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Technology Updated: 22 Aug 2017

On the cusp of the fourth industrial revolution

Experts believe that we are close to a tipping point that will change the way people produce, consume and relate with each other.

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In 2011 an initiative led by companies, politicians and academics urged the German economy to prepare for what is just around the corner. Known as Industry 4.0, the initiative was backed by the government and aims to ready the nation to compete in the market of the future, by harnessing a “high-tech strategy”. According to an Accenture report, global investment in the Internet of Things alone is set to reach 500 billion dollars (431 billion euros) in 2020. That is a 2,400% increase against 2012. Investment in Germany is set to triple by 2020.

But what is Germany preparing itself for? The answer is new methods for production, consumption and interpersonal relationships, all driven by the breakneck speed of technological progress over the last few decades. This change has been called the fourth industrial revolution, among others by Klaus Schwab, founder and chairman of the World Economic Forum.

The first industrial revolution, the most studied and well documented to date, ushered in mechanical production using steam technology in the late 18th Century. The second changed the world a century later via the harnessing of electricity, the division of labor and mass production. The third, driven by the rise of electronics and the boom in information technology, drove automated production around 1969.

Nobody knows what exactly the future holds, but the fourth industrial revolution looks certain to be based on cyber-physical systems (CPS). These systems incorporate physical, digital and human elements in a convergence of almost unlimited potential. These systems will have their roots in three key aspects. The first is the rise of the so-called technosphere. Inherited from the third industrial revolution, it is clear that software really is "eating the world", as predicted by Marc Andreesen, transcending its original function as a useful tool.

The second is the Internet of Things technology, which limits human intervention in communication between devices to the realms of maintenance. The third, and no less important, is the culmination of a process triggered by the third industrial revolution, which will see our bodies merge with technology and subsequently adapt to the same.

According to Schwab, said tipping point will raise the question of how we should approach the future. The chairman of the World Economic Forum is urging the world to answer this question now. The differences between this revolution and those of the past are essentially down to the breakneck pace of technological development over the last few decades.

This is why the periods between the so-called revolutions have shortened, and why the coming revolution will not be contingent on a single product or service, and nor will it be related exclusively with one specific area. Schwab believes that this industrial revolution will shake the labor market, particularly for the most highly qualified positions, as well as business and economies, via the rise of fintech and complete restructuring of business models. Governments will also have to keep up with innovation, which is likely to outpace current power structures. All this opens a panorama of infinite possibilities, which will determine whether humans cease to use fossil fuels and whether we will be replaced or empowered by technology.

In short, a new world is waiting just around the corner. And it's not just the experts who think so, with the issue set to be a central topic at the next Davos forum. Public opinion is also in agreement. 75% of those polled in The Future of Software & Society survey believe that in 10 years' time technology could be sufficiently widespread to produce cars and transplantable livers using 3D printers, as well as to allow for cell phone implants and completely robotized pharmacies and doctors.