Fourth industrial revolution is the flavor of today’s annual meeting at the World Economic Forum. Davos is a bustle of excitement as the leaders from all over the world are taking turns to address the guests on various topics. Andhra Pradesh gets a special honor at the meeting, being the only state in the world that is being represented along with other countries.
It is well known that World Economic Forum is working closely on evaluating the new state on the global competitiveness index – which is usually applied for countries in totality. Chief Minister Sri N Chandrababu Naidu is presently representing the state at the forum.
Going by the publication of Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, let us understand what the fourth industrial revolution is and how it connects in totality with the best interests of Andhra Pradesh.
Let us go back and understand what the first, second and third industrial revolution were.
The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production, and the third used electronics and information technology to automate production.
Now, a Fourth Industrial Revolution is building on the Third one. A digital revolution that has been occurring since the middle of the last century.
Simply put, fourth industrial revolution is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
Challenges and Opportunities – Andhra Pradesh
Interestingly, there will be a plausible connect between what the revolution talks about and how it directly impacts Andhra. AP will and always be a technologically advanced state, thanks to the leader. Mr Naidu’s constant Mantra for enhanced technology and application of advancement in daily lives is well known. The fourth industrial revolution talks about the same, precisely. Entry of technology that improves and eases the lives in a set demographic.
From the Schwab’s journal, 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.
All these apply in relevance to the new state of Andhra Pradesh. Introduction of ‘E’ mechanism, technology in every sphere of life is already on its way, reaching out to the nook and corner of the state.
Challenges – Automation poses a threat to human workforce
Predictably so, complete automation of human lives means technology taking over every possible job that is done by a human hand. Economists Erik Brynjolfsson and Andrew McAfee have pointed out that the revolution could yield greater inequality, particularly in its potential to disrupt labor markets.
As automation substitutes for labor across the entire state, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor, says Schwab. 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.
The impact on business – Revolution will accelerate the influx of business for the new state
Schwab shares the underlying theme in his conversations with global CEOs and senior business executives. The theme 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.
When we take the application of the revolution across all industries, there is clear evidence that the technologies that underpin the Fourth Industrial Revolution will have a major impact on businesses.
On the supply side, many industries across the world are seeing introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. Disruption is also seen flowing from innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, are equipped to oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.
AP’s ease of doing business puts it on the front league, with adequate resources, technology, and market pitch and the reach out to the global investors. The first step to this was already acquired at the recently hosted CII Partnership Summit, where the traction was evaluated to be worth above 4 Lakh Crore rupees. The challenge, however rests in the way the state balances the advent of technology with manpower in order to sustain effective economic dynamics.
Schwab states that the 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.
There are four main effects that the Fourth Industrial Revolution has on business
- Customer expectations
- Product enhancement
- Collaborative innovation
- Organizational forms.
The inexorable shift from simple digitization in the Third Industrial Revolution to innovation based on combinations of technologies in the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business.
Business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate. The Chief Minister of Andhra Pradesh, Sri N Chandrababu Naidu is already on his way, working up the specs.
The impact on AP State Government
Governments across the world will gain new technological powers to increase their control over populations, based on pervasive surveillance systems and the ability to control digital infrastructure. However, there is also an increasing face pressure to change the current approach to public engagement and policymaking, as the central role of conducting policy diminishes owing to new sources of competition and the redistribution and decentralization of power that new technologies make possible.
AP State government is comfortably placed in its position of understanding the changing scenarios and adapting to the newer methods of administration and policy making. This will greatly benefit the state in making the much needed reforms, thereby impacting the progress.
The impact on people – Advancement in store for the new state
The Fourth Industrial Revolution will change not only what the state does but also its identity. Notions of ownership, consumption patterns, time devoted to work and leisure, and how people develop careers, cultivate skills, meet people, and nurture relationships.
The new state of Andhra is already making a quantum leap in the matter. Newer collaborations, businesses, plans that scale towards development of the skilled manpower within the state, and a modernised futuristic approach; all these actually see AP complying with the best practices of the fourth industrial revolution.
Shaping the future
Schwab states that 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 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.