[Burning Issue] Fourth Industrial Revolution

Fourth Industrial Revolution: What it Means, Why it’s being Discussed 


  • CEOs, political leaders, social entrepreneurs, technologists and other global leaders are all at Davos to further the World Economic Forum’s mission of improving the state of the world.
  • But, the big buzz at the World Economic Forum (WEF) in Davos this year is about the ‘Fourth Industrial Revolution’.

What is the Fourth Industrial Revolution?

  • As described by the founder and executive chairman of WEF, Klaus Schwab, “the fourth industrial revolution is a technological revolution that will fundamentally alter the way we live, work and relate to one another”.
  • The fourth industrial revolution is the current and developing environment in which disruptive technologies and trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the way we live and work.


1st industrial revolution: The first Industrial Revolution began in Britain in the last quarter of the 18th century with the mechanisation of the textile industry, harnessing of steam power, and birth of the modern factory.

2nd industrial revolution: The Second Industrial Revolution, from the last third of the nineteenth century to the outbreak of World War I, was powered by developments in electricity, transportation, chemicals, steel, and mass production and consumption. Industrialization spread even further – to Japan after the Meiji Restoration and deep into Russia, which was booming at the outset of World War I. During this era, factories could produce countless numbers of identical products quickly and cheaply.

3rd industrial revolution: The third industrial revolution, beginning c. 1970, was digital — and applied electronics and information technology to processes of production. Mass customisation and additive manufacturing — the so-called ‘3D printing’ — are its key concepts, and its applications, yet to be imagined fully, are quite mind-boggling.

How different will be the 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 4th revolution will be characterized by the advent of cyber-physical systems which, while being reliant on the technologies and infrastructure of the third industrial revolution, represent entirely new ways in which technology becomes embedded within societies and even our human bodies. Examples include genome editing, new forms of machine intelligence, and breakthrough approaches to governance that rely on cryptographic methods such as blockchain.
  • Hence, it can be said that the 4th industrial revolution is conceptualised as an upgrade on the third revolution and is marked by a fusion of technologies straddling the physical, digital and biological worlds.

How does mankind benefit from this?

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.

  • By gaining access to the digital world, consumers will be benefited in several ways. With the advent of new technology, we get to use more and more efficient products.
  • 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.

Challenges posed by this revolution

Economists have pointed out that the 4th revolution could yield greater inequality, particularly in its potential to disrupt labour markets.

  • As automation substitutes for labour across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labour.
  • With this revolution, it is also possible 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 labour.

What will be the impact on the 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.

Impacts on national and international security

The Fourth Industrial Revolution will also profoundly impact the nature of national and international security, affecting both the probability and the nature of the 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.
  • As 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 or greater precision in targeting.

The impact on people

The Fourth Industrial Revolution 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.

  • Also, the revolutions occurring in biotechnology, which are redefining what it means to be human by pushing back the current thresholds of lifespan, health, cognition, and capabilities, will compel us to redefine our moral and ethical boundaries too.

How can we be prepared for the Fourth Industrial Revolution?

  • By providing universal access to affordable education and job training.
  • By continuing to ensure basic protection for workers as the changes take place. Governments have, along with the private sector, an obligation to strengthen these core protections.
  • By modernizing infrastructure. Governments have fundamental responsibilities to build roads, bridges, railways, ports, broadband. And all of this can have a profound impact on economic growth, generating well-paying jobs and bringing opportunity to areas where it does not exist.
  • By having a more progressive tax code.
  • By expanding access to capital. Existing capital and the tools that support entrepreneurship should be made widely available to people who haven’t had access to it before.

What the Fourth Industrial Revolution means for India

  • For India, the Fourth Industrial Revolution brings tremendous opportunities to leapfrog many stages of development, hastening its journey towards becoming a developed economy. In many ways, the Fourth Industrial Revolution is a leveller.
  • The technologies being used in India will be the same as those in use in the developed world. Robots, AI, IoT are all technologies transforming the industry in the West and are ready to do the same in India.
  • Companies are adopting different elements of the revolution in diverse ways, some gingerly, some in a sure-footed manner. Many have launched pilot projects, while many others have totally migrated some of their business functions to AI-led processes.
  • There is much that India has to be worried about too. An overreliance on automation will shrink job creation. Automation and robotics in industrial manufacturing suits countries with low productive populations. But it does not suit countries like India, where 12–13 million people enter the job market every year.
  • There is a natural fear of job loss resulting from automation and robotics in India. Repetitive processes are being increasingly automated. Banks in India are already using chatbots and even humanoid robots. HDFC Bank has the Ira robot, which helps customers choose the right service and financial products.
  • There are several projections for job losses owing to factors such as automation and consolidation in the market. A report by PeopleStrong says, one in four job losses in India will happen on account of automation.
  • The use of data analytics is opening up efficiencies in sectors like agriculture that did not exist earlier. Cargill India, for instance, is allowing thousands of traders to be part of the system by using mobile-based pricing data.
  • A report by mobile analytics firm App Annie says India is already the fourth largest app economy. Tim Cook, the CEO of Apple, said more than 750,000 jobs here can be attributed to apps on the Apple IoS platform. Indian developers have created 100,000 apps; registering a growth of 57% over 2016.
  • New industry sectors are being created. These have the potential to create work for millions. There is already an industry association for producing and promoting the use of drones in India.

The Way Ahead for India:

  • India needs a collaborative effort. It will have to create a long-term ecosystem that trains and educates professionals. India could collaborate with the US, Germany, and the EU. The central government can consider a joint platform between ministries, state governments and industry bodies to create a mission for making the most of the Fourth Industrial Revolution technologies.

Suggestions by Niti Aayog CEO Amitabh Kant

  1. There is an urgent need for more industry-academia collaboration and to develop requisite skills in technology.
  2.  Introduction of a compulsory apprenticeship programme to encourage hands-on experience on technology as early as higher secondary level.
  3. He also suggested fortifying quality, prioritizing investments in innovation and R&D and invest in life-long learning for employees. He urged industry to think big and think global.
  4. To effectively embrace digitalisation, the industry has to foster competitive advantage across their value chains, focus on productivity and fill productivity gaps to compete globally.


  • 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. 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.
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