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Over the last 500 years, there have been four major industrial transformations in the global production landscape, creating discontinuities. The first industrial transformation spanning from 1760 to 1840 is epitomised by the steam engine. With the emergence of internal combustion engine, electrical machines and modern management practices, the second one started in the late 19th century and made mass production possible. In the 1950s, the development of computing and communication technologies underpinned the third revolution. The availability of low cost powerful sensors, computing processors, cellular connectivity and artificially intelligent software has started the fourth industrial revolution, at the dawn of the 21st century. The fourth industrial revolution has made the scientific possibility of making machines with human-like sensing, perceiving, reasoning and productive action taking capabilities a technologically feasible as well as economically viable reality. The dynamics of such reality appears to be a highly complex, multidimensional phenomenon. As Klaus Schwab, the founder of the World Economic Forum, puts it, "the single most important challenge facing humanity today is how to understand and shape the new technology revolution." The obvious question: what is the nature of this revolution, and how should we respond to it?
The Fourth Industrial Revolution is the culmination of a long journey: building machines to get jobs done better at lesser costs. Since the beginning of human civilisation, presumably millions of years of ago, human beings have been in a relentless race of building machines, better machines to create more wealth, at greater comfort. In this long race, the end destination is human-free production. Upon reaching this destination, should we just celebrate our success? Or, are there reasons to be concerned about?
Of course, we should celebrate our success. The success of building machines to produce better products at lesser cost, while causing less harm to the environment, is indeed a great accomplishment. Now robots can perform more than 90 per cent of car production jobs faster and with more precision than assembly line workers, also causing less wastage. Food processing by robots has reduced the risk of contamination caused by human touch. Software with artificial intelligence can perform medical diagnosis from an x-ray image faster than a radiologist and also with higher accuracy. The advancement of autonomous cars is opening the opportunity to make transportation system more productive, and also safer. Basically, every industrial product, from smoke detector to water meter, is now the target for improvement, through the addition of human like intelligence. These improved products will be doing their jobs with less or no human involvement at all to get jobs done better-offering higher quality at lesser cost. Similarly, every production process, whether producing software or potato chips, is also the target for improvement to produce better products at less cost. In the entire human history, this is the first time that technology is going to intensify competition to reduce pollution for maximising profit. Despite all of these possibilities, why should we be concerned? Why is Dr. Schwab pointing it as the most important challenge ever faced by the human race?
Recently, the New York Times reported that the Ford plant in Hangzhou and Cadillac plants in Wuhan and Shanghai are utilising robots for jobs that less than a decade ago were handled by humans. Robots are cheaper than $4 to $6 an hour blue-collar jobs. Zhejiang Province, China's vanguard in the robot revolution, alone replaced two million workers with robots between 2013 and 2015. To accelerate the process, China is desperately supporting domestic robotic industry, already comprising 800 firms. In fact, China is on a mission to part with 100 million manufacturing jobs in favour of robots over the next decade. Due to the one-child policy and rapid expansion of manufacturing, there has been labour shortage and steady growth of wages in China.
If robots were not cheaper alternative, these 100 million jobs would have migrated to African and South Asian countries to help them to step up along the development ladder. Although some low-end manufacturing firms are moving to Southeast Asia to cut costs, the on-going progress of robotics will slow down the rate of migration. For China, it's a golden opportunity. Not only it gives the opportunity to retain those production activities, but also it offers the opportunity of developing high-tech robotic industry. To take the advantage of this opportunity, the Chinese government is pushing hard for a domestic industry that can manufacture quality robots at cheaper prices. Although, Chinese technology lags far behind foreign robot suppliers, it is expected that domestic robotics industry will be reaching some kind of parity in ten years.
China has responded to the Fourth Industrial Revolution to turn it into blessing to protect existing production and move up in the industrial value chain. On the other hand, such development is slowing down the migration of labour-intensive manufacturing jobs to less developed countries, creating obstacles to economic up-gradation path. If robots are cheaper than $4-$6 per hour wage, how will the large number of people find opportunity to contribute to manufacturing?
We need technology to delegate the role of humans to machines to get jobs done better consuming less resources and creating new wealth. But this wealth should be distributed among all. Job is an equitable way to make such distribution. The fear of major job loss caused by the Fourth Industrial Revolution is weakening this tool of equitable wealth sharing. According to a recent study, introduction of 1 robot among 1000 workers in the USA leads to six-job loss and 0.5 per cent salary reduction of existing workers. With decreasing cost and increasing capability of robots, human workers are in the process of suffering from income erosion, leading to job loss. We need the opportunity of participation of everybody to create wealth addressing inclusiveness. The reward of participation should be proportionate to the contribution for equitable distribution of wealth. The Fourth Industrial Revolution is threatening to cause distortion to both inclusiveness and equitability.
Under the circumstances, the theory of wealth creation needs to be revisited within the context of technology-led transformation. To prepare all actors such as individuals, families, firms, governments and development organisations, major research and awareness campaigns are needed across the globe to counter the threat and exploit new possibilities offered by the Fourth Industrial Revolution.
M Rokonuzzaman Ph.D is academic, researcher and activist on Technology, Innovation and Policy.