Making the 4th industrial revolution work for us

By: Sir Christopher Pissarides.

Nobel Laureate and Regius Professor of Economics.

The last 200 years have experienced more changes in the way that we live our lives than millennia before them. The factor that has enabled us to achieve so much is technology.

Technology has freed us from the pursuit of basic needs like feeding ourselves and avoiding early death, by teaching us how to produce more in a shorter period of time and how to deal with disease, plagues and pandemics. Historians sometimes refer to the stages that led to today’s post-industrial state in terms of “revolutions”. Each revolution was built on a big new discovery, usually related to energy. The first one took place in Great Britain in the 18th and 19th centuries, powered by steam. The second brought in the United States and Continental Europe and was powered by the internal combustion engine and electricity. The third was built on computers in the second half of the 20th century and finally the dawn of the fourth industrial revolution came late in the 20th and early in the 21st century, and was powered by digital technologies and artificial intelligence.

Such technological revolutions disrupt the established order. The first destroyed the cottage industry and diminished the importance of craftsmen, as steam required factories. The second increased transportation speeds and opened up the world to trade, and America to the West. These earlier revolutions were not always welcomed, because disruption causes changes in relative prosperities and social standing. The ones who lose ground often rebel. But soon enough objections gave way to embrace, as living standards improved, and the pursuit of leisure entered stage. The fourth industrial revolution is no exception; it is disrupting work from top to bottom, with as yet uncertain outcomes. Is this time really different?

I believe yes, in several ways. But I also believe that unlike earlier revolutions, we can do something about it. Whatever we do, I don’t think this time it will be as disruptive for local populations as something like the railways in 19th century America or electricity in the whole world. The fear that the fourth industrial revolution injects in people is uncertainly – about its capabilities, what it can do to their jobs and will they ever understand how it influences their lives? We have already lost our privacy to digital technologies, we access information that is not easy to process and use to our benefit, and decisions are often made on our behalf that we do not understand, because we cannot process the data in the way that AI machines can.
Some authors are signalling the end of work; and with it the end of human control over progress. I do not doubt that such doomsday scenarios are possible but better ones are also possible, and it is up to us which ones we take up. More than ever before, we have a choice. Use technology for the human good or use it to control our lives and fight wars in ways that we do not understand. By careful selection of which route to take and which technologies to support we can make the technology of the fourth industrial revolution work for us. To give us a better quality of life, better health standards and more happiness across the globe.

The increasing complexity of new technology, the speed of communication and the vast amount of information that is publicly available make it essential that we collaborate across the globe. Most countries in the world are too small to go it alone. This is very much the case with Europe, where we have both the human capital and the knowledge to prosper but we are segmented into too many small countries to be able to make it on our own. This is why it is important to work together, support countries that are still struggling to catch up with the technological leaders and improve productivity and well-being across the continent. There are still many gaps that need to be filled – despite the EU’s thirty-year old single market.

Support needs to start at the company level. Hundreds of thousands of European businesses stand to be deeply affected by the fourth industrial revolution over the next decade. They can embrace this change as leaders and innovators, or they can be mere spectators. At Oak Universe, we prefer the former; we are ready to unleash innovation on the ground with expertise, capital, and a passion to put European SMEs at the forefront of the revolution. Oak Universe is ready to help.