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By Mauro Guillen
While we continue to struggle with the collateral damage from the global financial crisis, the slowdown in emerging markets, and geopolitical turmoil, a quiet revolution is taking place.
We may call it the fourth big wave of change around technologies such as the Internet of Things (IoT), 3D printing, the human genome and nanotechnologies. What unites them is the full incorporation of the immense possibilities of digital computing and the insights of modern biology.
The first part of the economy affected by this fourth revolutionary wave will be manufacturing.
Robotics has already changed the way in which we make things. But so far we have merely substituted robots for human labor, with humans still running factories.
The big step would be to build intelligent factories, full of sensors and thinking machines. They will churn out customized consumer goods at very low prices.
Most importantly, they will make manufacturing efficient anywhere in the world, without having to constantly search for the lowest-cost labor locations, and without putting workers' lives at risk.
Politically and socially, this new concept will be liberating and disturbing at the same time. The process of removing human beings from factories will lead to unemployment, dislocation, and upheaval. It will need to be managed carefully, without leaving people behind.
The IoT will also revolutionize transportation. The driverless car is just the first development. Intelligent transportation systems will help the world reduce carbon emissions and waste.
People spend too much time in traffic congestion. As in the case of manufacturing, workers will be displaced and users will need to change their expectations and behavior.
Change will be difficult to absorb unless we prepare for it. 3D printing promises an even more radical transformation. It would involve on-demand "printing" of a wide variety of products, parts and components by the user after downloading the design.
This technology promises to decentralize manufacturing, make products more widely and quickly available, especially in sparsely populated areas.
It will also contribute to a dramatic reduction in transportation costs and pollution. I also envision it becoming a key technology for the human colonization of Mars and other planets or moons. 3D printing is already being used for healthcare applications, with physicians printing prostheses or other kinds of objects.
The possibilities created by the coding of the human genome will have enormous consequences. More people will be longer as we manage to anticipate the development of disease in specific individuals and device ways to cure them.
Populations around the world will age even more as life expectancy increases. The implications for government budgets and financial markets will be momentous.
As a society, we may have to redefine what "working age" and "retirement" mean. We will need to come up with new ways to keep workers working for a longer period of their lives, either full time or part time.
The technologies used to capture the potential of the human genome will also be available to develop new agricultural possibilities, perhaps making farming possible on other planets.
Most importantly, the potential of harvesting materials, ingredients or essences from plants will expand considerably.
The Fourth Industrial Revolution will affect every part of the economy, from manufacturing to transportation, and from agriculture to financial services. It will also transform education.
We continue to educate most people under the traditional model of classroom-based instruction. I am in no way advocating that we abandon this time-tested method.
However, we need to experiment with technology-enabled solutions, especially to expand access and reduce costs. These possibilities are very important to seize in order to help people adapt to the vast amount of technological change we will witness in coming decades.
No analysis of the future of a fourth-generation global economy can be complete without emphasizing the need to address the political, social, and cultural implications.
Over the last 30 years, income inequality has grown around the world due to technological change, with some people benefiting from it and others falling behind.
We cannot afford additional increases in inequality. In fact, we should try to reduce it. Thus, it is imperative that governments, companies, and other types of organizations come together to discuss and implement ways to make this fourth revolution work for everyone.
Inevitably, technological change affects the global geopolitical balance. Some countries will become more powerful than others. The world needs to create effective governance mechanisms for ensuring stability and order.
The second industrial revolution of the late 19th century gave us modern chemicals, automobiles, electrical goods, and many other new categories of products. They benefited humanity, but they also made World War I and World War II more lethal. This will be the ultimate political challenge of the fourth revolution.
Mauro Guillen is director of the Lauder Institute, Wharton School, University of Pennsylvania.
