This week Davos, Switzerland once again becomes the centre of the world, or should we say centre of the future, as world leaders come together at the World Economic Forum Annual Meeting. This year’s topic ‘Globalisation 4.0: Shaping a global architecture in the age of the Fourth Industrial Revolution’ sparks a crucial dialogue to prepare our society and infrastructure for a future full of change and uncertainties. One of the major drivers of change today is the Fourth Industrial Revolution (4IR) or Industry 4.0, which many expect has a stronger impact on the world than the change brought on by the first industrial revolution. The integrated developments driven by Industry 4.0 are shaping a new era of globalisation and raise many questions on the impact of such developments on society. Some might argue that globalisation (especially in the era of industry 4.0) is the biggest enemy of our time. The spike in income inequality, damaging pollution to our planet and machines substituting human labour are just some of the negative effects it carries. Globalisation however tends to be confused with globalism – ideology supporting a neoliberal global order versus national interest- which is the real cause of dissatisfaction, frustration and insecurity especially in western society: not globalisation per se. Similarly, income inequality is rooted in our institutions and governance, which have privileged capital owners allowing them a progressively larger share of GDP. While it is true that industrial revolutions typically change the landscape of the labour market because of the impact of innovation. This should not however lead to mass unemployment. History tells us that new inventions often create more opportunities and with that jobs. Many of us work in jobs today which didn’t exist back when we were teenagers. I believe the issue people worry about most is not a rise in unemployment caused by Industry 4.0, it is the jobs that are disrupted by new technology and the direct impact that will have on their lives and local communities. On the other hand, the labour market has become more polarised. A skilled elite group of people who can use technology to be more productive, tend to replace the labour of others and are paid accordingly, substantially resulting in income inequality. Nevertheless, these side-effects are just transitional and not of large scale, while significant impact can be generated by poor leadership from government, corporations and academia. In fact, job polarisation can be fought by proactively addressing the skill gap in the market. By studying tasks and jobs it is be possible to understand which ones are easy to automate, thus at risk of becoming unnecessary. On the other side, if individual skills of such workforce are also analysed, it should be possible to identify how else these workers would be more likely to succeed, and then to get them educated in those skills. Innovative technology can lead to better policy-making, more sustainable business models, new jobs and income opportunities. For these outcomes to be more equal to all members of society, more and better collaboration among all of us is required. Solving some of the most pressing issues of our time can only be done if the private sector, academia and government – starting from the city level, to national and then international – are able to adapt to change and work together towards a common greater goal. Significant changes would need to happen within infrastructure, education, regulation and governance. Clearly, this will require courage, strong leadership and entrepreneurship from all parties involved and need to work across the geographic levels. At the end of the day, our future will be defined by the decisions we make today. I don’t have the answers to solving some of the crucial questions raised by WEF this week. I do know that all of us in the business community, especially as advisors to businesses in our own communities, have a responsibility to leave behind a better world for the next generation – regardless of what our personal view on that is. What are your views on the transformative effect Industry 4.0 has on your community and society at large? Join the conversation on Twitter using #HLBCommunities
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