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Job loss and creation, skill obsolesce, upskilling, updating curricula, and opening new programmes have been dominating the discourse of the fourth industrial revolution (4IR). In retrospect, technological progression has a natural tendency of transforming human roles in creating economic value. Hence, none of these issues is new. But what is the nature of such transformation resulting in job creation and job loss deserves attention. To respond to this, is updating the curricula good enough? Is there a role in the industry to adapt to the unfolding transformation? Due to asymmetric implications of technology progression on wealth creation and sharing dynamics, we need to have a deeper understanding of underlying forces so that synchronised response could be chalked out.
DEFINING INDUSTRIAL REVOLUTIONS: Transformational effects on jobs and industry causing the rise and fall of prosperity resembles industrial revolutions. For example, during the first industrial revolution, British-led Europe experienced prosperity. But during the 2nd and 3rd industrial revolutions (IRs), such prosperity migrated to the USA and some parts of Asia. Such reality raises an obvious question-- why could not Europe maintain the top global position during subsequent IRs? How does the industrial revolution keep migrating prosperity across the boundaries of firms, industries and nations?
In retrospect, industrial revolutions are marked by the scaling up of existing products and processes through reinvention and inventing new ones. The reinvention is at the core of causing a transformational effect. In the language of Prof. Schumpeter, it's creative destruction. Hence, the industrial revolution is about reinvention and invention dynamics causing creation, destruction, and migration of jobs and prosperity. Consequently, it poses threat to incumbents' success, as often aspiring new entrants drive the reinvention waves causing destruction and migration.
INDUSTRIAL REVOLUTIONS KEEP CHANGING THE RELEVANCE OF HUMAN ROLES AND COMPETENCE: Often times, we think that there is a natural correlation between the demand for human competence and successive industrial revolutions. We perceive a strong linkage of industrial revolutions to robotics and automation, taking away low-skilled jobs. Therefore, for coping up and leveraging 4IR, we focus on updating curricula, expanding technical education, and giving more training. Unfortunately, in many situations, such perceptions are wrong. As a result, we embark on inappropriate responses.
For example, contrary to the common belief, automation has made the low-skilled workforce of less developed countries eligible for factory jobs. Due to job division and automation of knowledge and high-end skills, many factory jobs demand only innate abilities from the human. Hence, manufacturing jobs, once requiring knowledge and high-end skill of the workforce of developed countries, have migrated to less developed ones. For this reason, Bangladesh got blessed with more than 4 million export-oriented manufacturing jobs. On the other hand, codified knowledge and skill delivered through education and training are highly amenable to software-centric automation. Hence, conventional education and training programs are losing relevance to economic value creation through replication and imitation. For this reason, creating a knowledge economy by delivering services out of gained codified knowledge and skill has already started to lose momentum-creating a hollowing out middle effect and jobs loss in business process outsourcing and IT service sectors.
CHANGING ROLE OF CODIFIED COMPETENCE AND THE INCREASING ROLE OF INNATE ABILITIES: Human beings add value through usages, replication, invention, innovation, and scientific discoveries. During the first and 2nd industrial revolutions, there was a growing role of codified knowledge and skills at all levels. For example, automobile drivers in the 1920s needed far different and more knowledge and skill than the horse wagon operators. Hence, there was a need for upskilling to retain jobs. But drivers need far less knowledge and skill than before to drive modern automobiles. And in the future, all those automobiles will likely drive themselves. Such a reality raises the question of the relevance of upskilling. A similar reality has been unfolding in the usage and replication of all kinds of goods and services. Hence, if an economy is centered around usage and replication, the relevance of codified knowledge and skills through education and training has been falling.
But human beings are blessed with 54 innate abilities. Many of these innate abilities are highly complex and difficult to automate. For example, despite significant advancements in sensors, software, and artificial intelligence, still to date, a dog's nose outperforms the most advanced technology in detecting buried landmines. Hence, sharpening innate abilities will increase both productivity and the comparative advantage of humans over machines. Therefore, education and training for 4IR should consider this reality.
ECONOMIC VALUE CREATION OUT OF IDEAS FOR LEVERAGING 4IR: Unlike other past industrial revolutions, 4IR has been targeting in automating humans' codified and cognitive abilities in the production and usage of goods and services. Yes, sharpening innate abilities will help to slow down job loss on the factory floor. It will also enhance self-learning abilities to cope with rapidly changing skill requirements. But that is not sufficient for preparing for the future to leverage 4IR. It happens to be the knowledge and skill requirement for reinventions and inventions in unfolding the 4th industrial revolution has been exponentially growing, expanding the market for knowledge and ideas. For example, reinventions of automobiles such as electric vehicles and autonomous vehicles have already consumed a staggering amount of R&D resources. Although autonomous vehicles are yet to show up, this reinvention journey has already consumed more than $80 billion in R&D. Hence, the industry should focus on economic value creation out of ideas. Particularly, less developed countries must change the focus of their economy. Otherwise, any amount of investment in education and training will not help them leverage 4IR. Instead, they risk losing their export-oriented manufacturing jobs during the age of 4IR.
SYNCHRONISED RESPONSE OF EDUCATION AND INDUSTRY: As explained, low-skilled labour demand in production increased during the 3rd industrial revolution due to the automation of knowledge and high-end skill. Hence, countries like Bangladesh got blessed with low-skilled manufacturing jobs. Perhaps, their education and skill development played a very little or no role to create these jobs. Hence, the labour-based industry of these countries became beneficiary. Yet, sharpening innate abilities will help to improve the productivity of labour and reduce the rate of invasion of automation, but it will not offer much room for growth. The most important untapped opportunity in less developed countries is the idea economy-likely to be exponentially growing during the 4IR. Hence, the industry of less developed countries should change their focus on economic value creation. They should focus on leveraging the 4IR technology core to generate and integrate ideas in all kinds of products and processes-starting from aquaculture to software. And education should focus on preparing its work force to create economic value by advancing knowledge, and generating, integrating and trading ideas. By the way, due to subsidy-based growth strategy, current startup movement is not a positive force for leveraging idea economy.
It's time to go back to the basics of economic value creation out of human competence and technological advancement. As opposed to believing in higher education and skill for better economic prosperity, we should spell out the asymmetric changing role of humans due to technological progression. Accordingly, we should focus on the synchronisation of human capacity development and economic activities. Otherwise, increasing the investment in education and training, while keeping the economy busy in exploiting labour in replication and imitation out of incentives and infrastructure investment, will likely end up in wasteful investment.
M. Rokonuzzaman, Ph.D is academic and researcher on technology, innovation and policy.