The Fourth Industrial Revolution- The need for a full social and economic strategy to thrive in an age of accelerations.

At the Labour conference the Shadow Business Secretary, Rebecca Long-Bailey, announced a review into the effects of automation and disruption on our future economy.

What made this interesting is that in her speech she mentioned the “Fourth Industrial Revolution” which is the title of a book written by Klaus Schwab, founder and executive chairman of the World Economic Forum.

In his book Schwab argues that the Fourth Industrial Revolution we are entering is fundamentally different from previous ones because it is characterised by a range of new technologies that are fusing the physical, digital and biological worlds and impacting all disciplines, economies and industries simultaneously. Driven by the exponential increase in computing power, we are on the cusp of a period of great promise but also great peril.

I’m going to avoid speculating on how the future could look due to this dizzying rate of advancement. You may believe that automation will lead to mass unemployment or you may be of the opinion that the economy will diversify enough as it has done during previous eras of change. But it would be difficult to argue against a need to better formulate government policy to ensure we are able to deal with the challenges.

In his book ‘Thank You for Being Late- An Optimists Guide to Thriving in an Age of Accelerations’, Thomas Friedman quotes Eric “Astro” Teller, CEO of Google’s X research and development lab:

“Our societal structures are failing to keep pace with the rate of change, everything feels like it’s in constant catch-up mode. What to do? We certainly don’t want to slow down technological progress or abandon regulation. The only adequate response is that we try to increase our society’s ability to adapt. That is the only way to release us from the society-wide anxiety around tech. We can either push back against technological advances or we can acknowledge that humanity has a new challenge: we must rewire our societal tools and institutions so that they will enable us to keep pace.” 

We have already been looking at key policies on this issue, in Layla Moran’s speech to conference she spoke of life-long learning which is vital in an age of accelerations. We also discussed policy around the ‘gig economy’ which will increasingly be driven by disruptive tech companies like Uber and Deliveroo.

My concern is that there is a lack of emphasis on a longer term strategy by all parties, particularly on the potential social impacts due to an underestimation of the sheer scale and breadth of change we are entering.

The Liberal Democrats need to formulate a full strategy for the Fourth Industrial Revolution, not just through the lens of economic policy but also looking at ways to harness the potentially revolutionary social benefits, with some radical ideas like shorter working weeks, examining how we measure growth, and a universal basic income.

* Darren Martin is the Press and Social Media Officer for the Hackney Lib Dems. He is a council candidate for next year's local elections.

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18 Comments

  • Peter Martin 2nd Oct '17 - 9:30am

    “I’m going to avoid speculating on how the future could look due to this dizzying rate of advancement.”

    It will look exactly how we want it to look and do make it look. Just about everything has a potential for harm and, alternatively, for human benefit. If we decide to “leave it all to the workings of the free market (so-called) ” we’ll end up in real trouble!

  • `I’m going to avoid speculating on how the future could look due to this dizzying rate of advancement. You may believe that automation will lead to mass unemployment or you may be of the opinion that the economy will diversify enough as it has done during previous eras of change. But it would be difficult to argue against a need to better formulate government policy to ensure we are able to deal with the challenges.`

    Isn’t the best way to believe that it will lead to mass unemployment and to have policies to that effect ie planned migration and not mass migration? If you do that you can then bring people in in a planned way and not have people at the behest of the big corporates often tax registered in Luxembourg or elsewhere?

  • One of the many criticisms I have of economists is that they assume the world to be one economic system about which they can play their cereberal games.
    It is not. It is 193 separate countries each playing their own cards to give their citizens a place in the sun.
    On our current performance Britain won’t be included in the Fourth Industrial Revolution at all. We will be the victims of it.
    The societal consequences won’t be long days on the golf course followed by cocktails. It will be the grinding unemployment of the Favellas and scraping food from dustbins.
    Don’t believe me? The nation’s credit rating went down another notch recently. Was there a national outcry? Of course not, we have become a nation of ostriches clinging to such piffle as this op-ed.

  • paul barker 2nd Oct '17 - 11:01am

    A lot of this sounds like trendy waffle to me, tasty but not nutrituous.
    There was/is One Industrial Revolution. still spreading to new territories. You can tell it was/is different from either pre-industrial or Industrial Economies because of the growth rates, typically peaking at more than 10%, as against the 2 to 2.5% usual for Mature Industrial Societies. There is no evidence of any 2nd or 3rd Industrial Revolutions.
    Adapting to new technologies is just normal for Mature Economies & demands a Political response of continuous Reform.

  • Darren Martin 2nd Oct '17 - 11:16am

    @Palehouse, it is inescapable that those 193 countries are interconnected by a global economy. That is why Nationalism and isolationism that we are seeing is not only damaging but actually futile.
    Whether economists can do anything meaningful to change it or make it better I suppose has been argued for as long as the profession has existed, although I argue for not just an economic strategy but a social one also and would say it is clear that there are economic levers will pull that clearly make a difference.
    I would say the picture of the future you paint is a good reason to formulate a meaningful strategy.

  • Darren Martin 2nd Oct '17 - 11:42am

    @Paul Barker, I have read good arguments that there are not separate revolutions but different phases in change, but what is the difference? Regardless of whether you see it as a separate ‘revolution’ or a different phase, it is still a period of change definably different from the last.
    Your point about it being normal to adapt is the point of my article, 1. Because we are struggling to adapt to the disruption already (think Uber) and 2. Because the rate and scope of change is different than previous eras due to how it is affecting all industries simultaneously.
    So I argue that this underestimation is already causing us issues and will only get worse unless we address it.

  • Peter Martin 2nd Oct '17 - 1:55pm

    @ Darren,

    Nationalism and isolationism that we are seeing is not only damaging but actually futile.

    Is it? The vote for independence in Catalonia was a manifestation of nationalism. The SNP, which for a long time was more progressive than the Labour Party has the word National in its title.

    We shouldn’t give up on the Nation State. There’s really no evidence that a supra large integrated Pan-European State, which is where the EU is heading for, is likely to be any better, or more democratic, than an alliance of smaller free-trading States. There is very little support for the concept right throughout the EU.

    Despite the ravages of neoliberalism, the state still contains resources for democratic control of a nation’s economy and finances. The populist turn that we’ve seen in recent years can provide an opening to develop an ambitious but feasible left political strategy.

    https://www.amazon.co.uk/Reclaiming-State-Progressive-Sovereignty-Post-Neoliberal/dp/0745337325/ref=sr_1_1?ie=UTF8&qid=1506948309&sr=8-1&keywords=reclaiming+the+state

  • Darren Martin 2nd Oct '17 - 2:40pm

    @Peter Martin where did I say that we should give up on nation states or that we should form a super state?
    I simply pointed out the fact that nation states operate within a globalised economy and that policy that seeks to avoid this is futile.
    It is possible to maintain sovereignty whilst intergrating global markets, but we need a better strategy to better protect our societies from the disruption.

  • Darren,
    Nation states will act in their own best interests, and they don’t care if that is futile, damaging, inefficient or whatever.
    I yearn for the day when all these brilliant economists take their brains down from the clouds and deploy them wholly, solely, selfishly and nationalistically for the benefit of us, the British, and, more importantly our grandchildren.
    You might want to solve the world’s problems but they haven’t asked you to. Your fellow countrymen have.

  • Peter Martin 2nd Oct '17 - 3:25pm

    @ Darren,

    If you didn’t say that the EU should form a super state then you perhaps should have. To survive it has to become that, ie the USE, or turn the clock back to being the EEC. The EU is an unworkable in-between failed experiment.

    I should have said that a Nation State shouldn’t be too isolationist. Much less isolationist than the EU! It should manage the process of globalisation in the interests of its citizens and not the big corporations.

  • @ Palehourse “Nation states will act in their own best interests, and they don’t care if that is futile, damaging, inefficient or whatever. ”

    A bit over dramatic and broad brush – but no doubt you enjoyed writing it.

    Depends on who’s pulling the levers of power in which particular nation state.

  • David,
    I don’t enjoy being the sole Jeremiah (who predicted the destruction of Jerusalem, but was ignored).
    It’s clear that the British only want good news and any attempt to point out the disastrous legacy we are sure to bequeath our grandchildren is so unpopular that politicians, the media and pretty much everyone round here won’t do it.
    As to the global economy, it’s a myth. It should be viewed as 193 separate ones which sometimes compromise, cooperate and trade but have no sense of altruism and are always in competition. And we have lost the appetite to compete and now have retreated into thinking up excuses as to why being successful is undignified, nationalistic, ‘small-island’ and definitely ‘un-British’.

  • @Peter Martin – “It should manage the process of globalisation in the interests of its citizens and not the big corporations”
    and
    @David Raw – “Depends on who’s pulling the levers of power in which particular nation state”

    Exactly, and there’s the problem. When you look at the UK’s high levels of inequality, the huge disparities in GDP across the country (or even just London vs everywhere else), the way that British industry and infrastructure has been sold off to foreign investors, multinationals manipulating the tax system, and the inflated London property market pricing people out of the communities they were born into whilst providing a haven for offshore money laundering, you might reasonably assume that the British flavour of the Nation State is a failure.

    What is the point of a Nation State if it can’t make a reasonable effort to ensure that the benefits of globalisation are somewhat evenly distributed within it’s borders?

  • Nick,
    Absolutely correct. The people are crying out for political leaders who will reform Britain and fight for it and not give it away.

  • Little Jackie Paper 2nd Oct '17 - 10:46pm

    Nick Baird – ‘or even just London vs everywhere else’ There’s a lot of skint people in London, Nick.

    ‘What is the point of a Nation State if it can’t make a reasonable effort to ensure that the benefits of globalisation are somewhat evenly distributed within it’s borders?’

    One could equally ask what it the point of a European Union that doesn’t appear to be doing much on that front.

    More generally, I keep hearing lines like that bandied around the internet but, frankly, I’m starting to think it’s just cant. OK, not getting at you, how would you ‘evenly distribute’ the benefits of things inherent in globalisation like asymmetric migration? Or wage arbitrage? By that I don’t mean motherhood and apple pie stuff like, ‘more skills.’ I mean actual, hard action. How exactly do you have the globalisation allocated nicely, just with no downside from the foreign investors/sell-offs and multinationals you mention? Surely they are globalisation in action?

    The answer is that you don’t in a corporatist world. Globalisation is politics as usual, in the sense of power relations. We’ve basically sold London in the name of the globalised corporatist world.

    I suggest a reading of this fantastic article, which nails it – http://www.theamericanconservative.com/articles/revolt-of-the-rich/comment-page-1/

    ‘The objective of the predatory super-rich and their political handmaidens is to discredit and destroy the traditional nation state and auction its resources to themselves. Those super-rich, in turn, aim to create a “tollbooth” economy, whereby more and more of our highways, bridges, libraries, parks, and beaches are possessed by private oligarchs who will extract a toll from the rest of us.’

    This is a question of power relations, no more no less. And yet some people will say it’s all completely neutral and domestic factors are all to blame.

  • Jackie,
    I’m afraid it doesn’t nail it and the paragraph you quote emphasises the point I make.
    The economist who penned those words implies it is a global phenomenon.
    No it’s not. It’s a feature of failing economies. That situation is not happening in Germany or China.
    We are blinding ourselves to our national crisis by this “Oh well, it’s the same everywhere”.
    That’s a self consoling fantasy and a classic defence mechanism.

  • Chris Lewcock 3rd Oct '17 - 12:53pm

    Education. education. education

  • Darren – so glad to see that others are also uttering what has been in my mind for sometime.
    All of the parties are tinkering with the issue – the Taylor Review was a case in point – rather than thinking in the connected and “radical” (for want of a better word) way that is going to be required.
    The British economy has not managed the impact of globalisation as well as, say, Germany, but the instinct to follow their path is flawed. We have a highly flexible economy that *could* make us better able to rise to the challenges that will be faced in the future, if we are willing to take the necessary risks. It’s time for some bold thinking, and we are the party to do it.

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