The Fourth In­dus­trial Rev­o­lu­tion

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Rotman Management Magazine - - NEWS - By Klaus Sch­wab

Tech­no­log­i­cal in­no­va­tions are fu­elling mo­men­tous change through­out the world, gen­er­at­ing great ben­e­fits and chal­lenges, in equal mea­sure.

Tech­no­log­i­cal in­no­va­tions are fu­elling mo­men­tous change through­out the world, gen­er­at­ing great ben­e­fits and chal­lenges, in equal mea­sure.

revo­lu­tions have oc­curred when new techTHROUGHOUT HIS­TORY, nolo­gies and novel ways of per­ceiv­ing the world trig­ger a pro­found change in eco­nomic sys­tems and so­cial struc­tures. The first pro­found shift — the tran­si­tion from for­ag­ing to farm­ing — hap­pened 10,000 years ago, and was made pos­si­ble by the do­mes­ti­ca­tion of an­i­mals. The agrar­ian rev­o­lu­tion com­bined the ef­forts of an­i­mals with those of hu­mans for the pur­pose of pro­duc­tion, trans­porta­tion and com­mu­ni­ca­tion. Lit­tle by lit­tle, food pro­duc­tion im­proved, spurring pop­u­la­tion growth and en­abling larger hu­man set­tle­ments and the rise of cities.

The agrar­ian rev­o­lu­tion was fol­lowed by a se­ries of in­dus­trial revo­lu­tions that be­gan in the sec­ond half of the 18th cen­tury, with the first span­ning from about 1760 to 1840. Trig­gered by the con­struc­tion of rail­roads and the in­ven­tion of the steam en­gine, it ush­ered in me­chan­i­cal pro­duc­tion. The sec­ond, which started in the late 19th cen­tury and into the early 20th cen­tury, made mass pro­duc­tion pos­si­ble, fos­tered by the ad­vent of elec­tric­ity and the as­sem­bly line. The third in­dus­trial rev­o­lu­tion be­gan in the 1960s. It is usu­ally called the com­puter or dig­i­tal rev­o­lu­tion be­cause it was cat­alyzed by the de­vel­op­ment of semi­con­duc­tors, main­frame com­put­ing (1960s), per­sonal com­put­ing (1970s and 80s) and the In­ter­net (1990s).

To­day, we are in the midst of a fourth in­dus­trial rev­o­lu­tion that be­gan at the turn of this cen­tury and builds on the dig­i­tal rev­o­lu­tion. In this ar­ti­cle I will de­scribe the chal­lenges and op­por­tu­ni­ties it presents for mod­ern busi­ness lead­ers.

A Dif­fer­ent Kind of Rev­o­lu­tion

The fourth in­dus­trial rev­o­lu­tion is not just about smart and con­nected ma­chines and sys­tems: its scope is much wider. Oc­cur­ring si­mul­ta­ne­ously are waves of fur­ther break­throughs in ar­eas rang­ing from gene se­quenc­ing to nan­otech­nol­ogy, from re­new­ables to quan­tum com­put­ing. It is the fu­sion of th­ese tech­nolo­gies — and their in­ter­ac­tion across the phys­i­cal, dig­i­tal and bi­o­log­i­cal do­mains — that make this rev­o­lu­tion fun­da­men­tally dif­fer­ent from its pre­de­ces­sors.

Emerg­ing tech­nolo­gies and broad-based in­no­va­tion are dif­fus­ing much faster and more widely than in pre­vi­ous revo­lu­tions — which con­tinue to un­fold in some parts of the world. The sec­ond in­dus­trial rev­o­lu­tion, for in­stance, has yet to be fully ex­pe­ri­enced by 17 per cent of the world, as nearly 1.3 bil­lion peo­ple still lack ac­cess to elec­tric­ity. This is also true for the third in­dus­trial

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