers with less education and lower skills. This results in a job market with strong demand at both ends but a hollowing of the middle. This is why so many workers are disillusioned and fearful that their incomes will become stagnant. This winner-takes-all economy that offers limited access to the middle class is a recipe for democratic dereliction and discontent.
Of course, all of these impact on business. On the supply side, many industries are seeing new ways of serving existing needs which disrupt existing industry value chains. Disruption also flows from innovative competitors, who can oust incumbents faster than ever by improving the quality, speed or price at which value is delivered. A key trend is the development of technology-enabled platforms that disrupt existing structures as those seen within the sharing or on-demand economy. These new platforms lower the barriers for consuming goods and services in the process altering the personal and professional environments of workers.
On the whole, there are four main effects that the FIR has on business, on customer expectations, on product enhancement, on collaborative innovation and on organisational forms. Physical products and services can now be enhanced since new technologies make assets more durable and resilient. Moreover, the emergence of global platforms and new business models means a rethink of talent culture and organisational forms.
Thus, these new platforms will enable citizens to engage with governments, voice their opinions, coordinate their efforts and even circumvent the supervision of public impact of the Fourth Industrial Revolution on governance. Ultimately, the ability of government systems and public authorities to adapt will determine their survival. If they proved capable of embracing this world of disruptive change, subjecting their structures to the levels of transparency and efficiency that will enable them to maintain their competitive edge, then they will endure. If they cannot evolve they may face extinction.
For its impact on the people, the Fourth Industrial Revolution will finally change not only what we do, but also who we are. This will affect our identity and every issue associated with it. The FIR will also affect the nature of national security and probably the nature of conflict too. The history of warfare and security is the history of technological innovation, and this is no exception today. Modern conflicts are increasingly hybrid in nature, combining traditional battlefield technologies with elements previously associated with non-state actors.
We should grasp the chance and power we have to shape the Fourth Industrial Revolution and direct it towards a future that reflects our common objectives and values. To do this, however, we must develop a comprehensive view of how technology is affecting and shaping our economic, social, cultural and human environment. There has never been a time of greater promise or one of greater danger. Today’ s decision makers are too trapped in traditional, linear thinking or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping our future.
In the end, we need to shape a future that works for all of us by putting people first and empowering them. In its most dehumanised form, the FIR may indeed have the potential to make robots of humanity and thereby deprive us of our heart and soul. But as a complement to human nature, creativity, empathy and stewardship can also lift humanity into a new moral consciousness based on a shared sense of destiny. Thus, it is incumbent on all of us to ensure the latter prevails.