Anticipating the Next Industrial Revolution

Last week Nudge Factory were at the House of Commons for the launch of a paper on the Fourth Industrial Revolution (4IR) authored by Alan Mak – the Member of Parliament for Havant – and released by the Free Enterprise Group. Masters of the Revolution: Why the Fourth Industrial Revolution should be at the heart of Britain’s new Industrial Strategy sets out the need for the UK to embrace the next revolutionary stage in industry and the emergence of advanced digital technology, artificial intelligence, and cyber-physical systems to harness them for the benefit future economic growth and societal changes.

This follows previous industrial revolutions of water and steam power in the 1700s; electricity in the 1800s; and the rise of electronics and computing in the 1970s. All of which acted as a huge catalyst for global connectivity, creation, and growth. The beginnings of the 4IR can been already be seen at the micro level from driverless cars to drones. The UK is already home to some of the most successful and well-known companies that are pushing the boundaries of technology. DeepMind, founded in London and later acquired by Google, developer of advanced Machine Learning programs, and this year the first ever to beat a human at the board game Go, is based in Kings Cross. In a show of confidence in the UK’s reputation for science and technology, Google announced last week that is was pressing on with its plan for a massive new HQ in London, to double the number of its staff based here.

The report contains twenty recommendations to the Government for placing the 4IR at the epicentre of their Industrial Strategy and ensuring our business, economical, and political structures can adapt do the revolution. These recommendations include:

  • Moving away from the European Union’s ‘over-reliance’ on the precautionary principle as a pro-innovation approach
  • Support for lifelong learning and continued investment in adult education
  • A review into how well the education system is preparing Britain for the 4IR
  • A fast-tracked visa system for those highly skilled in the science and technology areas
  • Dedicated regional investment for 4IR businesses to stimulate growth outside of London and the South East

Whilst the report calls on Government to embrace the 4IR, it predicts that there won’t be positive changes for all, at least not in the short term. Advances in Artificial Intelligence could mean Britain experiencing a dramatic realignment in the labour market, with automation pushing those in mid-skill / mid-wage roles out of employment, especially in areas such as retail, customer service, and administration. The older and lower-income demographic groups will also be affected as they will find it harder to re-train and enter a new industry. In the US it is estimated that 47% of jobs are at high risk from automation in the next 20 years, and it is possible that a similar percentage would be at risk in the UK. All of this combined will, the report suggests, result in further widening of the gap in inequality and wealth.

The report does say however that the UK should be able to adapt and bounce-back from the likely initial economic downturn, rise in unemployment and inequality, but that it will be more of a process than a snap. Being prepared is a key factor in determining how long any negatives remain, and how quickly we can re-skill and re-employ the workforce.

Revolutions don’t happen overnight, but the 4IR is coming whether the Government prepares for it or not. Whether it plays out the way as imagined in the report remains to be seen, but clearly there needs to be some planning based on the possible scenarios Mak explores.

It will be interesting to see whether any of the recommendations included in this report are reflected in tomorrow’s Autumn Statement, and the Government’s much-vaunted Industrial Strategy, which we should see in draft next year. Because if history teaches us anything, it is that governments usually tend to react to changes far too late!

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