The 4th industrial revolution is here
The world is at the cusp of a hi-tech revolution that is profoundly altering the way we live and work. This revolution will permanently alter our fundamental perception of work, and most notably, our ability to trade time and skill for money. However, one thing is clear; the response to it must be integrated and comprehensive. And it must be now.
In 2015 the World Economic Forum (WEF) coined the phrase the Fourth Industrial Revolution for the sweeping changes technology is making to our world. That WEF report predicts that there are expected 7.1 million job losses over the next five years. This projection further erodes the already scarred South African labour landscape, with 27.1% of the population languishing in unemployment.
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.
The Fourth Industrial Revolution is building on the Third. This digital revolution is characterized by a blending of technologies. The speed of current inventions has no historical precedent. It affects every industry. These changes herald the transformation of entire systems of production and, inevitably, management. There is now even talk of a Fifth Revolution.
Technological innovation will lead to long-term gains in efficiency and productivity. However, this revolution will 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 will stretch the gap between returns to capital and returns to labor. Karl Marx must be smiling in his grave.
Already, in 2012 Momentum Machines built a robot that can make, wrap and bag 360 individually customised hamburgers in an hour. Contrast that with one burger in 8 minutes by a team of McDonald’s human staff. This device is clearly not meant to make employees more efficient but to completely substitute them.
I am certain that talent, more than capital, will represent the critical factor of production. This will give rise to a dichotomy job market polarized into “low-skill/low-pay and high-skill/high-pay” spheres, as articulated by Professor Klaus Schwab, the Founder of the WEF. Surely, we will continue to see an increase in the demand for highly skilled workers and a decrease in the demand for workers with less education and lower skills. Talent management will be the key to survival for businesses, big or small.
The greatest challenge for institutions of higher learning in such a swiftly evolving social and economic environment is how to transfer knowledge and skills to students that will serve them long-term at a time when the pace of change is astounding. Suzanne Hattingh contends that, the world of work of 2020 and beyond will be significantly different from the workplace we know today. Therefore, it is crucial for business leaders to understand the major shifts to ensure that they have their skills planning and supporting strategies in place to survive the turbulence of this revolution.
Similarly, the government, the Sector Education and Training Authorities, training committees and other policy makers must rethink the skills strategies that are failing to prepare the workforce for the supersonic pace of change that is unsettling every industry and dictating every aspect of how we work and how we live. More than 35% of the skills considered important in today’s workforce will have changed within five years.
This calls for training institutions to remodel training if some occupations will significantly change or altogether disappear by the time students graduate. The current emphasis on test scores to determine a learner’s progress has, unfortunately gradually narrowed the definition of education. This has all along been based on the false assumption that if learners do well on standardised tests, then they are well educated. The world of work has demonstrated that this schooling is inadequate. Individuals are working in complex and high-pressure situations that call for more than literacy and simply mastery of facts or concepts.
Fixed job descriptions are becoming obsolete and employees will now be required to perform functions outside of their former job descriptions. New and agile companies, hatched by the digital economy, have led to a significant shift in recruitment, with hybrid skills taking precedence over academic credentials. In 2015 accountancy firm Ernst & Young announced that it will no longer consider degree results when assessing potential employees. One of the reasons for this change in policy is the firm’s belief that there is no correlation between success at university and success in careers. Such a policy evolution will ‘open up opportunities for talented individuals regardless of their background’.
We have heard a growing outcry on the quality of our artisans (and in other occupations) despite very impressive academic records. This puts in doubt the expected success of the National Artisan Development Strategy of 2030 where it will more likely be a project and numbers game than actual and relevant skills into the labour force.
This begs the question; are we training people for a world that no longer exists? Maybe the problem with our education system is that it is designed to produce ‘Industrial Age worker-citizens’. Unfortunately for this system we are now firmly rooted in a knowledge era and no longer need to memorise that knowledge but to do things with it. Perhaps we are at the inception of the #thesyllabusmustfall movement.
Knowledge is no longer an end in itself but rather a resource which should be used to create new knowledge. Henry Ford did not invent the automobile. Neither did he invent the assembly line. But more than any other single individual, he was responsible for transforming the automobile from an invention of unknown utility into an innovation that profoundly shaped the 20th century and continues to affect our lives even today. Driverless cars are taking this innovation race further.
The bottom line, however, is still 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. This revolution will present these leaders with many opportunities for those with the talent and imagination to capitalize on. If they cannot evolve, they will face increasing trouble. Today, in our volatile and digital world, there is unrecognized risk in not taking risks.