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Klaus Schwab’s The Fourth Industrial Revolution: the bottom line

Technology is a very trendy topic these days, but most people just have no clue and just go for chit-chat. If you are reading this page though, chances are that you are trying to do better than just chit-chat. The problem is to know where to start.

Now, the good news is, there are plenty of books to learn about new technologies and their impact on our societies. And The Fourth Industrial Revolution by Klaus Schwab (World Economic Forum Founder) is absolutely one of them. Simply put, The Fourth Industrial Revolution will give you very serious food for thought on the topic. Long stuff short, Schwab sees a real fourth industrial revolution out there, and he explains what is about to happen.

His tone is not alarmist, it is forward thinking, constructive and exciting. Because Schwab is a thought-leader who wants to educate. Nice, right? If you want to read smart and think smart, that book has to be on your must-read book list!

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Book Suggestion & Review: The Fourth Industrial Revolution – Klaus Schwab.

I got interested in technology-related topics because the topic relates to my work. So? I picked a pile of books on the matter. I’m still not through that pile yet. Having read most of them, I’m excited to write that The Fourth Industrial Revolution by Klaus Schwab is fascinating.

This book provides the views, concerns, and hopes of a constructive expert on new technologies. In fact, its 185 pages (Paperback version) were amongst the most inspiring pages I’ve read. The point is worth noting because all books on new technologies are not that positive…

More on this below. Keep reading!

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Schwab’s Fourth Industrial Revolution: a brief book review (for starters).

Let’s move on to the book review… The Fourth Industrial Revolution is a small book for those interested in the big picture on innovation.

First things first, Klaus Schwab is the Founder and Executive Chairman of the World Economic Forum, a global organization which promotes public-private cooperation across nations. In sum, Klaus Schwab is one of today’s most influential thought-leaders. His actions, writing and thinking aim at educating people to make the most of the world.

The book discusses technological developments and their consequences on the future of society. The author asks essential and existential questions. He pushes the reader to think (and think again) about various topics which I will mention below. In short, this is what I expect from a thought-leader and from a thought-leadership book.

There are two types of groups when it comes to innovation and technology. The super positives, and the scared. This book is on the positive side for sure. It is very complete, forward-thinking, and challenging. In fact, it is a must-read book, by an absolute thought-leader that you need to know about if you are serious about the topic. Now, let me explain why.

The style is great. The Fourth Industrial Revolution is instructive, very easy to read and thought-provoking. Let’s face it, thoughtful books tend to be complex. But this one isn’t. It is very accessible and won’t require a PhD in robotics engineering. In fact, because Klaus Schwab is an innovation enthusiast, the book is a page-turner.

Now, I’m getting into the details with a much more comprehensive book review below (keep reading!), but to finish the brief overview here is what the book is about:

 

Schwab’s Fourth Industrial Revolution: the comprehensive book review

The Fourth Industrial Revolution makes readers think about an unprecedented revolution “unlike anything humankind had previously experienced”. The author provides a lot of food for thought on the matter. He describes many developments characterized by a high level of complexity and interconnectedness. He insists, however, that these can bring progress as well as ‘profound uncertainty’.

The book in bullet points

Klaus Schwab explores these major themes:

• Technological Innovation Drivers
• Machine Intelligence, Machine Learning, Artificial Intelligence
• Global Governance

Schwab then asks a series of important questions throughout the book:

• Can this industrial revolution represent a peril? Could it impact our entire system?
• Can it change who we are?
• Are the frameworks for coordinating the development and diffusion of technological innovation adequate?
• Are ‘platforms’ creating excessive power concentrations?
• Is ownership still relevant? What is worth owning nowadays?
• To what extent are we allowed to “edit” genetics and biology?
• Are machines going to replace workers?
• Could social skills gain in importance? Are companies able to cope with these developments?
• Could the role of governments shift?
• Will they be harmed in the process?
• Could societies need to re-think themselves?
• Will individuals know who they are?
• Would Artificial Intelligence remain under control?

Curious to find out about what the book has to say? Keep reading!

The Fourth Industrial Revolution – Theme #1:  the revolution.

The Fourth Industrial Revolution turns around three chapters. One chapter, one discussion.

The first part of the book gives an overview of the fourth industrial revolution, as Schwab sees it. Simply put? Steam generated the first industrial revolution with railroads and industrial scale production. Electricity led to the second revolution. The third industrial revolution took place in the 1960’s with the creation of the first computing instruments. The internet, globalization and production offshoring trends opened another way. Yet, the fourth industrial revolution comes with disruptive technologies as we see them nowadays.

So? The whole thing is only beginning. Yet, while the first revolution spread over 130 years, the fourth might reshuffle the cards in a decade.

Lots of questions to come …

This obviously brings up many questions.

One essential question for Schwab lies in frameworks. In Schwab’s words, institutional frameworks at the national and global levels must ‘govern the diffusion of innovation and mitigate the disruption is inadequate at best and, at worst, absent altogether’. We’ll get back to this later. Keep reading!

Another question is: can we cope with automation trends that flow from innovation? What is the manual workforce going to become? Schwab talks about a productive revolution here. He discusses the idea that technology is nowadays creating wealth with far less manpower and at a much more marginal cost. On this point, The Rise of the Robots by Martin Ford is actually another must-read (follow the link to read my book review).

A third question comes as follows. How to get stakeholders together to reach a common ‘narrative’ or position on what ought to happen? The revolution will benefit the consumer, but a challenge remains. With the increasing importance of web platforms (AirBnB, Uber, Alibaba, etc.), a concentration of powers is taking place! So, how to avoid new inequalities between innovators, investors, shareholders, users and workers? Schwab calls this the “platform effect”, and the issue deserves attention.

Not whether, but when!

Overall, the challenge is no longer to find out whether disruption will occur. It is to figure out when it will occur and how it will affect future society and business models. As a thought-leader, Schwab accordingly suggests that ‘it is our responsibility to ensure that we establish a set of common values to drive policy choices and to enact the chances that will make the fourth industrial revolution and opportunity for all’…

The Fourth Industrial Revolution – Theme #2:  Transformations.

Chapter 2 discusses the main transformations that are likely to occur by looking at their main drivers of the fourth industrial revolution.

The main driver is …

The main driver of the fourth revolution is the ability to ‘leverage’ the potential of information technologies. In more simple terms? The revolution takes place because we increasingly master the potential of new technologies.

Schwab points at various ‘megatrends’ related to digital, physical & biological developments. He discusses the impact of the Blockchain technologies, for instance.

He considers the pros and cons of the trend. On the one hand, the Blockchain will increase trust in modern transactions. As a matter of fact, if you are interested in the Blockchain topic, see my review of William Mougayar’s book on The Business Blockchain as well as my book review of Don and Alex Tapscott’s Blockchain Revolution.

Back to The Fourth Industrial Revolution, though, Schwab also points to the technology’s ability to reshuffle the cards.

Simply put? With platforms giving you access to cars you don’t own, flat’s you don’t own either, and shops you don’t need to visit, is ownership still relevant? Is the world nowadays about using more than owning? In four words: what is worth owning?

Not to forget genetics.

The second driver of the fourth industrial revolution is biological in nature. Here is one simple question: to what extent should we be able to edit genetics and biology?

Genetic manipulation is a reality. Human genome decoding took ten years and a 2.7 billion budget. But nowadays anyone can now have his own DNA dissected in a few hours. So? The next step will be the ability to re-write or edit DNA. This could have applications in many fields. Individual health, agriculture and biofuels, etc. But do we want that?

 

>> Related reading: Here is what Alec Ross thinks about the industries of the future.

 

With ‘genetic editing’ comes a series of fundamental questions. What does it mean to be human? How much personal data are we willing to share? At what price or cost? What rights and responsibilities do we have in terms of editing the future generations’ DNA and food? The discussion is seriously interesting. If you want to know more…

The Fourth Industrial Revolution – Theme #3:  Policy challenges.

Chapter 3 discusses the fourth industrial revolution’s policy challenges impacts. This leads to a variety of questions.

The author describes impacts in proportions ‘almost impossible to envisage’. Schwab writes that economists are unable to reach a consensus on future development. He regrets a gap between pessimists (to whom everything good was already invented) and optimists (the others). And, he sees various challenges, such as ageing populations, productivity and employment changes, etc. Again, see my review of Martin Ford’s book The Rise of the Robots.

 

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But there are more questions!

How long will the revolution last? Or how far will it go? Will workers be subject to substitution by machines?

These questions have problematic consequences. As a ‘pragmatic optimist’, nonetheless, the author rejects drawing a negative picture. Instead, Schwab offers an uncommon perspective to innovation. He calls on people to ‘resist the temptation to engage in polarized thinking’. He calls on rejecting the simplistic ‘man-versus-machine-dilemma’ (largely explored by Ford). In Schwab’s opinion, to the contrary, change will ‘enhance human labor and cognition’.

The Fourth Industrial Revolution will bring… opportunities too!

A major outcome of the revolution, therefore, would not be unemployment but opportunities. In particular, an opportunity to give more value to social skills which by 2030 will bear more weight than physical abilities: a critical transition. Problematically, however, Schwab notes that most companies simply do not think about these evolutions and are in no position to align their strategies to the actual developments witnessed.

A major outcome of the revolution, thus, would not be unemployment but opportunities. For instance? Change could promote social skills – which by 2030 could matter more than physical abilities). Innovation could help rethinking contemporary operative models. It could introduce “talentism” as the new and “dominant form of strategic advantage”.

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Governance evolutions.

But for this, business and political leaders must take their responsibilities. They must rethink the way existing organizations will evolve. Our relationship to innovation and change must evolve. We must plan likely disruptions. We must adapt to data, put ‘data-powered business models’ into place. New ‘collaborative innovation’ models must appear and replace current hierarchies… Interesting!

The transition is critical. Yet, Schwab notes that few companies think about those questions. Few are in a position to align their strategies to such developments. So? Efforts will need to happen at various levels. At the national, regional and global levels.

Governments will need to adapt. Regulators will need to provide more transparency. Our representatives will have to generate more engagement. They will have to gain legitimacy (particularly given the rapidity of information nowadays). Technologies will help voice the citizens’ opinions. They will allow broadcasting alternative ideologies at a faster pace. The revolution will have a powerful empowerment effect.

For Schwab, governments will become “public services centres”. They will be “evaluated on their abilities to deliver”. Efficiency will become an assessment benchmark. Regulations and policy-making will also need to allow greater and more “agile governance”. They will need to ensure the “survival” of the states! Otherwise? Well… Technology could disrupt the social contract that ties governments to their citizens.

The ability to lead will matter.

Power, in turn, will increasingly lie with cities. Cities will gain in influence. They will grow with the revolution. They will gain an ability to “absorb and deploy technology”.

Hence, power will come from the ability to lead. Power will flow from the ability to invest. Power will flow from the ability to provide entrepreneurs with springboards.

Individuals too.

Of course, there will be more impacts. Individuals will need to figure out who they are and who they want to be in the future. They will need to rethink how they want to consume. And they will have to start thinking how they want to share data, how they see their relations with people. Revising our definition of ethics will be essential, particularly in relation to biologics.

To finish, Schwab insists that mankind now needs to “mobilize the collective wisdom of our minds, hearts and souls”. We need to develop a higher level of “contextual intelligence”. In short, leaders must engage with the civil society and shareholders at all levels. Global governance needs to change to allow a constructive shift.

The Fourth Industrial Revolution comes to the following conclusions.

• The fourth industrial revolution is of a kind humankind never saw before.
• The fourth revolution will change who we are and will impact our entire system.
• An innovation coordination framework is necessary. The leaders must engage with the civil society and shareholders at all levels. We need a form of common “contextual intelligence”.
• The notion of ownership will change too.
• The ability to ‘edit’ genetics and biology will have deep impacts in terms of responsibilities towards future generations.
• Machines will not replace workers because social skills and “talentism” will prevail.
• But business and political leaders must re-think their positions and operating models must evolve.

Food for thought!

My take on the book? Klaus Schwab’s contribution in The Fourth Industrial Revolution is very significant. In fact, Schwab is definitely following a thought-leadership approach here.

Thought-leadership is the art of developing ideas and expertise on complex topics. What makes a thought-leader is the ability to say things in such a clear and intelligible way that they become interesting, mind-blowing, enlightening and logical to the non-experts. And, well, what we have here is exactly that: a book to make people think.

Make people think?

From the beginning, the author explains that the book has three goals.

One goal is to increase awareness and comprehensiveness on technology-related issues and debates. Another goal is to think and define future needs and priorities. A third goal is to inspire and advocate for more public-private partnership. That is, more interaction between the various stakeholders.

As explained in this book review, the author provides a lot of food for thought on the matter. He highlights major technological breakthroughs and discusses the options. Artificial Intelligence, robotics, the internet of things, 3D printing, autonomous vehicles, nanotechnologies, etc.

All in all? Well, “the changes are so profound that, from the perspective of human history, there has never been a time of greater promise of potential peril”.

The words are strong, that’s for sure.

But the author provides three main arguments to back his argument. One, this revolution will have important impacts. Two, the digital aspect of the revolution could change who we are more than what we can do. Three, the changes will have a systemic impact that we need to think about now.

Schwab thus not only provides an overview of what changes are actually occurring. He also discusses the pace at which evolution is taking place. And he explains why they do constitute a revolution.

He raises many questions about lack of a framework. He discusses approaches, policymaking and rulemaking opportunities for controlling forthcoming technological innovations. Overall, a series of questions pushes the reader to think about the type of future he needs and wants.

A book to be read alongside others…

The Fourth Industrial Revolution is part of a general discussion on innovation and technology.

The topic is fascinating and very timely… but it is far from new. Isaac Asimov elaborated the laws of robotics in the Robots Series. Jay Allan recently wrote a great science fiction saga on artificial intelligence in his Crimson Worlds Refugees Series (loved that one).

But arguments also flourish outside of science fiction fantasies.

A fab book absolutely worth reading is The Industries of the Future, by Alec Ross. Simply put, Ross has been a Presidential advisor on technology issues for a while, and his book draws a big picture of how technology is about to change our world. Needless to say, that book is a must-read if you are interested in technology developments. A very complementary read. Have a look at my book review of Alec Ross – The Industries of the Future.

I mentioned Martin Ford’s book on the unemployment impacts of innovation previously. Ford is another thought-leader in the field of innovation and you definitely want to know about his perspective too. You can find my book review of Martin Ford’s The Rise of the Robots here.

From a more economic perspective, you might also want to take a look at my book review of Arnold Kling’s Specialization and Trade. The book does not focus on innovation per se. But, it does talk about the economic rationale behind innovation. And it provides explanations as to the necessity of specializing to be competitive. Worth a read too, look at my review.

In conclusion, Klaus Schwab’s book The Fourth Industrial Revolution is an absolute must-read book.

Schwab is a modern thought-leader committed to analyzing, explaining and challenging society developments on a global scale.  In contrast with other authors, Schwab’s approach to the issue is therefore largely positive and constructive. Forward-thinking, actually.

Schwab pushes readers to think about the future they want. He makes them think about the shape, organization, structure and governance of future societies. If you plan on having serious discussions on this in the future (and trust me, you will because this is usually a lunch-time favorite) you need to get that book on the way immediately.  So, what are you waiting for?

In sum?

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Your turn now, get the book!

That’s it for now, but don’t stop here! My reading notes are meant to give you a very comprehensive overview of the books I read and some food for thought for the month. That’s why I’ll Make You Think SMART is the Kick-Ass Book Reviews blog after all!

Having said that, the next step for you is to keep digging! Remember, books are a cheap way to learn new things and to benefit from the experience of others at no cost. Not to mention the stories you’ll be able to tell after a good read!

So, if my book review picked your curiosity, you only have one choice: go for it! Get the book and READ IT! Don’t postpone or you simply won’t… Usual disclaimer: yes, this is an Amazon Affiliate link which means I’ll get a percentage of everything you buy on Amazon. That supports my blog, and it won’t cost you a cent! Thank you!

As always, I hope you enjoyed this book review! Please let me know what you think in the comment box down the page. Especially if you read the book, if you feel like buying it, or if you simply enjoyed my review!

Cheers!

 

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