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Energy 4.0: opportunities, risks for PH

/ 05:08 AM August 12, 2017

Aix-en-Provence, France—Understanding and shaping an ongoing technology revolution is one of our most important challenges. The fourth industrial revolution—4.0 as it is called—captures the convergence of new technologies and their increasing impact on contemporary societies. What is this revolution and why does it matter, especially for the Philippines? Let’s focus on energy 4.0, the opportunities it draws and the risks it brings.

The first industrial revolution emerged in 1760 with the transition from hand production methods to machine employment. The second came in the late 19th century, epitomized in the increased use of steam power in the railway and ships. The third began in the 1960s with mainframe computing and semiconductors. It can be argued that 4.0 started as technologies embedded in societal metabolisms, even in the human body. These technologies are developing with exponential speed, depth and breadth.

Robots manufacture cars with better precision than human-dependent assembly lines. Artificial intelligence produces medical diagnoses almost with pinpoint accuracy. Satellite imagery helps observe the extent of flooding and earthquake damages. 3D printing changes the manufacturing industry in many once-inconceivable ways. Energy systems also experience rapid change.

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Energy 4.0 is not a propagandistic plan culled from the lexicon of bookworm revolutionaries. It may sound complex but it is a simple, yet important, idea. Here, smart energy production (replacing fossil fuels with renewable energy) and use (adopting more efficient choices and behaviors) are key priorities. A sustainable energy transition is one of its most exciting dimensions, with its ability to address social and environmental costs. In “The Fourth Industrial Revolution,” Klaus Schwab writes: “Rapid technological advances in renewable energy, fuel efficiency and energy storage not only make investments in these fields increasingly profitable, boosting GDP growth, but they also contribute to mitigating climate change, one of the major global challenges of our time.”

Many Filipinos have yet to enjoy the full benefits of even the second industrial revolution. A number still lack access to electricity; for those who have it, it remains highly unreliable. Thus, Energy 4.0 matters so much for the Philippines. Renewable energy decentralizes access, displacing grid infrastructure reliance. Smart, micro grids distribute power efficiently across a number of homes, suiting our archipelago’s remotest locations. Many children will be able to study at night.

Energy 4.0 also opens up new opportunities for high-value-added, high-efficiency industries that could drive the rise of income levels. Renewable energy, smart grids, and electric mobility integration form a major green field with mature technology manufacturing and distribution, among other huge investment opportunities. Modernizing Filipino businesses and enabling them to compete in global markets are thus imperative.

A Philippine Energy 4.0 should be given priority. Since being a first mover opens up serious advantages, our future competitiveness will rest on how quickly we take on this opportunity. Our government should be building clear strategies that entail all its benefits. If not, we risk being left behind.

The opportunities that Energy 4.0 brings have to be appreciated alongside its contingent risks. No revolution comes without risks. In the fourth industrial revolution, rising joblessness is the direst.

The decline of employment shares of manufacturing, along with its value addition to the economy, is now a reality in both industrialized and developing countries. In what Dani Rodrik calls “premature industrialization,” the service sector fast overshadows manufacturing at fractions of income per capita. With 4.0, the decline of manufacturing jobs can be intense. Since many developing countries like the Philippines still count on manufacturing as the primary channel for modernization, job creation, and poverty alleviation, this rapid decline can cost us a lot.

Joblessness is a social ill and can be devastating. Our rapid population growth has repercussions in the future state of jobs. While optimists may interpret our population boom as a dividend of young producers and consumers, pessimists may see it as a growing problem of unemployment. The rapid development of new technologies in 4.0 can amplify existing employment inequalities in the highly unequal Philippine society. Driverless cars will threaten taxi and Uber drivers. Robots will replace human hands in factories, and even in agriculture. Artificial intelligence will automate banking and insurance. A large proportion of employed Filipinos may simply stand to lose their jobs.

Our poor governance systems and weak institutions may easily collide with future joblessness to a possible point of a socioeconomic rupture. Those who didn’t benefit from earlier industrialization—mostly in the countryside and in urban poor communities—risk being left further behind. As inequalities rise, social challenges beckon. This is cause for alarm because studies show that unequal societies tend to be more violent, have higher incarceration rates, and have lower levels of life expectancy.

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So how can the Philippines harness 4.0 while mitigating its risks?

The answer to premature deindustrialization is not to manufacture expensively at home: 4.0 has a totally different ambience. Asean integration, for example, which highlights greater regional economic connectivity, brings with it the supposed benefit of mutual learning, regional knowledge sharing and capacity building. But integration brings many messy problems that require systems thinking. We should design and operate our response not in silos but in concert.

In Philippine Energy 4.0, where rapidly improving access to electricity and sustainable energy transition should be national policy, the government should view these goals as a function of investment not only in hardware technologies but also in software. Energy 4.0 should serve as the foundation for building a knowledge-based economy. Producing highly competent Filipinos in the age of 4.0 requires a proactive government that adopts new technologies of knowledge production and, at the same time, crafts inclusive institutional arrangements that promote widespread sociotechnical innovation through emphasis on research and development, science and technology, and creative thinking.

Dr. Laurence Delina (ldelina@bu.edu), of South Cotabato, is a sustainability scientist at Boston University where he leads a research project on the future of energy, and a Rachel Carson Fellow at Ludwig Maximilian University Munich. His latest books are “Strategies for Rapid Climate Mitigation: war mobilisation as model for action?” and “Accelerating Sustainable Energy Transitions in Developing Countries,” both from Routledge-Earthscan.

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