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The Fourth Industrial Revolution

What is the fourth industrial revolution.

The Fourth Industrial Revolution (4IR), also known as Industry 4.0, is a new era of development in which digital, physical and biological systems converge, fundamentally transforming industries, economies and societies.  

The term Fourth Industrial Revolution was coined by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF). He introduced this concept in his book, The Fourth Industrial Revolution, published in 2016. In it, he discusses how emerging technologies like artificial intelligence (AI), the Internet of Things (IoT) and robotics have begun to merge with the physical, digital and biological worlds and, thus, have revolutionized economies, industries and societies in the process.   

 In this video, discover how the 4IR is transforming the world: 

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The 4IR’s alternate name, Industry 4.0, is usually referred to in the context of the manufacturing and industrial sectors. This term highlights the revolution's focus on the integration of digital technologies into the heart of industry to create smart factories that embody the convergence of the physical and digital worlds. 

This revolution is distinguished by its unprecedented speed, scope and impact on human life—it offers immense opportunities for progress but also poses significant challenges, including ethical considerations and the potential for increased inequality. Klaus Schwab argues that this era is more than just a technological upgrade—it’s an opportunity to help everyone, including leaders, policymakers and people from all income groups and nations, to harness converging technologies in order to create an inclusive, human-centered future. The 4IR compels us to rethink how we create, exchange and distribute value, with particular emphasis on the need for global cooperation and inclusive policies to harness its potential for the betterment of humanity. 

The 4IR expands upon the breakthroughs of the Third Industrial Revolution, also known as the digital revolution, that occurred from the 1950s through the early 2000s. During this time, innovations like computers, diverse electronic devices, the Internet and numerous other technological advances emerged. 

Fourth Industrial Revolution: Integration of Design and Technology 

The 4IR is marked by the integration of technologies like AI, IoT, robotics and VR, which demands a holistic design approach that considers not only the form and function but also the interconnectedness and intelligence of products and systems. 

The Apple Vision Pro epitomizes the convergence of design, technology, AI and VR—it’s a significant release of the Fourth Industrial Revolution. This device combines Apple's renowned design ethos with cutting-edge virtual reality capabilities to offer users immersive experiences that blur the line between the digital and physical worlds. The Vision Pro is powered by sophisticated AI to deliver personalized, intuitive interactions—it’s expected to set a new standard for how technology interfaces with human behavior.  

Watch Apple’s first announcement video for the Vision Pro: 

 As technology becomes more embedded in everyday life, design in the 4IR emphasizes user-centric solutions and personalized experiences, enabled by data analytics and machine learning. There's also a growing focus on sustainable and circular design principles driven by global challenges like climate change and resource scarcity. 

The complexity of 4IR technologies requires designers to work collaboratively across disciplines, integrating insights from engineering, biology, computer science and psychology. This interdisciplinary approach is crucial for innovation and for addressing the ethical, social and environmental implications of new technologies. 

The 4IR encourages designers to engage in speculative and critical design practices, exploring future scenarios and the societal impact of emerging technologies. This approach helps to envision potential futures and guide the development of technology in a responsible and human-centered direction. 

What Are the Key Technologies of the 4IR 

An illustration that shows the key technologies of the Fourth Industrial Revolution

© Interaction Design Foundation, CC BY-SA 4.0

Artificial Intelligence (AI) and Machine Learning 

AI involves machines and programs capable of performing tasks that typically require human intelligence. Machine learning, a subset of AI, enables computers to learn from data and improve over time. These technologies are revolutionizing sectors by enhancing decision-making, automating tasks and creating new services and products. 

In this video, AI Product Designer Ioana Teleanu discusses AI’s impact on the world:  

 Learn more about machine learning in this video: 

Internet of Things (IoT) 

IoT refers to the network of physical objects embedded with sensors, software and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet. This interconnectivity enables more efficient processes and improved data analytics, which impacts everything from home automation to industrial manufacturing.  

Smart lighting product, Philips Hue, uses IoT technology to offer a wide range of smart bulbs, lamps, and light fixtures that can be controlled via the Philips Hue app or through integration with other smart home systems. These lights can change color, brightness, and even sync with media content for an immersive experience. See how Philips uses IoT in their product expansion, Philips Hue Secure, in this video:   

Robotics technology involves the design, construction, operation and use of robots for various tasks. With advancements in AI and machine learning, robots are becoming increasingly sophisticated, capable of performing complex tasks autonomously or augmenting human capabilities in industries like manufacturing, healthcare and services. 

 In this video, Robotic company Boston Dynamics demonstrates how their robot Atlas can aid in construction:

Blockchain 

Blockchain is a decentralized ledger of all transactions across a network, which enables secure, transparent and tamper-proof record-keeping. While it underpins cryptocurrencies like Bitcoin, its applications extend to secure transactions, smart contracts and supply chain management. 

Organizations like IBM's Food Trust network uses blockchain to trace the production, processing, and distribution of food products to enhance safety and reduce waste.   

Quantum Computing 

Quantum computing represents a significant leap forward in computing power—it uses principles of quantum mechanics to process information at speeds unattainable by traditional computers. This technology has the potential to revolutionize fields such as cryptography, drug discovery and complex system simulation. 

Google's quantum AI lab is researching how quantum computing could accelerate machine learning tasks by processing complex data more efficiently than classical computers. Learn more in this video:    

3D Printing and Additive Manufacturing 

3D printing builds objects layer by layer from digital models. This offers unprecedented flexibility in manufacturing. It enables rapid prototyping, custom manufacturing and complex designs not possible with traditional methods which impacts industries from healthcare (with prosthetics and organ printing) to aerospace and automotive. 

 In this video by Mayo Clinic, 3D printing is used to create more hygienic and effective casts and splints for a patient with fractures and other injuries:  

Biotechnology and Genetic Engineering 

Advances in biotechnology and genetic engineering have enabled us to manipulate living organisms or their components to develop or make products, which improves healthcare, agriculture and environmental sustainability. Techniques like CRISPR-Cas9 gene editing have opened new possibilities for disease treatment and precision medicine. 

Learn more about gene editing in this video by TED-Ed:

Nanotechnology  

Nanotechnology manipulates matter at the atomic and molecular scale and promises significant advancements in materials science, medicine and electronics. Its applications range from more effective drug delivery systems to water treatment processes that remove contaminants at a molecular level. 

 In this video by Johns Hopkins Institute for NanoBioTechnology, learn how nanotechnology can be used to fight cancer:  

 Augmented Reality (AR) and Virtual Reality (VR) 

AR and VR technologies are changing the way we interact with digital environments. AR overlays digital information onto the physical world, while VR creates immersive digital environments. These technologies have applications in education, training, entertainment and beyond. 

 Learn more about VR, its history and its future in this video: 

Cyber-Physical Systems (CPS) 

CPS are integrations of computation, networking and physical processes. Embedded computers and networks monitor and control the physical processes, with feedback loops where physical processes affect computations and vice versa. This integration is foundational for smart grids, autonomous vehicle systems and smart factories. 

 In this video watch how a Tesla vehicle drives itself:   

These technologies are not only transformative in their own right, but are also interrelated. They often converge to create innovative solutions and opportunities across a variety of sectors and different levels of society and the economy. The potential of the 4IR lies in how these technologies are harnessed to drive forward human progress, address global challenges and reshape the world for the better. 

The Impact of the 4IR: Case Studies 

Environmental protection: iot for monitoring and conservation .

Rainforest Connection transforms recycled smartphones into solar-powered acoustic devices that monitor rainforest sounds. AI algorithms analyze these sounds to detect illegal logging and poaching in real time, enabling rapid response to protect wildlife and forests. This case study highlights how 4IR technologies can be creatively applied to combat environmental destruction and biodiversity loss. 

 Learn more about Rainforest Connection’s work in this video:  

Agro 4.0: More Efficient Farming 

The World Economic Forum’s (WEF) Centre for the Fourth Industrial Revolution (C4IR) introduced technology to small and medium farms in Colombia. The technology includes soil, water and climate sensors, as well as AI, cloud computing and drones. The project managed to reduce the farmer's costs by 30% and increase their yields by 20%.  

 Watch the C4IR video to learn more   

Healthcare: AI-Driven Diagnostics and Personalized Medicine 

Google's DeepMind developed an artificial intelligence system that can accurately detect over 50 types of eye diseases from 3D scans. Scientists from Google's DeepMind division, University College London (UCL) and Moorfields Eye Hospital developed software through deep learning techniques that can detect numerous prevalent eye conditions from 3D scans and subsequently recommend treatment options for the patient. This technology enables early diagnosis and treatment to potentially prevent vision loss in millions of people worldwide. Not only does it improve diagnostic accuracy and patient outcomes, but it can also reduce healthcare costs.  

© UCL, Moorfields, DeepMind, et al, Fair Use

What are the Impacts of the 4IR? 

The 4IR is not just a technological revolution; it's a catalyst for comprehensive change—how we live, work and relate to one another. Here are some of the major impacts and implications of the 4IR: 

Economic Transformation 

Productivity and efficiency : The integration of technologies like AI, robotics and IoT significantly boosts productivity and operational efficiencies across industries. In most cases, this leads to reduced costs, improved production rates and enhanced product quality. 

New business models and markets : The 4IR has enabled new, innovative business models (e.g., platform-based economies like Airbnb and sharing economies like Uber) and the creation of markets that didn't exist before, particularly in the digital and service sectors. 

Job displacement and creation : While automation and AI have displaced many traditional jobs, particularly in manufacturing and routine white-collar tasks, they also create new jobs that require advanced digital skills and competencies in technology development, data analysis and cybersecurity. 

Societal Changes 

Education and skill development : There's a growing need for education systems to adapt and an emphasis on STEM education, critical thinking, creativity and lifelong learning to prepare individuals for the jobs of the future. 

Inequality and digital divide : The benefits of the 4IR risk being unevenly distributed, which could exacerbate income inequality and widen the digital divide between those with access to new technologies and skills and those without. 

Enhanced connectivity and communication : The global proliferation of the internet and mobile devices has led to unprecedented levels of connectivity to enable new forms of social interaction, collaboration and information exchange. 

Technological Advancements 

Accelerated innovation : The rapid pace of technological advancement in fields like biotechnology, nanotechnology and quantum computing has already begun to revolutionize healthcare, energy and other industries.  

Cybersecurity challenges : As more devices and systems are connected, vulnerabilities to cyber-attacks increase. Data privacy and system security are increasingly critical challenges. 

Environmental Considerations 

Sustainable development : Technologies emerging from the 4IR offer promising solutions to environmental challenges, including more efficient resource use, renewable energy technologies and smarter, more sustainable cities. 

Climate change mitigation : Advances in technology are crucial for monitoring environmental changes, improving energy efficiency and developing new methods for carbon capture and storage to combat climate change. 

Ethical and Governance Issues 

Ethical considerations : The development and application of technologies like AI and genetic engineering raise profound ethical questions about privacy, consent and the nature of human identity. 

Regulation and governance : There is an increasing need for effective governance frameworks to ensure that the development and deployment of new technologies are aligned with societal values and ethical principles. Policymakers are challenged to keep pace with technological innovation while safeguarding public interests. 

The History of the World’s Industrial Revolutions 

The 4IR is built upon the foundation laid by the three previous industrial revolutions, each marked by a significant leap in technological capabilities that transformed societies and economies. It's important to understand these precursors as they provide essential context to grasp the scale and scope of the changes the 4IR represents. 

An illustration showing all the industrial revolutions and their key technologies

First Industrial Revolution: Late 18th to Early 19th Century 

The first Industrial Revolution’s start and end date are widely debated, but the general consensus is that it spanned from about 1760 to 1840. It was characterized by the transition from hand production methods to machines through the use of steam power and water power. The textile industry was among the first to be transformed, with the invention of the spinning jenny and the power loom. This era saw the rise of mechanized factories, which significantly increased production capabilities and led to urbanization as people moved to cities for work. 

An old photography during the period of the 4th industrial revolution that shows a factory.

A factory from the First Industrial Revolution. The machinery harnessed steam and water power.

© National Geographic, CC BY-SA 4.0

Second Industrial Revolution: Late 19th to Early 20th Century 

This period is roughly dated between 1870 and the beginning of World War I in 1914. The Second Industrial Revolution was marked by the introduction of electricity—this transformation led to more advanced manufacturing and production technologies. The development of the assembly line, notably used by Henry Ford in the mass production of automobiles, drastically increased efficiency and made goods more accessible to the masses. This period also saw significant advancements in chemical, electrical and steel production. 

An old photograph showing a Ford Model T assembly line.

The Ford Model T assembly line circa 1913-1914. Henry Ford was one of the first to use an assembly line for mass production. When a Model T left the assembly line at Ford's Highland Park plant to be shipped by rail, it was not fully assembled. In this photograph, workers temporarily place bodies onto a chassis. At the loading dock, bodies and wheels would be removed and packed separately to conserve freight car space. Full assembly took place at branch plants closer to the vehicles' final destination.

© The Henry Ford, CC BY-SA 4.0

Third Industrial Revolution: Mid-Late 20th Century  

Also known as the Digital Revolution, this era started around the 1950s-1970s. It’s defined by the move from analog electronic and mechanical devices to digital technologies. The invention of the personal computer, the internet and information and communications technology (ICT) transformed the way people live, work and communicate. It laid the groundwork for the globalized, interconnected world of today. The Third Industrial Revolution transitioned into the Fourth Industrial Revolution around the early 21st century, so there is no definitive end date for this period.  

A photograph of Steve Jobs with the Apple II circa 1977.

Steve Jobs with the Apple II. It was released in 1977 and is an example of an early personal computer.

© Alamy, CC BY-SA 4.0

Fourth Industrial Revolution: 21st Century 

The 4IR builds on the digital revolution and is marked by a fusion of technologies that blur the lines between the physical, digital and biological. It’s characterized by breakthroughs in a range of areas including AI, robotics, the Internet of Things, genetic engineering, quantum computing and others. Unlike previous revolutions, the 4IR evolves at an exponential rate, transforming almost every industry and many aspects of human life. 

Each industrial revolution brought about drastic changes in economic structures, social systems and the global order. While the first three revolutions introduced and then expanded upon mechanization, electrification and digitization, respectively, the 4IR stands out for its potential to integrate cyber-physical systems and impact all disciplines, economies and industries on a global scale.  

How the Industrial Revolutions Have Impacted Design 

The industrial revolutions have profoundly influenced design. The technological, social and economic shifts of each era have shaped how, what and why humans design. Here's how each industrial revolution has impacted design: 

First Industrial Revolution 

Mass Production : The advent of steam-powered machinery enabled the mass production of goods, leading to product standardization. Design during this period focused on functionality and manufacturability, often at the expense of aesthetics and individuality. 

essay on the fourth industrial revolution

This British printed cotton textile is an example of the 1820 is an example of Regency design.

Second Industrial Revolution 

Industrial design : The introduction of assembly line manufacturing and advancements in materials and processes, such as steel production and electrical engineering, birthed the discipline of industrial design. Designers began to focus on the user experience, ergonomics and aesthetic appeal of products and thus recognized the value of design in marketing and brand differentiation. 

essay on the fourth industrial revolution

A Singer sewing machine circa 1880.

© Singer, Fair Use

The Singer sewing machine is a pivotal and recognizable invention from the 19th Century. Isaac Merritt Singer, an American inventor, patented the first practical sewing machine in 1851. Their machines were a combination of practical functionality with elaborate Victorian aesthetics. Its design not only made sewing more efficient and less labor-intensive but also turned the sewing machine into a desirable household item. In 1889, they released the first electric sewing machine. The Singer Company's innovations in mass production and global marketing strategies are classic examples of Second Industrial Revolution practices.  

essay on the fourth industrial revolution

An advertisement for the Singer 99k-13, the first electric sewing machine released in 1889.

Third Industrial Revolution 

Digital design : The Digital Revolution introduced computers and digital technology which revolutionized the way designers work. Computer-Aided Design (CAD) and other digital tools enabled more complex and precise designs to foster innovation in product development, architecture and graphic design. The rise of the internet also opened new avenues for digital and web design and emphasized user interface (UI) and user experience (UX) design. 

essay on the fourth industrial revolution

Milton Glaser's "I Love NY" logo was designed in 1977 for a New York State advertising campaign—it’s one of the most iconic works in graphic design. With its simple yet impactful composition, the American Typewriter font paired with a heart symbol replacing the word "love", Glaser's design captured the essence of New York City's resilience and appeal during a time of economic hardship and social unrest. This logo revitalized New York's image and showcased the power of graphic design in shaping public perception and fostering a sense of community and pride. Although the Digital Revolution was in its nascent stage, the impact of evolving technologies on design practices was becoming increasingly apparent.

© Milton Glaser, Fair Use

Learn More About the Fourth Industrial Revolution 

Read Klaus Schwab’s book The Fourth Industrial Revolution . 

Visit the World Economic Forum’s Centre for the Fourth Industrial Revolution .  

Read McKinsey and Company’s piece, What are Industry 4.0, the Fourth Industrial Revolution, and 4IR?  

Read about the World Economic Forum’s various 4IR projects . 

Check out National Geographic’s collection on the Industrial Revolution .  ​​​​

Questions about The Fourth Industrial Revolution

Emerging technologies such as AI and IoT are fundamentally transforming the design industry through the introduction of new capabilities for automation, personalization and connectivity. AI is being leveraged to automate routine design tasks, generate innovative design options and provide data-driven insights that can enhance efficiency and creativity. For example, Autodesk's Dreamcatcher is an AI-based generative design system that enables designers to input design goals along with parameters such as materials, manufacturing methods and cost constraints. The system then explores all the possible permutations of a solution and quickly generates design alternatives. IoT, on the other hand, integrates physical objects with sensors and software to allow designers to create interconnected products that can communicate with each other and with users in real-time. A notable example is the Philips Hue lighting system, which allows users to control light settings from their mobile devices, creating personalized environments.  

 Learn more about how AI is changing design and the world in this video with AI Product Designer, Ioana Teleanu:  

In the 4IR, essential skills for designers extend beyond traditional design competencies to include digital literacy, an understanding of emerging technologies and the ability to work with data. Proficiency in tools and platforms that leverage AI, IoT, VR/AR and 3D printing has become increasingly important. For instance, designers must be adept at using AI for user experience personalization and predictive analytics, as seen in platforms like Adobe Sensei, which helps automate and enhance creative tasks. Additionally, critical thinking, creativity and problem-solving remain foundational and enable designers to devise innovative solutions to complex problems. Collaboration skills are also vital, as the multidisciplinary nature of 4IR projects often requires working closely with engineers, data scientists and other specialists. The ability to continuously learn and adapt is crucial, given the rapid pace of technological change.  

 Learn more about essential skills for the 4IR in our courses AI for Designers , UX Design for Virtual Reality and UX Design for Augmented Reality .

The 4IR has significantly impacted UX and UI design practices by pushing the boundaries of customization, interactivity and user engagement. With the integration of technologies such as AI, IoT, VR and AR, designers are now able to create more personalized and immersive experiences. AI and machine learning offer the ability to analyze user data in real-time which enables the creation of interfaces that adapt to user behaviors and preferences. For example, Spotify uses machine learning to tailor music recommendations to individual tastes to enhance the user experience through personalization. 

 In addition, VR and AR technologies are redefining user interactions with digital products by offering immersive experiences that were previously not possible. AR apps like IKEA Place allow users to visualize furniture in their homes before making a purchase, merging digital and physical realities to improve decision-making and satisfaction. These advancements demand that UX/UI designers not only focus on traditional design principles but also on understanding and leveraging these emerging technologies to create seamless, intuitive and engaging user experiences. The emphasis on user-centered design has never been more critical as designers strive to ensure that technological advancements enhance rather than complicate the user experience. 

 Learn more about UX and UI Design for AR, VR and XR in our courses UX Design for Virtual Reality and UX Design for Augmented Reality , as well as our Master Classes How To Craft Immersive Experiences in XR and How to Innovate with XR .

Virtual and Augmented Reality (VR/AR) are transforming product design by enabling designers to create immersive and interactive prototypes which enhances the design process, user testing and user engagement. This capability is invaluable for industries such as automotive and architecture, where designers and engineers can virtually walk through a building or experience a car's interior before any physical prototype is built. For example, Ford uses VR to simulate car designs to allow for rapid iteration and testing of ergonomic and aesthetic features without the need for physical models. 

AR, on the other hand, overlays digital information onto the real world to enhance a user's perception of reality. This technology is particularly transformative in retail and interior design, as seen in. IKEA's AR app, IKEA Place. 

VR and AR technologies offer powerful tools for designers to not only improve the efficiency and effectiveness of the design process but also to create products and experiences that are more aligned with user needs and expectations. These technologies facilitate a more iterative design process, where feedback can be gathered and implemented quickly and lead to higher-quality and more user-friendly products. 

Learn more about UX Design for VR and AR in our courses UX Design for Virtual Reality and UX Design for Augmented Reality .

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF) coined the term term the Fourth Industrial Revolution. He introduced this concept in his 2016 book of the same name. It remains the most influential book on the topic.   

Schwab, K. (2016). The Fourth Industrial Revolution. Portfolio. 

In the 4IR, data analytics plays a crucial role in design—it empowers designers with insights that drive more informed, user-centric decisions. Through the analysis of large datasets, designers can uncover patterns, trends and user behaviors that inform every stage of the design process, from conceptualization to final product development. This data-driven approach enables the creation of products and services that truly meet user needs and preferences. 

For example, in UX/UI design, data analytics can optimize user interfaces based on actual user interaction data and lead to more intuitive and effective designs. Companies like Netflix use data analytics to tailor content and recommendations to individual users, which enhances user experience. In product design, data analytics can inform feature development, usability improvements and even predict future trends, to ensure products remain relevant and competitive.  

Additionally, in the context of sustainable design, data analytics can identify areas where resources can be optimized or reduced, contributing to more environmentally friendly design solutions. Overall, data analytics bridges the gap between user expectations and design outcomes, making it an indispensable tool in the 4IR design toolkit. 

Learn more about data-driven design in our course Data-Driven Design: Quantitative Research for UX . 

Designers can leverage machine learning (ML) and AI in their work to enhance creativity, efficiency and user experience. One primary way is through the automation of routine tasks such as data analysis, which allows designers to focus more on the creative aspects of their projects. For example, Adobe Sensei, Adobe's AI and ML technology, automates complex processes like image editing and pattern recognition, to speed up the design workflow. 

Additionally, ML and AI can generate design alternatives and suggest improvements by learning from vast datasets of design elements and user interactions. This capability supports designers in exploring a wider range of options and making informed decisions based on predicted user preferences and behaviors. 

AI can also personalize user experiences in real-time by adapting interfaces, content and recommendations to individual user needs. Streaming services like Netflix and Spotify use AI to analyze viewing or listening habits, respectively, to deliver highly personalized content recommendations, to improve user satisfaction. 

Additionally, designers can use AI for more accurate user testing and feedback gathering. Tools powered by AI can simulate how users interact with designs to provide valuable insights without the need for extensive user testing sessions. 

Learn more about AI and ML, especially in the context of design, in our course AI for Designers . 

Watch the trailer here:  

In the Fourth Industrial Revolution, designers face several ethical considerations that stem from the increased use of emerging technologies like AI, IoT and big data analytics. Key ethical considerations include: 

Privacy and data protection : With the extensive collection and analysis of user data, designers must ensure they respect user privacy and comply with data protection laws. This involves designing systems that are secure by default and transparent about how user data is collected, used and stored. 

Bias and fairness : AI and machine learning algorithms can inadvertently perpetuate biases present in their training data, leading to unfair or discriminatory outcomes. Designers must strive to use diverse datasets and regularly audit algorithms to minimize bias. 

Accessibility and inclusiveness : The 4IR offers opportunities to make designs more accessible to a wider audience, including people with disabilities. Designers have a responsibility to ensure their products and services are inclusive, providing equal access and opportunities for everyone. 

Sustainability : With the growing concern over environmental issues, designers must consider the ecological impact of their designs. This includes choosing sustainable materials, designing for energy efficiency and considering the entire lifecycle of products to minimize waste. 

Accountability and transparency : As AI systems become more autonomous, designers must ensure that these systems are transparent in their decision-making processes and that there are mechanisms in place for accountability, especially in critical applications like healthcare or autonomous vehicles. 

User autonomy and manipulation : Designers need to be mindful of not creating manipulative designs that exploit user psychology for profit, such as dark patterns that trick users into making decisions against their interests. 

An example of ethical design in practice is the development of AI in healthcare, where designers and developers are working to ensure systems are transparent, explainable and free from bias to recognize the critical impact these systems have on patient care and outcomes. Ethical considerations in the 4IR are complex and evolving, requiring designers to stay informed and engaged with the latest developments in technology ethics. 

Learn more about the ethics and transparency in AI in the article AI Challenges and How You Can Overcome Them: How to Design for Trust .  

The role of human-centered design (HCD) is evolving significantly with the advent of the 4IR technologies, such as AI, IoT, VR/AR and big data analytics. HCD's core principle is to design with a deep focus on the needs, wants and limitations of end-users. That remains intact, but the scope and impact of this approach have expanded dramatically. 

In the 4IR, HCD is not just about products and services that are easy and intuitive to use; it's increasingly about how designers can leverage technology to make life better, work more productive and societies more inclusive. For example, AI and machine learning are being used to create more personalized experiences in everything from healthcare apps that provide tailored health advice, to educational platforms that adapt to the learning pace of individual students. 

In addition, HCD in the 4IR means designing for ethics and sustainability—to consider not just the immediate impact of a design on users, but also its long-term effects on society and the environment. This includes using IoT to create smart cities that enhance the quality of life, employing VR to train medical professionals without the need for physical resources and applying big data analytics to tackle complex social issues like poverty and climate change.  

Learn more about HCD in our Master Class Human-Centered Design for AI and our article Human-Centered Design: How to Focus on People When You Solve Complex Global Challenges . 

The Fourth Industrial Revolution has had a profound impact on sustainable and inclusive design—it’s offered new opportunities and challenges to create solutions that are environmentally friendly and accessible to all. The integration of technologies such as AI, IoT, VR/AR and big data analytics into the design process enables more informed decision-making, which leads to designs that can better address environmental concerns and social inequalities. 

In terms of sustainability, 4IR technologies allow for the optimization of resources and energy efficiency in product design and manufacturing processes. For example, AI can be used to analyze and predict patterns in energy consumption, which leads to the development of smarter, more energy-efficient buildings. Similarly, 3D printing technology enables the production of components with minimal waste and the use of sustainable materials further reduces the environmental footprint of manufactured goods. 

From an inclusivity perspective, 4IR technologies are breaking down barriers for people with disabilities and those in marginalized communities. For instance, AI-powered assistive devices can improve the quality of life for people with visual or auditory impairments, while AR and VR technologies offer new ways to experience content and services for those who may be physically unable to access them in traditional ways. 

Moreover, big data analytics play a crucial role in identifying and addressing gaps in accessibility and inclusivity and enable designers to create products and services that cater to a wider range of needs and preferences. This data-driven approach ensures that design decisions are based on real-world insights for more effective and impactful solutions. 

Learn more about sustainable design in our piece What is Sustainable Design? Take our course Design for Better World with Don Norman for an in-depth learning experience. 

Literature on The Fourth Industrial Revolution

Here’s the entire UX literature on The Fourth Industrial Revolution by the Interaction Design Foundation, collated in one place:

Learn more about The Fourth Industrial Revolution

Take a deep dive into The Fourth Industrial Revolution with our course Design for a Better World with Don Norman .

“Because everyone designs, we are all designers, so it is up to all of us to change the world. However, those of us who are professional designers have an even greater responsibility, for professional designers have the training and the knowledge to have a major impact on the lives of people and therefore on the earth.” — Don Norman, Design for a Better World

Our world is full of complex socio-technical problems:

Unsustainable and wasteful practices that cause extreme climate changes such as floods and droughts.

Wars that worsen hunger and poverty .

Pandemics that disrupt entire economies and cripple healthcare .

Widespread misinformation that undermines education.

All these problems are massive and interconnected. They seem daunting, but as you'll see in this course, we can overcome them.

Design for a Better World with Don Norman is taught by cognitive psychologist and computer scientist Don Norman. Widely regarded as the father (and even the grandfather) of user experience, he is the former VP of the Advanced Technology Group at Apple and co-founder of the Nielsen Norman Group.

Don Norman has constantly advocated the role of design. His book “The Design of Everyday Things” is a masterful introduction to the importance of design in everyday objects. Over the years, his conviction in the larger role of design and designers to solve complex socio-technical problems has only increased.

This course is based on his latest book “Design for a Better World,” released in March 2023. Don Norman urges designers to think about the whole of humanity, not just individual people or small groups.

In lesson 1, you'll learn about the importance of meaningful measurements . Everything around us is artificial, and so are the metrics we use. Don Norman challenges traditional numerical metrics since they do not capture the complexity of human life and the environment. He advocates for alternative measurements alongside traditional ones to truly understand the complete picture.

In lesson 2, you'll learn about and explore multiple examples of sustainability and circular design in practice. In lesson 3, you'll dive into humanity-centered design and learn how to apply incremental modular design to large and complex socio-technical problems.

In lesson 4, you'll discover how designers can facilitate behavior-change , which is crucial to address the world's most significant issues. Finally, in the last lesson, you'll learn how designers can contribute to designing a better world on a practical level and the role of artificial intelligence in the future of design.

Throughout the course, you'll get practical tips to apply in real-life projects. In the " Build Your Case Study" project, you'll step into the field and seek examples of organizations and people who already practice the philosophy and methods you’ll learn in this course.

You'll get step-by-step guidelines to help you identify which organizations and projects genuinely change the world and which are superficial. Most importantly, you'll understand what gaps currently exist and will be able to recommend better ways to implement projects. You will build on your case study in each lesson, so once you have completed the course, you will have an in-depth piece for your portfolio .

All open-source articles on The Fourth Industrial Revolution

Use circular design to reverse harm.

essay on the fourth industrial revolution

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The Fourth Industrial Revolution: what it means, how to respond

essay on the fourth industrial revolution

.chakra .wef-1c7l3mo{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;}.chakra .wef-1c7l3mo:hover,.chakra .wef-1c7l3mo[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-1c7l3mo:focus,.chakra .wef-1c7l3mo[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);} Klaus Schwab

essay on the fourth industrial revolution

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Stay up to date:, fourth industrial revolution.

We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.

The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.

4th-industrial-revolution

There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.

The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.

Already, artificial intelligence is all around us, from self-driving cars and drones to virtual assistants and software that translate or invest. Impressive progress has been made in AI in recent years, driven by exponential increases in computing power and by the availability of vast amounts of data, from software used to discover new drugs to algorithms used to predict our cultural interests. Digital fabrication technologies, meanwhile, are interacting with the biological world on a daily basis. Engineers, designers, and architects are combining computational design, additive manufacturing, materials engineering, and synthetic biology to pioneer a symbiosis between microorganisms, our bodies, the products we consume, and even the buildings we inhabit.

Challenges and opportunities

Like the revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise global income levels and improve the quality of life for populations around the world. To date, those who have gained the most from it have been consumers able to afford and access the digital world; technology has made possible new products and services that increase the efficiency and pleasure of our personal lives. Ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game—any of these can now be done remotely.

In the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.

At the same time, as the economists Erik Brynjolfsson and Andrew McAfee have pointed out, the revolution could yield greater inequality, particularly in its potential to disrupt labor markets. As automation substitutes for labor across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor. On the other hand, it is also possible that the displacement of workers by technology will, in aggregate, result in a net increase in safe and rewarding jobs.

We cannot foresee at this point which scenario is likely to emerge, and history suggests that the outcome is likely to be some combination of the two. However, I am convinced of one thing—that in the future, talent, more than capital, will represent the critical factor of production. This will give rise to a job market increasingly segregated into “low-skill/low-pay” and “high-skill/high-pay” segments, which in turn will lead to an increase in social tensions.

In addition to being a key economic concern, inequality represents the greatest societal concern associated with the Fourth Industrial Revolution. The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital—the innovators, shareholders, and investors—which explains the rising gap in wealth between those dependent on capital versus labor. Technology is therefore one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries: the demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. The result is a job market with a strong demand at the high and low ends, but a hollowing out of the middle.

This helps explain why so many workers are disillusioned and fearful that their own real incomes and those of their children will continue to stagnate. It also helps explain why middle classes around the world are increasingly experiencing a pervasive sense of dissatisfaction and unfairness. A winner-takes-all economy that offers only limited access to the middle class is a recipe for democratic malaise and dereliction.

Discontent can also be fueled by the pervasiveness of digital technologies and the dynamics of information sharing typified by social media. More than 30 percent of the global population now uses social media platforms to connect, learn, and share information. In an ideal world, these interactions would provide an opportunity for cross-cultural understanding and cohesion. However, they can also create and propagate unrealistic expectations as to what constitutes success for an individual or a group, as well as offer opportunities for extreme ideas and ideologies to spread.

The impact on business

An underlying theme in my conversations with global CEOs and senior business executives is that the acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed. Indeed, across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution are having a major impact on businesses.

On the supply side, many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. Disruption is also flowing from agile, innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.

Major shifts on the demand side are also occurring, as growing transparency, consumer engagement, and new patterns of consumer behavior (increasingly built upon access to mobile networks and data) force companies to adapt the way they design, market, and deliver products and services.

A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the “sharing” or “on demand” economy. These technology platforms, rendered easy to use by the smartphone, convene people, assets, and data—thus creating entirely new ways of consuming goods and services in the process. In addition, they lower the barriers for businesses and individuals to create wealth, altering the personal and professional environments of workers. These new platform businesses are rapidly multiplying into many new services, ranging from laundry to shopping, from chores to parking, from massages to travel.

On the whole, there are four main effects that the Fourth Industrial Revolution has on business—on customer expectations, on product enhancement, on collaborative innovation, and on organizational forms. Whether consumers or businesses, customers are increasingly at the epicenter of the economy, which is all about improving how customers are served. Physical products and services, moreover, can now be enhanced with digital capabilities that increase their value. New technologies make assets more durable and resilient, while data and analytics are transforming how they are maintained. A world of customer experiences, data-based services, and asset performance through analytics, meanwhile, requires new forms of collaboration, particularly given the speed at which innovation and disruption are taking place. And the emergence of global platforms and other new business models, finally, means that talent, culture, and organizational forms will have to be rethought.

Overall, the inexorable shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business. The bottom line, however, is the same: business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.

The impact on government

As the physical, digital, and biological worlds continue to converge, new technologies and platforms will increasingly enable citizens to engage with governments, voice their opinions, coordinate their efforts, and even circumvent the supervision of public authorities. Simultaneously, governments will gain new technological powers to increase their control over populations, based on pervasive surveillance systems and the ability to control digital infrastructure. On the whole, however, governments will increasingly face pressure to change their current approach to public engagement and policymaking, as their central role of conducting policy diminishes owing to new sources of competition and the redistribution and decentralization of power that new technologies make possible.

Ultimately, the ability of government systems and public authorities to adapt will determine their survival. If they prove capable of embracing a world of disruptive change, subjecting their structures to the levels of transparency and efficiency that will enable them to maintain their competitive edge, they will endure. If they cannot evolve, they will face increasing trouble.

This will be particularly true in the realm of regulation. Current systems of public policy and decision-making evolved alongside the Second Industrial Revolution, when decision-makers had time to study a specific issue and develop the necessary response or appropriate regulatory framework. The whole process was designed to be linear and mechanistic, following a strict “top down” approach.

But such an approach is no longer feasible. Given the Fourth Industrial Revolution’s rapid pace of change and broad impacts, legislators and regulators are being challenged to an unprecedented degree and for the most part are proving unable to cope.

How, then, can they preserve the interest of the consumers and the public at large while continuing to support innovation and technological development? By embracing “agile” governance, just as the private sector has increasingly adopted agile responses to software development and business operations more generally. This means regulators must continuously adapt to a new, fast-changing environment, reinventing themselves so they can truly understand what it is they are regulating. To do so, governments and regulatory agencies will need to collaborate closely with business and civil society.

The Fourth Industrial Revolution will also profoundly impact the nature of national and international security, affecting both the probability and the nature of conflict. The history of warfare and international security is the history of technological innovation, and today is no exception. Modern conflicts involving states are increasingly “hybrid” in nature, combining traditional battlefield techniques with elements previously associated with nonstate actors. The distinction between war and peace, combatant and noncombatant, and even violence and nonviolence (think cyberwarfare) is becoming uncomfortably blurry.

As this process takes place and new technologies such as autonomous or biological weapons become easier to use, individuals and small groups will increasingly join states in being capable of causing mass harm. This new vulnerability will lead to new fears. But at the same time, advances in technology will create the potential to reduce the scale or impact of violence, through the development of new modes of protection, for example, or greater precision in targeting.

The impact on people

The Fourth Industrial Revolution, finally, will change not only what we do but also who we are. It will affect our identity and all the issues associated with it: our sense of privacy, our notions of ownership, our consumption patterns, the time we devote to work and leisure, and how we develop our careers, cultivate our skills, meet people, and nurture relationships. It is already changing our health and leading to a “quantified” self, and sooner than we think it may lead to human augmentation. The list is endless because it is bound only by our imagination.

I am a great enthusiast and early adopter of technology, but sometimes I wonder whether the inexorable integration of technology in our lives could diminish some of our quintessential human capacities, such as compassion and cooperation. Our relationship with our smartphones is a case in point. Constant connection may deprive us of one of life’s most important assets: the time to pause, reflect, and engage in meaningful conversation.

One of the greatest individual challenges posed by new information technologies is privacy. We instinctively understand why it is so essential, yet the tracking and sharing of information about us is a crucial part of the new connectivity. Debates about fundamental issues such as the impact on our inner lives of the loss of control over our data will only intensify in the years ahead. Similarly, the revolutions occurring in biotechnology and AI, which are redefining what it means to be human by pushing back the current thresholds of life span, health, cognition, and capabilities, will compel us to redefine our moral and ethical boundaries.

Shaping the future

Neither technology nor the disruption that comes with it is an exogenous force over which humans have no control. All of us are responsible for guiding its evolution, in the decisions we make on a daily basis as citizens, consumers, and investors. We should thus grasp the opportunity and power we have to shape the Fourth Industrial Revolution and direct it toward a future that reflects our common objectives and values.

To do this, however, we must develop a comprehensive and globally shared view of how technology is affecting our lives and reshaping our economic, social, cultural, and human environments. There has never been a time of greater promise, or one of greater potential peril. Today’s decision-makers, however, are too often trapped in traditional, linear thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping our future.

In the end, it all comes down to people and values. We need to shape a future that works for all of us by putting people first and empowering them. In its most pessimistic, dehumanized form, the Fourth Industrial Revolution may indeed have the potential to “robotize” humanity and thus to deprive us of our heart and soul. But as a complement to the best parts of human nature—creativity, empathy, stewardship—it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny. It is incumbent on us all to make sure the latter prevails.

This article was first published in Foreign Affairs

Author: Klaus Schwab is Founder and Executive Chairman of the World Economic Forum

Image: An Aeronavics drone sits in a paddock near the town of Raglan, New Zealand, July 6, 2015. REUTERS/Naomi Tajitsu

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World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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4th Industrial Revolution: Essay & Important Notes

Evolution of the fourth industrial revolution.

The Fourth Industrial Revolution finds its foundations laid on the third industrial revolution. With the changing technologies and innovations being made throughout the different revolutions, the fourth revolution was bound to take place. The term Fourth Industrial Revolution was coined by Klaus Schwab, the founder and executive chairman of the World Economic Forum.

Technologies Driving Change in the Fourth Industrial Revolution

The 4 th revolution is dominated by a myriad of technologies. These include:

Artificial Intelligence

AI is being used in many ways in different aspects of life. AI can recognize complex patterns, reach voluminous information, and also take decisions on a logical basis. The advent of AI has reached a level wherein people can control appliances in their homes by just giving instructions.

Blockchain is a secure and decentralized manner of recording and sharing data. With this technology, it is possible to improve and track the supply chain, secure sensitive data, and also combat frauds. The best example of this technology being uses these days is the use of cryptocurrency.

Virtual Reality and Augmented Reality

These technologies enable people to experience anything digitally. The use of these technologies has enabled people to overcome the boundaries between the virtual and physical worlds. A good example is how many stores allow their customers to try and experiment with products before making a purchasing decision.

Biotechnology

Biotechnology has made it possible to develop new medicines and drugs to cure life-taking illnesses. These have also made it possible to process and produce cleaner and greener energy, thereby enhancing the chances of a sustainable world.

The design and use of robots for personal and commercial purposes have become commonplace these days. Robots are being used in several industries to enhance efficiency and productivity and reduce human effort.

Internet of Things

Internet of Things has made it possible to connect devices used daily with the internet. With the help of IoT, it has become easy to track different aspects of businesses and industries. An example is the use of IoT by farmers to monitor the quality of fertilizers.

Pros and Cons of Fourth Industrial Revolution

The Fourth Industrial Revolution has brought several advantages for society and businesses including:

  • Increased productivity
  • Improved quality of life
  • Lower barriers to entrepreneurship
  • New markets for businesses

However, the industrial revolution propagated by technology also has some cons too. These include:

  • Inequality: The industrial revolution is beneficial for those who have access to the technologies and can use it for their benefit in the right way. People, businesses, and societies that cannot access technologies lag behind others and cannot benefit from the revolution in any manner.
  • Cybersecurity risk: With the increasing technological innovations, the threat of cybercrimes has also increased. Gadgets, robots, computers, and every technology are prone to attacks by unknown people.
  • Increased competition: The advent of technologies and their subsequent use in different industries and businesses has increased competition and businesses have to do more to survive the competition. Additionally, it also brings forth the issue of ethics as businesses make use of any means to survive the competition.

The Fourth Industrial Revolution radically impacts the daily life of people. The era can be that of knowledge, growth, and improvement in the manner in which people, businesses, and societies work and operates.

Important Notes

  • The Fourth Industrial Revolution is dominating the society and businesses of today.
  • Technological innovations have brought about changes in the way people live and carry out everyday activities.
  • There are many advantages of the Fourth Industrial Revolution as it brings about improvements in the lifestyle and also improves productivity.

With the increasing use of technologies, there are issues related to ethics and unequal access to technologies

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What are Industry 4.0, the Fourth Industrial Revolution, and 4IR?

Robot arm

Augmented reality, machine automation, and more: the 21st-century industrial revolution is digital. Industry 4.0, the Fourth Industrial Revolution, and 4IR all refer to the current era of connectivity, advanced analytics, automation, and advanced-manufacturing technology  that has been transforming global business for years. This wave of change in the manufacturing sector began in the mid-2010s and holds significant potential for operations and the future of production .

What is the Fourth Industrial Revolution?

Get to know and directly engage with senior mckinsey experts on industry 4.0..

Enno de Boer is a senior partner in McKinsey’s New Jersey office. Kweilin Ellingrud is a senior partner and a director of McKinsey Global Institute in the Minneapolis office. Gérard Richter is a senior partner in the Frankfurt office and leader of McKinsey Digital Hubs and Build by McKinsey in Europe. Daniel Swan is a senior partner in the Stamford, Connecticut, office.

Steam propelled the original Industrial Revolution ; electricity powered the second; preliminary automation and machinery engineered the third; and cyberphysical systems—or intelligent computers—are shaping the Fourth Industrial Revolution .

Before 2014, the Google search term “Industry 4.0” was practically nonexistent, but by 2019, 68 percent of respondents to a McKinsey global survey  regarded Industry 4.0 as a top strategic priority. Seventy percent said their companies were already piloting or deploying new technology.

4IR builds on the inventions of the Third Industrial Revolution—or digital revolution—which unfolded from the 1950s and to the early 2000s and brought us computers, other kinds of electronics, the Internet, and much more. Industry 4.0 brings these inventions beyond the previous realm of possibility with four foundational types of disruptive technologies  (examples below) that can be applied all along the value chain:

  • connectivity, data, and computational power: cloud technology , the Internet, blockchain , sensors
  • analytics and intelligence: advanced analytics, machine learning, artificial intelligence  
  • human–machine interaction: virtual reality (VR) and augmented reality (AR) , robotics and automation , autonomous guided vehicles
  • advanced engineering: additive manufacturing  (such as, 3-D printing), renewable energy , nanoparticles

Technology, however, is only half of the Industry 4.0 equation. To thrive in the Fourth Industrial Revolution, companies must ensure that their workers are properly equipped through upskilling and reskilling  and then hire new people when necessary. Upskilling means that employees learn new skills to help them in their current positions as the skills they need evolve. Reskilling is the real challenge: workers are retrained with new skills that will enable them to fill different positions within their companies.

This is increasingly vital as disruptive technologies transform job requirements, but the outlook on reskilling differs geographically . In Europe, 94 percent of surveyed executives believe that the balance between hiring and reskilling should be equal or tip toward reskilling, compared with only 62 percent of US respondents.

The end-to-end skill transformation has three phases:

  • scout —analyze the skills required to achieve a company’s ambitions
  • shape —identify talent gaps that must be addressed and design the program infrastructure to address them
  • shift —develop and implement content and delivery mechanisms to train workers at scale

A conversation with Francisco Betti (head of the Platform for Shaping the Future of Advanced Manufacturing and Production, launched by the World Economic Forum in 2017) and the CEOs of Flex, Protolabs, and Western Digital offers perspective and real-world insights on building workforce capabilities and shifting mindsets  for successful digital transformations in manufacturing. The benefits can go far beyond business outcomes. In the words of Western Digital CEO David Goeckeler, “It’s not just about our company being better and us being prepared for the future; it’s about all of our employees being ready for that future—keeping them at the center, having them highly engaged, all of the reskilling, getting them excited about what the future holds.”

Learn more about our Operations , Advanced Electronics , Financial Services , Technology , Media & Telecommunications , and Sustainability  practices.

What is The Global Lighthouse Network?

The World Economic Forum , in collaboration with McKinsey, launched the Global Lighthouse Network  (GLN) in 2018 to identify organizations and technologies in the vanguard of the Fourth Industrial Revolution. A lighthouse (in this context) is a manufacturing site that has successfully implemented 4IR technologies at scale, with a significant operational impact.

Lighthouses aim to capture more than 80 percent of the identified value of chosen use cases—meaning those involving 4IR technologies. Ultimately, these sites are intended to serve as an Industry 4.0 benchmark  for the transformation of other sites. This may sound similar to the concept of a digital factory—because it is. Digital factories serve as “construction sites”  for companies to implement 4IR technologies and test-run new operations before applying the advances at scale. The difference is that the GLN specifically identifies lighthouses as successful 4IR trailblazers.

Circular, white maze filled with white semicircles.

Introducing McKinsey Explainers : Direct answers to complex questions

Today, 103 lighthouses—such as Tata Steel’s plant in Kalinganagar, India , and select Henkel Laundry & Home Care  production sites—have been identified around the world.

Lighthouses can be built practically anywhere, by small or big companies, in developing or developed economies, and at greenfield or brownfield locations.

Insights from lighthouses that are successfully using 4IR technologies today offer something of a playbook for organizations shaping the future of manufacturing . Digital transformation at scale isn’t easy, but responsible production—combining productivity, sustainability, and active workforce engagement—is within reach.

To get there, six core enablers  can boost the odds of success for your company’s 4IR transformation:

  • An agile approach that incorporates quick iterations, fast fails, and continuous learning, with teams transforming bundled use cases in waves to drive innovation and ongoing refinements.
  • Agile digital studios can help people collaborate effectively, providing designated space where team members from different functions are in proximity for co-creation.
  • The IIoT stack allows for seamless integration of IIoT infrastructure (both legacy and new) to build a stable, flexible tech backbone. Costs can by limited by leveraging existing systems with efficient investment in a new technology stack.
  • An IIoT academy uses adult-learning best practices to upskill the workforce, offering customized learning programs based on the unique individual needs.
  • Tech ecosystems partner with vendors, suppliers, customers, and related industries to source the latest capabilities, offering access to extensive data sets and creating opportunities for innovating together.
  • Transformation offices can form a governance hub to support the launch and scale-up of a lighthouse, making progress and priorities transparent, ensuring value continues to be captured, and accelerating change.

Of these, two are particularly important: an agile approach  and a transformation office .

Any company can begin its Industry 4.0 journey in a small way at one site and then scale up quickly. Otherwise, it could be doomed to “ pilot purgatory ”: companies try out (or pilot) new technologies but fail to apply them at scale, stalling the 4IR transition. As of late 2020, about 74 percent of surveyed companies  reported being in pilot purgatory.

What are the advantages of the Fourth Industrial Revolution?

The Fourth Industrial Revolution could make products and services more easily accessible and transmissible for businesses, consumers, and stakeholders all along the value chain. Preliminary data indicate that successfully scaling 4IR technology makes supply chains more efficient  and working hours more productive, reduces factory waste, and has countless other benefits for employees, stakeholders, and consumers.

Implementing Industry 4.0 technology is also especially advantageous amid the challenges of the pandemic. In fact, COVID-19 has accelerated the 4IR transition  because physical distancing and shifting consumer demands forced companies to embrace digitization and contactless operations. Six months into the pandemic, 94 percent of the respondents to a McKinsey survey said that Industry 4.0 had helped keep the operations of their companies running, and 56 percent considered these technologies critical to the crisis response.

Before the pandemic, the top motivators for companies to digitize varied by industry. But in 2020, three drivers  were common across all sectors and geographies: agility, flexibility, and manufacturing efficiency. Companies that had already scaled up Industry 4.0 technologies before COVID-19 were better positioned to handle the challenges that arose.

  • One consumer-packaged-goods company in Asia built a digital twin  of its supply chain to simulate different scenarios. During the pandemic, the company used this simulator to prepare for sudden shutdowns or disruptions in the supply of materials.
  • When one coffee machine plant in Treviso, Italy, transformed itself  from an uncompetitive site into a manufacturing lighthouse, labor productivity rose by 33 percent and lead times fell by 82 percent.
  • Of the surveyed companies that had not begun implementing Industry 4.0 technologies, 56 percent felt constrained  in their responses to the pandemic’s challenges as a result.

Learn more about our Operations  practice.

Tell me more about the Fourth Industrial Revolution, workforce engagement, and the future of manufacturing?

Workforce engagement is vital to a successful 4IR transformation. Indeed, even a company with the best tools, newest technology, and immense resources is unlikely to scale up a 4IR transformation successfully if the workforce is not engaged. A concerted focus on people has also helped organizations build resilience by helping workers develop new skills, so that the business can respond more flexibly to change. In practice, this could entail rethinking training and skill development  pathways, and make structural changes for the longer term.

Here are five areas  where manufacturers are already promoting high workforce engagement:

  • learning and development (for example, with extended competencies and skills, via the combination of hard, soft and digital skills, and apprenticeship )
  • empowerment and ownership (for instance, through outcome and results-oriented steering, or by encouraging workers to make their own decisions)
  • collaborations and connections (say, by working with cross-functional and multiskilled teams, or developing extended networks in the organization and beyond)
  • impact and recognition (for example, by creating accountability for achievements or by celebrating successes)
  • the voice of the worker (for instance, by using digital channels and data to gather input from workers’ voices, or by seeking to understand their hidden needs)

How about Industry 4.0 digitization and opportunities for sustainability?

The Fourth Industrial Revolution creates opportunities for sustainability  and, more important, these advances are inherently more sustainable than current business practices. Some people think productive operations are hard to square with environmental responsibility, but sustainable lighthouses challenge that notion: 4IR transformations facilitate a viable kind of eco-efficiency that intrinsically meshes sustainability with competitive excellence.

Eco-efficiency includes three dimensions of digital technology:

  • enabling data-informed actions in production and the broader end-to-end value chain
  • realizing improvements across performance indicators, such as cost, agility, convenience, and quality
  • driving sustainability gains by limiting consumption, resource waste, and emissions

Consider a few examples of how Industry 4.0 technologies that maximize efficiency also minimize waste:

  • One Singapore lighthouse decreased its scrap output  from building semiconductors by 22 percent in a smart factory enabled by the industrial Internet of Things, or IIoT. (See a related Explainer, “ What is the Internet of Things? ,” for more.)
  • Schneider Electric’s smart factory in Lexington, Kentucky, combined IoT  connectivity and predictive analytics to lower energy use by 26 percent, CO 2 emissions by 30 percent, and water use by 20 percent.
  • Sixty percent of the 103 lighthouses identified by the Global Lighthouse Network include sustainability among their top five Fourth Industrial Revolution use cases.

And more broadly, lighthouses demonstrate how 4IR technologies can promote responsible growth  in the long term. How? Through action in three broad areas:

  • Environmental: Taking care of our planet and the surrounding environment. Areas of focus for lighthouses in this category include energy, water, waste, greenhouse-gas emissions, and the circular economy .
  • Social: Building a stronger workforce and community. For lighthouses, focus areas might include human-capital development, the voice of the worker, health and safety, and labor standards.
  • Governance: Establishing a set of practice, controls, and procedures to govern, make decisions, and meet the needs of stakeholders. This can encompass focus areas such as ownership, accountability, business ethics, and governance structure.

Learn more about our Operations , Digital McKinsey , and Sustainability  practices.

What is Industry 4.0’s impact on the economy?

Industry 4.0 will continue to have a significant impact on the economy. The greatest economic boons will go to the fastest-acting companies.

According to a 2018 McKinsey Global Institute analysis, Industry 4.0 front-runners—facilities well on their way to adopting AI and other advanced technologies by 2025—can expect a 122 percent positive cash flow change . Follower companies can expect just 10 percent, while companies that wholly fail to adopt AI could see a 23 percent downturn.

Industry 4.0 is also projected to transform the skill sets of the workforce  by shifting the standards for sought-after talent. Over the coming decade, we will see these changes as more and more companies embrace robotics:

  • Demand for physical and manual skills in repeatable tasks, like those on assembly lines, will decline by nearly 30 percent.
  • Demand for basic literacy and numeracy skills will decline by almost 20 percent.
  • Demand for technological skills such as coding will rise by more than 50 percent.
  • Demand for complex cognitive skills will rise by about 33 percent.
  • Demand for high-level social and emotional skills will rise by more than 30 percent.

In 2025, the value creation potential of Industry 4.0 for manufacturers and suppliers is expected to reach $3.7 trillion .

What industries are being transformed by Industry 4.0?

Every single industry will be transformed during the Fourth Industrial Revolution, but some to a greater degree than others. The nature of the Industry 4.0 transition will differ by the specific types of technology being adopted, as well as the existing infrastructure and skills of organizations. The transformation can be broken down into three archetypes of adoption pathways :

  • Accelerated. Regardless of a company’s existing tech infrastructure (whether advanced or nonexistent) certain inexpensive digital, augmented-reality, and automation solutions are rapidly adoptable without transition headaches.
  • Differential. The existing tech infrastructure will affect how quickly some technologies are adopted. Companies with less foundational information technology (IT), operations technology, and data infrastructure will need time to transition. More advanced companies are better equipped for quick implementation.
  • Slowed or deferred. Even at companies with an advanced tech infrastructure, the adoption of the most cutting-edge innovations (such as full end-to-end automation) will be slow because of the high level of required capital expenditure and the unclear long-term payback.

Operationally intensive sectors, such as manufacturing, transportation, and retailing, will experience the greatest change  because many companies in these sectors employ large numbers of people for tasks particularly suited for automation or digitization. Operations-intensive sectors have 1.3 times more automation potential  than others do.

In these operations-intensive sectors, McKinsey analysis indicates that up to 58 percent of work activities could be automated with current technology. Education, by contrast, is projected to undergo the least degree of change during Industry 4.0; only 25 percent of the sector’s work is automatable.

Learn more about our  Operations  practice.

For more in-depth exploration of these topics, see McKinsey’s collection of insights on operations . Learn more about manufacturing and supply chain consulting , and check out manufacturing-related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

  • “ CEO dialogue: Perspectives on productivity and sustainability ,” November 3, 2021, Enno de Boer , Yves Giraud, and Daniel Swan
  • “ Lighthouses unlock sustainability through 4IR technologies ,” September 27, 2021, Francisco Betti, Enno de Boer , and Yves Giraud
  • “ A manufacturer’s guide to scaling industrial IoT ,” February 5, 2021, Andreas Behrendt , Enno de Boer , Tarek Kasah, Bodo Koerber, Niko Mohr , and Gérard Richter
  • “ Building the vital skills for the future of work in operations ,” August 7, 2020, Kweilin Ellingrud , Rahul Gupta, and Julian Salguero
  • “ Industry 4.0: Reimagining manufacturing operations after COVID-19 ,” July 29, 2020, Mayank Agrawal, Karel Eloot , Matteo Mancini , and Alpesh Patel
  • “ Lighthouses reveal a playbook for responsible industry transformation ,” March 30, 2022, Francisco Betti, Enno de Boer , and Yves Giraud

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The Fourth Industrial Revolution

The beginning of the 21st century is characterized by rapid digital transformation and technological enhancement. Innovative changes that affect business and manufacturing are defined as Industry 4.0 or the Fourth Industrial Revolution (Frank et al. 23). This concept incorporates a new production approach based on the massive introduction of information technologies in various industries, large-scale automation of processes and operations, and artificial intelligence integration.

Digitalization is changing the face and structure of the economies of countries and entire regions. Intra-industry competition is growing, markets are expanding, the competitiveness of industries in individual countries in world markets is increasing. The result is the growth of national economies and challenging traditional industry market models (Frank et al. 22). Moreover, digitalization increases the competitiveness of their participants, thereby determining the growth prospects of the company, industries, and national economies in general. The emergence of digital players has already changed the face of industries such as tourism, telecommunications, printing, passenger transportation, and taxi services.

It is fascinating to pay attention to how much even the routine processes in companies have changed thanks to the technological revolution. For example, an article from the BBC lists such work tools that are already familiar to people, such as e-mail, smartphones, social networks, websites, video conferences (“How Changes in Technology Affect Business Activity – Technological Influence on Business Activity – Eduqas – GCSE Business Revision – Eduqas”). Indeed, what we take for granted is relatively new. In the meantime, these simple technologies have made telecommuting possible during a pandemic, hence helping to avoid considerable losses to humanity. Moreover, such advanced innovations as cyber-physical production systems will fundamentally change the traditional logic of production since each work object will determine what work needs to be done before manufacturing. This completely new architecture of industrial systems can be implemented gradually through the digital modernization of existing production facilities.

Works Cited

Frank, Alejandro Germán, et al. “Industry 4.0 Technologies: Implementation Patterns in Manufacturing Companies.” International Journal of Production Economics , vol. 210, 2019, pp. 15–26. Crossref , Web.

“How Changes in Technology Affect Business Activity – Technological Influence on Business Activity – Eduqas – GCSE Business Revision – Eduqas.” BBC Bitesize , BBC, Web.

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The Fourth Industrial Revolution: Economic Impact and Possible Disruptions

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The Fourth Industrial Revolution: Economic Impact and Possible Disruptions

Author: Emmanuel Obijole, ([email protected]

Department of Economics, University of Ibadan, Ibadan, Nigeria

This is an essay of the writing workshop Nigeria’s Readiness for and the Effect of the Fourth Industrial Revolution , published July 2020

INTRODUCTION

Industrial revolutions often heralded disruptions in the operations of markets and economies. These disruptions are deviations from the status quo and are not always negative. From the first industrial revolution to the third, the productivity of the workforce in affected economies experienced a rapid boost. The fourth industrial revolution (4IR) is not expected to be any different. It is also argued that industrial revolutions result in technological unemployment and increased income inequality.

Whether these disruptions are overly beneficial to an economy or not hinges on the structure of the economy, as well as the roles policymakers play in managing the fallouts of the 4IR disruptions. Assessing Nigeria’s readiness for 4IR, this paper gives an overview of the fourth industrial revolution, presents the possible present and future disruptions in the Nigerian trade and transportation industry, labour market, and recommends realistic policies to manage possible scenarios which these disruptions could birth.

THE FOURTH INDUSTRIAL REVOLUTION AND POSSIBLE DISRUPTIONS

Episodes of technological revolutions have produced transformations transcending spheres of human existence. The first industrial revolution mechanised production using water and steam power. In the second, the discovery of electrical energy further boosted productivity. The third featured automation of the production process using electronics and information technology; and the fourth has been driven by technological breakthroughs in physical, digital, and biological spheres. Some drivers of 4IR include artificial intelligence, robotics, the Internet of Things (IoT), 3D printing, digital platforms, and blockchain technologies (Schwab 2016).

Nigeria, like every other nation, faces the realities of 4IR. With a population of over 200 million people, Nigeria is challenged with a slowdown in economic growth and high unemployment. GDP growth has been below 2% since the 2016 economic recession. The relative contribution of sectors to Nigeria’s economic performance has also changed over the years. While there has been growing investment in tech start-ups and telecommunications, agriculture and manufacturing have been growing below potential. In 2018, services accounted for 37% of GDP, agriculture 25%, trade 16%, manufacturing and construction 13%, and crude oil and solid minerals 9%. (NBS 2018a). Despite the expansion in some sectors, employment creation has lagged behind the fast-growing labour force. In 2018, the unemployment rate was about 23.1% while 20.2% of the labour force was underemployed. (NBS 2018b).

The level of utilization of 4IR technologies is not currently widespread in Nigeria. But there could be potential applications to various sectors of the economy, causing disruptions in industries across the country. (Lou et al. 2019). IoT and drone technologies are expected to be central to the future of agriculture. 3D printing is transforming manufacturing. Automation of jobs due to artificial intelligence and robotics will also cause tectonic transformations in the Nigerian labour market. Blockchains are increasingly finding applications in the financial markets and even international trade. Digital platforms are also transforming both trade and transportation industries as well as other markets.

While the technological revolution is poised to affect markets and segments of the Nigerian economy, it might not radically distort market mechanisms. Market mechanisms refer to the forces of demand and supply, the “invisible hands” regulating a free market economy. Contrary to the misconception that capitalism (accompanying the first industrial revolution) ushered market mechanisms, markets and market mechanisms existed long before (3rd century BC), did not arise with the first industrial revolution, and will not disappear in the evolving “post-industrial” economy (Lipsey 1994, 331). The impact of the fourth industrial revolution does not change the coordinating function of market mechanisms. However, like any other shock, technological changes introduce uncertainties and externalities, necessitating government intervention to correct these market excesses.

TRADE, TRANSPORTATION INDUSTRY AND THE TECHNOLOGICAL REVOLUTION

Over the years, industrial revolutions have bolstered trade. The comparative advantage from specialisation and mechanisation has promoted global growth, engendering international trade. Global supply chains have also increased with the rise of the internet. The current episode of technological change will impact trade via blockchains, digital platforms, IoT among several other drivers of these transformations. International trade has been faster using blockchains since it provides enough flexibility in making payments than the traditional letter of credit. These technologies could reduce shipping and customs processing times by 16-28%, boosting global trade by 6-11%. (Lund et al. 2019).

In Nigeria, the trade sector accounted for about 14% of her GDP in 2018 (NBS 2018a). This trend is expected to increase with greater application of these technologies. Digital platforms like Jumia, Konga, Alibaba, Amazon, and freelancing sites like Upwork and Fiverr are becoming more popular since they lower transaction costs involved in the search process, and connect buyers and sellers directly. Lund et al. (2019) estimate that with increased automation, trade in goods may reduce while trade in services is expected to increase in the future. Since the services sector is outperforming the manufacturing sector, this growth in trade of services is expected to contribute largely to Nigeria’s economic growth.

On transportation, 4IR is revolutionising the industry with the application of artificial intelligence in producing self-driving and smart cars. On-demand ride platforms have also automated and made regular transportation services more convenient. Nigeria’s transportation industry has been a very important sub-sector in the services sector, contributing about 4% of the sector’s output in 2018 (NBS 2018a). Digital platforms like Taxify, Uber, and Bolt are thriving in the transportation sector. With Nigeria’s growing population, increased industrialisation and commercialisation (due to 4IR), the demand for transport is expected to be on the increase. As firms become more competitive and enjoy economies of scale in the industry, transport costs will also be driven down. The revolution in the transportation and trade industry is also creating job opportunities for delivery agents, and freelancers via these digital platforms. A closer look at the labour market disruptions is undertaken in the next section.

LABOUR MARKET DISRUPTIONS

Along with Nigeria’s ever-increasing population, her labour force increased by 6.35% between Q3 2017 and Q3 2018. Meanwhile, employment marginally increased by 0.39%, and the unemployment rate also increased from 18.8% to 23.1% over the same period. (NBS 2018b). While this does not automatically translate to more job losses, it reflects that job creation has been slower than the expansion in the labour force. 53%, 35% and 12% of total employment in 2019 were employed in services, agriculture, and industry respectively. (World Bank 2020). There is a need to add and not reduce jobs, and the fourth industrial revolution could exacerbate this inherent challenge.

4IR is expected to change the future of work in the country, but a pertinent question to be answered is “Are workers going to be better off, or worse-off”? In the previous industrial revolutions, the introduction of machines and new technologies created new jobs demanding new skill-sets. However, lower-skilled employees were often affected: either losing their jobs or having to take wage cuts. The impact of 4IR in the Nigerian labour market depends on whether these technologies complement or substitute labour, and this varies from sector to sector.

Modern economic growth theories support that technological advancement often enhances growth in aggregate output. An important indicator of the likely changes in the labour market is how the growth in output translates to jobs (employment elasticity). PwC (2018) estimated the employment elasticity of the agricultural, manufacturing, and services sectors to be -0.1%, 0.3%, and 0.5% respectively. With businesses becoming more intense in their use of digital technologies, it is projected that there will be job growth especially in information and communication technology (ICT). Thus, a 1% increase in services output will on average increase employment in that sector by 0.5%. Though its employment elasticity is less than proportionate, its impact could be large since services contribute most to employment in Nigeria.

On the flip-side, WEF (2017) reports that about 46% of work activities in Nigeria are susceptible to automation. It is also estimated that about 6% of employers are wary of an inadequately skilled workforce, and this percentage is expected to increase in the future with changing the core skills required across jobs. Nigeria is ranked as having an average capacity to adapt to these disruptions and also averagely exposed to these future trends (compared to advanced economies). However, this will most likely change as these technologies increasingly find applications. This necessitates the role of the government in addressing the possible disruptions to the labour market.

POLICY RESPONSE TO RESOLVE LABOUR MARKET DISRUPTIONS

The burden to take advantage of the fourth industrial revolution is greater on overpopulated developing economies like Nigeria. 4IR ought to be harnessed to confront the nation’s development challenges. However, Nigeria had not developed a national strategy specifically addressing 4IR technologies. (Lou et al. 2019). The effects of the labour market disruptions are illustrated in two scenarios, with policy recommendations to address them. The first case is a situation with not-so-high unemployment but a labour market segregated into low-skill/low-pay and high-skill/high-pay jobs (slight case); and the second is a scenario where unemployment worsens as jobs losses significantly outstrips the new jobs created (extreme case).

To address the skills gap in the slight case, efforts should be made to prioritise education and to have a workforce skilled enough to be complimented and not substituted by 4IR technologies. To further enhance growth potentials, policies should be directed at promoting innovations, creating an enabling environment for businesses to leverage on the opportunities of 4IR, supporting research and development, adopting tax systems and regulations to ensure a smooth industry transformation. Schwab (2016) advocated this in what he termed “agile” governance, i.e. policymakers must be able to adapt regulations to the fast-changing environment, and collaborate closely with business and civil societies to harness the gains from 4IR.

Passive policy responses could put the labour market in the extreme case. As more workers lose their jobs or become underemployed, the returns on labour further lag behind that of capital. And as a result, unemployment and income inequality worsen. To address this in the short-run, social safety nets must be provided to those adversely affected. Over the long-run, policymakers must design frameworks to increase occupational mobility of labour as this will enable workers to easily transit to where their skills are required. Policymakers must ensure that the skills gap is closed and labour can work successfully with 4IR technologies.

The fourth industrial revolution will inevitably affect industries across economies. Given Nigeria’s developing services sector, 4IR could greatly engender economic growth in the future. Trade, transportation, and other market segments could benefit, and new rewarding jobs could also be created. There are however possible challenges of workers being displaced due to automation and widened income inequality. Nigeria must realistically anticipate, be positioned to harness the opportunities embedded in 4IR and adopt policies to cushion the negative effects of these technologies, towards maximising the net gains from the fourth industrial revolution. In the words of William Arthur Ward, “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”

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Lou, Karine, Stephan Kreutzer, Francie Sadeski, Matthieu Lecave, and Fiona Merki. 2019. “Country Case Study: Nigeria.” Unlocking the Potential of the Fourth Industrial Revolution in Africa. Côte d’Ivoire: African Development Bank Group. Study Report.

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Schwab, Klaus. 2016. The Fourth Industrial Revolution: What It Means, How to Respond. Switzerland: World Economic Forum

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The Fourth Industrial Revolution

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Industrial revolution is a crucial improvement and changes in the history of humanity of our current modern world. An Industrial Revolution at its core occurs when a society shifts from using tools to make products to using new sources of energy, such as coal, to power machines in factories. The first industrial revolution was started in the late 18th century, in Britian when steam machine was invented helped to boost up the manufacturing speed. After two and half centuries later, we had experienced the second and third industrial revolution, and now we are stepping into the era of fourth industrial revolution.

The fourth industrial revolution optimises the computerisation of the current industry 3.0. Thanks to the addition of 5G technology, computers able to connect and communicate with one and other to ultimately make decisions without human involvement. A combination of cyber-physical system, the Internet of Things and the Internet of Systems make Industry 4.0 possible and the smart factory a reality. As a result of the support of smart machines that keep getting smarter as they get access to more data, our factories will become more efficient and productive and less wasteful. Ultimately, it’s the network of these machines that are digitally connected with one another and create and share information that results in the true power of Industry 4.0.

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Cyber physical system is one of the most significant key factors and a fundamental enabler for industry revolution 4.0. Cyber-Physical systems (CPSs) represent the technological asset of the fourth industrial revolution. Such systems, integrating a physical and a cyber domain, provide a pervasive and collaborative industrial infrastructure able to support the digital representation of data/information along the product and process lifecycles. The growing demand of autonomy and the need to reduce both the time in taking decisions and the transmission bandwidth are pushing designers in integrating Cyber physical system with intelligent mechanisms[5]. The cyber physical system utilization in industrial settings is provisioned to revolutionise the way enterprises conduct their business from a holistic viewpoint[6].

One of the major challenges faced by the cyber physical system is still security. Security, in contrast, is traditionally viewed as a data or communications security problem to be taken care by computer scientists and/or computer engineers. However, cyber physical systems have additional characteristics that provide chance to attackers; for example, their real-time behaviour means that attackers can cause havoc without stealing or corrupting data, by simply altering the timing of key computations is enough to put the system into an unsafe state. cyber physical systems are also sensitive to a wider range of attacks and design flaws than are information technology (IT) systems. A complete threat model needs both the environment, including the attacker, and the system under threat. Any threat, whether from an attacker or from a bug, can use the security vulnerability of a failure of the system to fully go along with a specification of its characteristics, whether indirect or direct. Disturbing the timing of real-time operations can result in the physical plant to fail[7].

New methodologies, architectures, and algorithms are required to make sure that cyber physical systems meet their required safeness levels. Security techniques must be applied at both design time and runtime. System design provides several opportunities to upgrade the safety and security levels. Designers can examine system models to determine attack surfaces and safety issues and to identify the effectiveness of our solutions to these problems. Synthesis of implementations of cyber physical systems can be used to make sure that specifications and architectures are correctly translated, preventing the introduction of faults that can compromise safety or security. At runtime, we can monitor and analyse system properties to determine attacks and bugs at an early stage. Designs can perform runtime monitors to analyse both the cyber and physical behaviours of the system, comparing observed behaviour with predictions. System components can be fingerprinted to make sure the configuration and consistency with system requirements are always correct[7].

In conclusion, although the era of fourth Industrial revolution has getting closer and closer to our current modern world. However, there are still have many challenges must be faced by the researcher and scientists and to be solve by them in order to prevent the integrated system that leads by the Cloud technologies, cyber physical system, Internet of things systems and etc collapse. Let us look forward to the positive consequences brought by the new industry revolution to the world economy, to the society and to our live. We believe that when the day comes, the advantage will be for companies owning a unique platform that unites many people in around the world. 

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Conclusion: The Fourth Industrial Revolution—Further Research Agenda

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Currently at the very beginning of the Fourth Industrial Revolution, many of its trends are difficult to imagine. The technologies of the Fourth Industrial Revolution affect firms of different sectors and economies to various degrees. The radical and dynamic changes in the global economic landscape generated by the Fourth Industrial Revolution set the questions for further research dealing with major international companies. There is a need for interdisciplinary research of different conceptual views at the intersection of management, marketing, international business, macroeconomics, and sociology. An important issue for possible future research is a new understanding of the role of the state. Studying and understanding the new types of firms and new business models generated by the digital revolution is of considerable interest. The Fourth Industrial Revolution leads to redistribution and overflow of wealth from traditional TNCs of developed countries to their competitors. It is necessary to analyze the difficulties faced by the largest TNCs in conducting digital marketing and management transformation. Modern technologies of the Fourth Industrial Revolution determine the network nature of modern firms and the modular nature of goods, services, and processes. An important research topic is the impact of digitalization on competitiveness and competition in the global market

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Konina, N. (2021). Conclusion: The Fourth Industrial Revolution—Further Research Agenda. In: Konina, N. (eds) Digital Strategies in a Global Market. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-58267-8_19

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The Fourth Industrial Revolution Jobs: Pros and Cons Essay

Executive summary.

We live in a fast-paced world where things change drastically, and one of them is technology. More so, many jobs were replaced by machines that are more efficient and require less effort from humankind, and this has benefited companies a lot because they decreased employment and increased the number of machines and which will give them little to no errors in manufacturing products in the future and pay fewer employees. There are advantages and disadvantages to using machines because using machines will increase efficiency, but it cannot think for themselves as humans do, they can only do specific tasks that are repetitive, but if something happens out of the machine’s programmed script, it would not know what to do in that case like human’s problem-solving skills. And the question is if industry 4.0 prevails, what the next generation will do for a living from a management perspective?

Introduction

The digital revolution profoundly influences people’s lives and is becoming more prominent in numerous areas of the economy and society. The advent of current digital technologies that result in drastic changes is referred to as digitalization as a trend. According to Dexeus (2018), the digital revolution, or digitalization, comprises unique and modern technologies such as artificial intelligence, blockchain, cloud service, robots, virtual and augmented realities, and nano-materials. The digital era is defined by new norms where the world is formed of bits rather than atoms, and information is referred to as raw material. As stated by Dexeus (2018), society has excellent technical capability and flexibility to impact industrial, cultural, financial, and educational industries in the digital era. Furthermore, Internet development and adoption are rapidly expanding and significantly impact the broader economy. Essentially, Industry 4.0 is known as a Smart Factory since it enables continuous process adjustment, learning, and optimization (Lavopa & Delera, 2021). Hence, as technology advances, machines begin to communicate with one another via the Internet of Things, advanced algorithms embolden numerous workflows in various industries and sectors, and bidirectional interfaces enable real-time interactions between users and devices.

The digital revolution that is currently transforming society is referred to as Industry 4.0. The growth and rise of several revolutionary technologies such as Artificial Intelligence, the Internet of Things, Virtual and Augmented Reality, Drones, and 3D printing are part of Industry 4.0. The emerging technologies incorporated within Industry 4.0 alter established practices and create new opportunities. As a result, Industry 4.0 unites humans, automated machinery, robots, and digital technology. The objective is to discuss Industry 4.0, including statistics, definition, challenges, advantages, disadvantages, possibilities in the future, and success factors from a management perspective.

The development of occupations and skills required for the effective implementation of Industry 4.0 is of current interest and relevance to both scholars, policymakers, and practical managers. The use of cutting-edge automation and digital technologies in manufacturing, such as Cyber-Physical Systems, the Internet of Things, cloud computing, and Big Data, is expected to have a substantial impact on work processes and the work environment. Employee roles are projected to alter in terms of substance, and new job kinds will be developed. As a result, new skill needs are expected. Despite the growing interest in the subject, research on the changes in employment and skills required by Industry 4.0 is still in its early stages. So far, a study has been primarily theoretical, providing a broad perspective of the industry 4.0-related capabilities without defining them according to the specificities of the many organizational sectors where technologies are being implemented.

Statistics for industry 4.0 jobs

Areas where the Industry 4.0 concept would affect the number of employees.

Definition of industry 4.0 jobs

Industry 4.0 refers to the digital transformation of traditional industrial and manufacturing processes through the integration of technologies such as the internet of things (IoT), big data, augmented reality (AR) and virtualization, artificial intelligence (AI), and digital communications infrastructure. Industry 4.0 is expected to produce a paradigm shift in industrial production and fundamental changes in labor market dynamics. Benefits include decentralized decision-making in real-time by robots operating industrial facilities and re-shoring manufacturing units to advanced economies. And that includes jobs in the future.

Some issues with industry 4.0 jobs

When it comes to industry 4.0 jobs, we’re confronted with a few issues that could arise over time.

  • Staple wage: Lots of people mightn’t view this as an issue but it is an issue for people who are devoted to their jobs and work hard. In the future jobs, people who work hard will have the same wage as people who doesn’t and that’s a huge issue.
  • Automation: Automation is a big threat in the jobs field in the future because most jobs are being replaced by automation and technology and it’s expected this to rise more in the future.
  • Unstable labor markets: People look for traditional jobs because they know more about them and their routine, so it makes a safe work environment for them. During the development, however, there will be a huge transformation of new jobs that people aren’t used to, which will cause a lot of people to be intimidated.
  • Capitalism: Capitalism is one of the issues in our time, but it will increase in the future, and with it will come inequality and unfairness, which are its selves a problem we face nowadays.
  • Continuous development: Development is definitely a good thing, but it might be an issue in the workforce because it takes a huge place in it and if the jobs are continuously developing, there wouldn’t be time to adapt to the job, we will just be developing it which will show discomfort in the long term.

Challenges of industry 4.0 jobs

The industry 4.0 jobs field poses a variety of challenges, which are divided into the following categories: economic, technical, social, technological, and humanitarian.

  • Changing job functions: Those who spend more time at home and no longer commute to physical offices may demand more diverse activities within walking distance.
  • Offices of the future: It is possible that physical office spaces will be designed to accommodate collaborative activities rather than isolated work.
  • Retail experience: It is expected that physical stores will focus more on experiences than traditional purchasing, such as the convergence of entertainment, shopping, dining, and working.
  • Building footprints: Commercial and office space that is unused may be renovated into apartments. It will require zoning changes and significant investments from building owners.

Advantages of industry 4.0 jobs

With the creation of new jobs today and the advancement of technology intervention, there are many advantages that come along with it that make industry 4.0 jobs the best of all time.

  • Increase in accuracy: As industry 4.0 advances, the possibility of future jobs being accurate will also increase because computers are better at storing, analyzing, interpreting and drawing meaningful conclusions from big data than humans are.
  • Improve in production rate: In the Industrial Revolution, technological advances and productivity improvements are not the only factors that change production processes and how they relate to one another, but they are the most important.
  • Better quality: Since advanced technology will be involved in labor, it will create much better quality since they will be programmed to achieve the work in the most perfect way which will have the best quality.
  • Improved services: Services will improve much more since computers will get the work done in handling big data, and computers have a one-of-a-kind advantage over humans.
  • Low expenses: Since we will depend on machines, we will decrease human labor and replace it with machines which will count as an investment and decrease expenses at the long term.

Disadvantages of industry 4.0 jobs

As well as the advantages of industry 4.0 jobs, there are disadvantages as well:

  • Limited job opportunities: While machines occupy future jobs there be fewer and limited job opportunities for humans which count as a disadvantage of industry 4.0 jobs.
  • Less income: The few jobs that will remain in the industry 4.0 jobs will have less income due to the expenses of technology at that time.
  • More repair cost: Machines cost lots of money but also repairing them costs more expenses and energy, which’s a big problem in the industry 4.0 because there is a huge dependence on machines and technology.
  • Increase in unemployment: Technology and machines will take a huge place in the future jobs field, which will result from increasing in the unemployment rate.
  • More poverty: As we mentioned earlier, future jobs will be limited, the income will be less and there will be an increase in unemployment which will all lead to a poverty rate increase and that’s one of the disadvantages of industry 4.0 jobs.

Detailed disadvantages

AI and automation will affect one-fifth of the worldwide workforce, with the greatest influence in industrialized countries such as the United Kingdom, Germany, and the United States. By 2022, half of the employers expect automation to reduce their full-time workforce, and by 2030, robots will have replaced 800 million humans around the world.

While these figures may appear disheartening, they could just reflect a shift in the workforce, and displaced workers with the correct skills could take on more lucrative employment. According to the World Economic Forum, 38% of organizations believe AI and automation technology would enable employees to do new productivity-enhancing occupations, while over 25% believe automation will lead to the introduction of new roles.

Detailed advantages

In addition to new roles and duties, the 4th Industrial Revolution may lead to an increase in the use of professional contractors or remote workers by businesses. Employers may become more supportive of existing employees who desire to work remotely or with greater flexibility as a result of new technologies and shifting needs.

Giving future and current employees more flexibility in terms of how, when, and where they work may be extremely helpful to businesses. It may enable them to hire a global workforce, boost employee loyalty and commitment, scale more quickly, and achieve new levels of efficiency. Employees gain as well, because not having to commute means more free time, a better work-life balance, and more flexibility, all of which contribute to total employee happiness and dedication.

The most jobs to be Impacted

Nearly every industry will be impacted by the 4th Industrial Revolution, with 50% of jobs at risk of being automated. However, because robots, like human employees, have a specialized skill set, some industries are more likely to be mechanized than others.

We should expect a drop in the number of full-time employees in manufacturing and agricultural occupations in the near future, as many of these jobs are already being phased out due to increased automation. Robots can also execute jobs in industrial plants more effectively and safely, and their application in production dates back to the 1970s.

The OECD published a list of professions that are likely to become obsolete or automated in specific industries. Food preparation, construction, cleaning, driving, and agricultural vocations are at the top of the list.

Automated for the people

Detailed challenges

  • A Technical Skills Gap . The workforce’s needs are always changing. Is it possible for your employees to keep up? When looking for candidates to fill unfilled roles, seek for people who have “digital dexterity,” or the ability to grasp both industrial processes and the digital tools that support them. Business models will only be able to successfully deploy new technology and manage operations if they have suitable employees.
  • Data Sensitivity. As technology advances, worries about data and IP privacy, ownership, and management have grown. Is there a common example? Data is required to train and test an AI algorithm before it can be properly implemented. The data must be provided in order for this to happen. Many businesses, on the other hand, are hesitant to share their data with third-party solution developers. Furthermore, our present data governance regulations for internal use within enterprises are insufficient to facilitate data exchange across organizations.
  • Interoperability . The lack of separation between protocols, components, products, and systems is another key concern. Interoperability, unfortunately, limits firms’ ability to innovate. Interoperability also limits possibilities for upgrading system components because they cannot easily “swap out” one vendor for another or one aspect of the system for another.
  • Security . Threats to the factory’s present and emerging vulnerabilities are other major worries. Real-time interoperability is possible because of the physical and digital components that make up smart factories, but it comes with the risk of a larger attack surface. When various machines and gadgets are connected to single or multiple networks in a smart factory, flaws in any one of them could make the entire system vulnerable to attack. Companies must anticipate both enterprise system vulnerabilities and machine-level operational weaknesses to assist in tackling this issue. Many businesses rely on their technology and solution providers to identify vulnerabilities, therefore, they aren’t completely equipped to deal with these security concerns.
  • Handling Data Growth. As more businesses rely on AI, they will be confronted with more data that is generated at a quicker rate and provided in a variety of formats. AI systems must be easy to understand in order to sift through these massive volumes of data. Furthermore, these algorithms must be able to mix data of various sorts and timeframes.

List of important success factors

Some success factors that involve the usage of industry 4.0 and advanced human skills includes top management commitment and support, aligning the initiatives of logistic 4.0 with organizational strategy, technological infrastructure, willingness to invest in logistics 4.0, training and education, and research environment.

  • Top management commitment and support: Organizations need to be supportive and committed to providing the technological aspect financially to adopt industry 4.0 effectively.
  • Aligning the initiative of logistic 4.0 with organizational strategy: to develop and manage the strategies and planning in benefit of adopting 4.0 logistics such as big data analytics, CPS, IoT, and traceability.
  • Technological infrastructure: having a strong technological infrastructure that has the essential smart technology such as real-time condition monitoring and high-speed data sharing technologies is a success factor since it influences other factors like smart work culture and analytical capabilities.
  • Willingness to invest in logistic 4.0: in order to achieve desirable results, investment is a key factor that stakeholders should pay attention to, since logistic 4.0 requires more advanced technologies and the latest inventions that results in high investment cost that will eventually have a greater in the return value.
  • Training and education: since logistic 4.0 is an evolving concept that requires new skills and responsibilities, training and educating candidates is an important factor to succeed in the such matter for humans to maintain jobs that will pay higher salaries for the advanced skills it requires, and to evolve the working place to make a new room for new ideas and innovations.
  • Research environment: creating an environment that develops the processes and technologies to support the adoption of 4.0 logistics is also an important success factor that involves top management, knowledge transfer using a good technology infrastructure, smart working place, and analytical capabilities development.

The effect of industry 4.0 on jobs have been addressed in this essay, and we have seen the advantages and disadvantages of this new era of innovative technologies. More so, if we evaluated both sides of the argument, we can say that the advantages overpower the disadvantages considering that we are living in a fast paced world where we strive to do repetitive tasks faster and more efficient using machines with less error, yes it could lead to less employment in the production sector, but it provides a bigger room to evolve and to learn new skills that will help us grow as a community to innovate new technologies that will help make our daily life less of a hassle. Consequently, industry 4.0 will not only eliminate jobs but rather create new jobs to satisfy the new era of the automated world that we live in, not only that but to keep up with the competitors of the working sector worldwide.

In conclusion, we have talked about the effect of industry 4.0 on jobs in the future, where we saw that there are some issues with industry 4.0 being a threat to people’s jobs and career paths since automated machines will replace most traditional jobs, but the advantage of replacing these traditional jobs is that the manufacturing efficiency will increase, and the work environment will be safer. Adding to that, we have talked about the challenges that industry 4.0 poses to the economy, technology, and other categories. Consequently, we have talked about the advantages and disadvantages, where we have found that industry 4.0 could increase accuracy, improve production, better the quality and services of jobs, but if we are going to replace human jobs with machines, there will be more repair costs for those machines, it will limit job opportunities, decrease traditional jobs income which will cause an increase in the unemployment rate and poverty of unskilled candidates. In addition, we found some success factors that will help people to accommodate the changes and that is by training and educating people to be able to fill in the jobs that require a new set of skills. Also, management organizes the aspects of adopting industry 4.0 efficiently, creating plans and strategies using big data analytics, CPS, and IoT, and that is by having a strong technological infrastructure. As we discussed, industry 4.0 will eliminate some jobs that are no longer needed to be done by humans because machines are able to replace them effectively, but that does not mean that there will be fewer jobs; since we are evolving, new jobs will be created and demanded in the future, requiring new skills that will benefit the work market at the economy.

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COMMENTS

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