It was in these Swiss mountains that the
world was first introduced to the phrase
the “Fourth Industrial Revolution,"
and it’s been a hot topic
among academics, politicians and business leaders
ever since. But what exactly does it mean?
The term “Fourth Industrial Revolution” was coined
by the founder of the World Economic Forum,
a former professor
named Klaus Schwab.
Schwab wrote a book with that title
to describe an era marked by a:
Let’s break that down.
Technologies like artificial intelligence,
autonomous vehicles or the Internet of Things
are becoming ingrained in our day-to-day
lives, and even our bodies.
Think of voice-activated virtual assistants,
face ID recognition or healthcare sensors.
Schwab first presented his vision
of the Fourth Industrial Revolution
at the World Economic Forum’s annual
meeting here in Davos in 2016.
But to understand the idea, we need to go much further
back in history to industrial revolution number one.
The First Industrial Revolution started
in Great Britain around 1760
and spread to Europe and North
America through the early 1800s.
It was powered by a major
invention, the steam engine.
The result?
New manufacturing processes, the creation
of factories and a booming textiles industry.
From the late 1800s, the Second Industrial
Revolution was marked by mass production
and new industries like
steel, oil and electricity.
The light bulb, the telephone and internal combustion
engine were a few of the major inventions of this era.
The Third Industrial Revolution, sometimes
known as the Digital Revolution,
occurred in the second half
of the twentieth century.
In just a few decades we saw the invention of the
semiconductor, the personal computer and the internet.
So what separates the Fourth
Industrial Revolution from the Third?
Experts say the main difference is that technology
is merging more and more with humans’ lives
and that technological change
is happening faster than ever.
Consider this: It took 75 years for 100
million users to adopt the telephone.
Instagram signed up 100 million users in just two years,
while Pokemon Go caught that amount in one month.
3D printing is just one example of fast-paced
technology in the Fourth Industrial Revolution.
The industry has gone from a business idea
to big business, with 3D printer shipments
expected to increase from just under
200,000 in 2015 to 2.4 million in 2020.
Today, you can have a hip replacement from a
3D-printed bone or use a 3D-printed bionic arm.
Talk about blurring the line between
humans and technology, right?
This new era of technology
is driving a lot of innovation.
You can see in this chart the number of patents
related to the Fourth Industrial Revolution,
for things like 3D printing or AI, has been
climbing up and up since early 2000.
Organizations are embracing new technologies
to make their businesses more efficient,
similar to how they embraced the steam engine
during the First Industrial Revolution.
But some companies, and governments, are struggling
to keep up with the fast pace of technological change.
Research shows innovators, investors and
shareholders benefit the most from innovation.
The risk is that the Fourth Industrial
Revolution is making inequality,
which is already a
big issue, even worse.
One study found billionaires
have driven almost 80 percent
of the 40 main breakthrough
innovations over the last 40 years.
That’s a problem when the richest
one percent of households
already own nearly half
of the world’s wealth.
Experts warn we are in a “winner-takes-all” economy,
where high-skilled workers are rewarded with high pay,
and the rest of
workers are left out.
Studies confirm technologies
like AI will eliminate some jobs
and create demand for new skills
that many workers don’t have.
Privacy concerns are another issue
as the Fourth Industrial Revolution
turns every company
into a tech company.
Industries from food to retail
to banking are going digital,
and they’re collecting a lot more data
from their customers along the way.
Users are starting to worry that companies
know too much about their private digital lives.
The World Economic Forum says a majority
of leaders don’t have confidence
their organizations are ready for the changes
associated with the Fourth Industrial Revolution.
With tech changing fast every
day - it’s time to catch up.
Hey everyone, Elizabeth
here in Davos, Switzerland.
Be sure to check out our other
CNBC Explains videos over here.
And leave us any other ideas in the
comments section. See you later!
