We are on the cusp of a technological revolution that will fundamentally alter the way we live, work, and interact with each other. It is not yet known how it will develop, but in its scale, scope and complexity, the transformation over the next several years will be unlike anything we have experienced before.
There are three key industrial revolutions known to history. The first industrial revolution lasted from the mid-18th century to about year 1830, where the power of water and steam was used to mechanise production. The second, dated between 1870 and 1914, distinguished itself by using electricity to create mass production. The third stage began in the 1970s and used electronics and information technology to automate production. We are now into what experts see as the Fourth Industrial Revolution, which builds on the foundations of the Third, and is labelled the digital revolution, which is characterised mainly by the merging of various technologies.
So, lets deep dive together, what is the Fourth Industrial Revolution or shortly 4IR?
4IR is a rapidly growing automation of traditional and production practices using modern intelligent technologies.
During any industrial revolution, the speed of technological change is significant, creating new opportunities for development and growth. For example, the way macroeconomics develops is a direct result of this process.
Consequently, the economic models we are used to, will be adjusted to stay relevant as 4IR evolves. Naturally, it is difficult to determine the exact vector of macroeconomic development in this case; but it can be assumed based on the analysis and consideration of recent trends in the adoption of new business models.
In the past, selling a product or service required a factory, a distribution center, and a significant workforce. Today these inputs are not deemed to be necessary. Uber and AirBnB are examples of companies that use the principle of changing the definition of value and reducing the perception of physical assets. There are 93 Mn customers using Uber platform in 2022 across 71 countries. It is safe to say that Uber is rapidly replacing the taxi service companies. 300 Mn bookings were made on AirBnB in 2021, making AirBnB the world's largest non-proprietary hosting provider, becoming the favourable option for tourists over traditional hotels.
This economic shift is driven in part by the advent of 4IR, the shift from machine learning and artificial intelligence to analytics, cryptocurrencies, cybersecurity and blockchain development. These technologies are rapidly changing the way companies think about how to develop.
Of course, it is very difficult to characterise the next phases of global economic patterns, but it is quite possible to draw some initial conclusions based on current trends:
- Data and analytics will drive the direction of individual business models. The ability to make the most of data analytics will be key to success as 4IR is implemented.
- The definition of assets will change and affect how we attribute value to organisations, sectors, and individuals.
- Macroeconomic models will move from the priority of traditional production to a focus on relationship productivity and measurable depth of interaction.
Thus, the Fourth Industrial Revolution is a new chapter in human development, made possible by outstanding technological advances. These advances are bridging the physical, digital, and biological worlds to create tremendous vistas. It will undoubtedly cause a shift in the global players and create opportunities for regions such as Africa, which have been deemed uncompetitive for decades. A great example is the digital transformation in Rwanda, known as the Rwanda Digital Acceleration Project, which is a major national project to expand digital adoption and access, enhance digital public service capabilities and increasing Rwanda’s capacity to support digitally enabled innovation and productivity gains.
The Fourth Industrial Revolution is more than just technological change; it is above all an opportunity to help everyone, including leaders, politicians and people from all income groups and countries, use technology to create a people-centered future.