Shaping the Fourth Industrial Revolution

Shaping the Fourth Industrial Revolution

In a new book titled Shaping the Fourth Industrial Revolution, Klaus Schwab explores a future shaped by scientific and technological advances. The book builds on his earlier work where he describes the emerging Fourth Industrial Revolution. In this latest work, the author describes how rapid advancement in science and technology promise to disrupt the digital systems of our day, creating entirely new sources of value. He touches on a key point that I have articulated in my anchor visual; that the digital technologies that organizations are struggling to make sense of today, turn into the core infrastructure that business models will take for granted tomorrow. Said another way; digital is the foundation for the innovation that is emerging.

The book is a great read for leaders, as they look to navigate this complex future. That navigation depends upon what the author describes as a zoom-in and zoom-out strategy. Zooming in means acquiring an understanding of the characteristics and potential disruptions of specific scientific and technological advancements. But more importantly, it is critical to zoom out and see the patterns that connect technologies and assess their impact. This connecting of dots is aided by books that scan horizons, such as the recent efforts of The World Economic Forum.


A minimum viable appreciation of scientific and technological advancement is required to understand their role in the bigger picture. Learning just enough about these advancements is the first order of business.

Improved living standards and well-being were not evenly distributed as the first three revolutions progressed. As such, the world continues to struggle with a range of challenges: median wages in advanced economies are stagnating or falling; developing economies are struggling to translate economic growth into broad-based, sustainable progress in living standards; and nearly one in 10 people lives in extreme poverty. The question posed is: what type of thinking, and what kind of institutions do we need, to create a world where everyone has the chance to enjoy the highest possible levels of human development?

This point – made early in the book – highlights one of the critical challenges of navigating this complex future: we face the task of understanding and governing 21st-century technologies with a 20th-century mindset and 19th-century institutions.

The authors state that the lion’s share of human development comes from the technologies and systems developed during the second Industrial Revolution – such as electricity, water and sanitation, modern healthcare and the huge expansion in agricultural productivity driven by the invention of artificial fertilizer. This is an argument that Robert Gordon has made persuasively, and something that I covered in an earlier Post.

The historical perspective provided in the book is also very helpful in providing context compared to our current day issues. For instance, before 1750, even the richest countries (Britain, France, Prussia, the Netherlands, the North American colonies) averaged growth of only around 0.2% per year, and even this was highly volatile. Inequality was higher than today, and per capita incomes were at levels we would consider to be extreme poverty today. By 1850, thanks to the impact of technologies, annual growth rates in those same countries had risen to 2-3%, and per capita incomes were rising steadily.

The world is at a crossroads. The social and political systems that have lifted millions out of poverty and shaped our national and global policies for half a century are failing us. The biggest problem is antiquated laws that are ill-suited to deal with contemporary problems. What is needed is a set of interconnected activities that have the goal of shifting the structures of our social and economic systems to succeed in an area where previous industrial revolutions have failed to deliver sustainable benefits to all citizens, including for future generations.

The first and second Industrial Revolutions were built on energy sector transitions, first to steam and then to electricity. Now, at the beginning of the Fourth Industrial Revolution, the energy sector is on the brink of another historic transition as fossil fuels give way to renewable energy sources. Clean energy technologies and improved storage capabilities are moving from laboratories to factories and markets, and with a broad coalition of countries investing in potential history-changing breakthroughs, such as nuclear fusion, a new energy future could be on the horizon. I had a great discussion with David Cohen on the future of energy Here:

The pace of innovation and the pace of regulation have always differed – but the rate of change and the scope of impact of the Fourth Industrial Revolution expose this mismatch in ways that call for entirely new governance models.

And in the fascination department – there’s this as it relates to criminal activity: as capabilities in brain science improve, the temptation for law enforcement agencies and courts to use techniques to determine the likelihood of criminal activity, assess guilt or even possibly retrieve memories directly from people’s brains will increase.

Fascinating times indeed.

7 thoughts on “Shaping the Fourth Industrial Revolution

  1. Frank writes…

    “This point – made early in the book – highlights one of the critical challenges of navigating this complex future: we face the task of understanding and governing 21st-century technologies with a 20th-century mindset and 19th-century institutions.”

    That point should on it’s own illustrate the fundamental problem, information can evolve faster than biological intelligence. If that’s true, if this relationship is built in to the nature of knowledge, if it is a law of nature, then the gap between power and our mindset and human institutions of governance should continue to widen at an ever accelerating rate.

    It seems a fantasy to look to knowledge based technologies such as AI to solve this problem, as such powers will instead further fuel the ever widening gap. AI will surely further accelerate information development, but it won’t fundamentally change the way the human mind works any time soon.

    We might think of the knowledge explosion as a race car. Technology can redesign the engine of the car making it capable of going 500mph. That sounds great, until we realize that the tires on the car are only rated up to 200mph, and there’s nothing we can do to change that any time soon. If this is true, then there’s no point in further developing the engine of the car.

    Any machine is only as strong as the weakest part, and when it comes to the future, we are that limiting factor.

    I would thus edit the author’s statement as follows…

    The critical challenge of navigating this complex future: we face the task of understanding and governing ourselves.

    We are the weak link, the limiting factor. It’s only by understanding and fundamentally changing ourselves that the knowledge explosion can successfully continue. If this is true, then futurists should stop talking about technology and start investigating the nature of thought, that which we are made of.


  2. Here’s a futurist prediction from the comment section peanut gallery.

    After discussing these kind of issues across the Net for about a decade, I’ve come to the conclusion that no amount of thinking or writing by anybody including myself is up to the job of meeting these challenges. The “more is better” relationship with knowledge at the heart of these developments is too deeply rooted in the human experience to be edited with mere reason. I keep writing on these topics only because I’m addicted to typing, no better reason.

    It going to take dramatic developments in the real world to begin a long process of updating the ancient “more is better” relationship with knowledge. I find myself hoping for small catastrophes, large enough to wake us up, but small enough so as not to kill us off.

    One time I was riding a bike and was hit by a car going only 5mph. The impact was just enough to knock me down, but not enough to hurt me. I came away from that experience with a whole new grasp of how massive cars really are in comparison to the human body. I had to _experience_ a collision with a car to transform mere abstract information in to a real understanding. Thus, being hit by a car in this manner turned out to be a blessing.

    The force that most shapes our future for the better is probably not going to be a highly intelligent intellectual exercise, but will more likely come in the form of a tormented psychopathic terrorist building a homemade nuke in his garage. It’s most likely going to take real world explosions for us to truly grasp the nature of the knowledge explosion.


  3. Is it a law of nature that knowledge can develop at an exponential rate by feeding back upon itself, while biological organisms adapt at an incremental rate? Put another way, are the speed limits for knowledge growth and biological adaptation inherently different?

    Our culture in general, and futurists in particular, seem to be assuming that humans can successfully adapt to new environments created by _any rate_ of knowledge development. Starting from that assumption, we then proceed to discuss the most effective adaption strategies.

    Is the underlying assumption true? Doesn’t everything about the field of futurism depend on the answer to that question?

    Is a “more is better” relationship with knowledge sustainable? Or do we at some point collide with the laws of nature?


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