INDUSTRY 4.0: AC/BC

In the preface to his latest book, COVID-19: The Great Reset, Klaus Schwab reflects on COVID-19, describing the first call from Beijing as:

“An AC/BC moment, when attention shifted from the time before COVID-19 to the reality that set in after COVID-19." The World Economic Forum founder had identified an inflection point - AC/BC - after COVID, before COVID:



"One thing has changed in the interim period between “BC” and “AC” … a greater understanding among the population, business leaders, and government that creating a better world would require working together." The BC era Five years earlier in December 2015, Schwab wrote an article in Foreign Affairs. Called The Fourth Industrial Revolution, What It Means and How to Respond, it argued: “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.” Past and present, Professor Schwab identified:

  • The First Industrial Revolution: Fuelled by water and steam power to mechanize production.

  • The Second: Driven by electric power to affect mass production.

  • The Third: Leveraging electronics and information technology to automate production.

  • The Fourth Industrial Revolution: Building on the Third, driven by a fusion of technologies blurring the lines between the physical, digital and biological.

The article continued: “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. “…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. “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." Industry 4.0 didn't arrive in a vacuum, fully formed. It was shaped by the environmental, social and governmental megatrends already in existence. Three months earlier in September 2015, for example, the United Nations agreed the Sustainable Development Goals (SDGs), a plan for creating a better world by 2030. Designed to replace the Millennium Development Goals set to expire in 2015, the SDGs were 17 strategic imperatives agreed by all UN member states for ending poverty, preserving the planet and ensuring every person enjoys peace and prosperity. Between AC/BC COVID-19 highlighted the underlying megatrends of Industry 4.0, accelerating the acceleration Schwab described in Foreign Affairs five years before. The pandemic highlighted the downsides too. The economists Erik Brynjolfsson and Andrew McAfee predicted Industry 4.0 could yield greater inequality, most notably via the potential to disrupt labor markets:

  • Cheap labor and owners of capital are being squeezed by automation.

  • Revolution 4.0 will favor people with ideas - those who can innovate and create new products, services and business models.

  • People with ideas will be the scarcest resource.

  • Talent, more than capital, will therefore be the critical factor of production.

COVID-19 tested these predictions almost to destruction, accentuating the already mixed SDG progress. In the words of António Guterres, the UN Secretary-General, the pandemic “exposed and exacerbated existing inequalities and injustices", reflecting in his annual SDG update that: “Before the COVID-19 pandemic, progress remained uneven and we were not on track to meet the Goals by 2030." Drilling down further, the UN Department of Economic and Social Affairs found that COVID-19 had caused:

  • Pressure on SDG Goal 2, via a rise in food insecurity, with 2 billion people facing moderate or severe food insecurity and 132 million left undernourished

  • Likely failure in Goal 3 due to overwhelmed health systems, plus a global maternal mortality ratio still half the rate needed to reduce the target for maternal deaths by 2030.

  • Pressure on Goal 4, due to 90% of students taking classes remotely or not at all, with the pandemic's school closures causing 370 million children lost out on school meals.

  • Goal 5 compromised by some countries seeing a 30% increase in domestic violence.

  • Pressure on Goals 1, 8, and 9 due to 114 million people losing their jobs and 120 million pushed back into extreme poverty.

The AC era The pandemic proved a lost decade for development. So, what now? Liu Zhenmin, UN Under-Secretary-General for the Department of Economic and Social Affairs, has explained: “To rebuild better, both the public and private sectors must invest in human capital, social protection, and sustainable infrastructure and technology.” 'Sustainable infrastructure and technology' - we're back to Industry 4.0, with an AC twist. At 22i, we deliver real-time AI for a smarter, safer world - our contribution to Industry 4.0 and build back better. At the same time, we haven’t lost sight of what it means to be human. Our values aren’t secret - our core belief remains: “AI must work for people and planet - offering answers to the perennial problems.” As Industry 4.0 unfolds in the AC era, people will always be central to what we do. For us, it's about human-centered systems change via a fundamental rethink of the triple bottom line. Ultimately, Revolution 4.0 and COVID-19 have primed us for what comes next. Society 5.1.

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