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The Fourth Industrial Revolution

/ 12:14 AM October 08, 2016

LOS ANGELES—The past week has been unnerving, partly because we still have to “creatively interpret” President Duterte’s heart-stopping public pronouncements. On top of that, we are in the midst of a bloody war against the global, billion-dollar trade in illegal drugs; certainly, it requires huge government expenditures.

This is why our latest World Economic Forum global competitiveness ranking, which dropped by 10 points, is more than a cause for concern. This impacts strongly on our international commerce and trade and our country’s economic and political stability.

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The WEF 2016-2017 Report states: “The country appears to be going backwards vis-à-vis its peers in some of the more complex areas of competitiveness. Its technological readiness ranking falls 15 places to 83rd; business sophistication drops 10 (places) to 52nd, and innovation falls 14 (places) to 62nd. The country’s goods market efficiency rank goes down 19 places to 99th. Entrepreneurs noted that the Philippines is the second lowest ranking country in the world when it comes to the number of procedures to start a business.”

To be sure, the Duterte administration’s economic planning team is working as fast as it can to address this development. But after 100 days, it’s time to leave the fiery campaign rhetoric behind and look forward, upward and outward. We have our future to look after, no matter what our chief executive says.

And what an exciting future it could be for all of humanity. WEF founder and executive chair Klaus Schwab talks of the Fourth Industrial Revolution, “characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”

The First Industrial Revolution used electric power to create mass production, electricity ushered in the Second, while electronics and information technology brought the Third.

Today, the phrase “rapid technological advances” seems so trite. Schwab explains that the velocity, scope, and systems impact of current technological breakthroughs are unprecedented. He says:

“When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.

“In the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and  productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.”

A word of caution, though. Analysts foresee that as much as 50 percent of the world’s labor force could be displaced by technology by 2050.

Schwab cites economists Erik Brynjolfsson and Andrew McAfee, who pointed out that the Fourth Industrial Revolution could yield greater inequality, particularly in its potential to disrupt labor markets. But it is also possible that the displacement of workers by technology could result in a net increase in safe and rewarding jobs, they said.

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“We cannot foresee at this point which scenario is likely to emerge, and history suggests that the outcome is likely to be some combination of the two. However, I am convinced of one thing—that in the future, talent, more than capital, will represent the critical factor of production,” Schwab says, adding:

“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: The response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.”

Butch Hernandez ([email protected]) is the executive director of the Eggie Apostol Foundation.

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TAGS: global competitiveness ranking, industrial revolution, Technology, World Economic Forum
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