We have witnessed the uprising of three industrial revolutions that have changed the ways of manufacturing and producing goods. Through introducing new gateways to improve the efficiency of market mechanisms, the revolutions have resulted in increased urbanization and initiated new business models. Today, most developed countries find themselves in the third phase, denoted by an era of digitalization and information technology. More than ever, high-skilled labour is being demanded and conventional manpower can now be replaced by machinery in many industries.
One of the key topics at the 2017 World Economic Forum in Davos was the emergence of the fourth industrial revolution and its implications. This revolution is said to be vastly different from its predecessors and infuse several technologies within the realms of physics, biology and digitalism. There is no general consensus yet on how the fourth industrial revolution will manifest itself and what its ultimate effects will be. The complex nature of this phenomenon will require societies to exhaust various options to adapt to the circumstances that unravel.
While the dynamics and challenges of the third revolution are to some degree still unfolding, why should we be concerned about the fourth industrial revolution? The main components of the third revolution, automation and information technology, have not been completely replaced with new alternatives. Rather, these new alternatives are being cultivated. The transition between the third and fourth revolution is difficult to grasp, as the fourth phase is to a great extent building upon on the existing nature of technological advancement that the third revolution introduced. What can be said is that the era of digitalization and automation is accelerating. Machines will replace even more jobs and cyber-technology is positioning itself as a highly cost-effective work tool compared to traditional manpower. Innovations such as self-driving cars, artificial intelligence, 3D-printing and robotics are exciting products of human creativity, yet also capable of disrupting socioeconomic stability.
Indeed, one of the major concerns regarding the fourth industrial revolution is the risk of a drastic increase in unemployment. As machinery comes to replace manpower, many branches will no longer need to employ people. According to a recent study by Ryerson University in Toronto, 42% of Canadian workers are likely to lose their jobs within twenty years due to the acceleration of automation technologies. A similar estimate applies to the U.S., where 47% of current jobs are in the risk-zone of being abolished.
The growth of automation is predicted to stimulate business management and improve the overall efficiency of manufacturing. Nonetheless, the shifting logistics of workforce will inevitably erode the appeal of human labor, if machinery can do the same job more efficiently and for a lower cost. Thus. technological advancement must be synchronized with a policy agenda that alleviates its disadvantageous repercussions on the labor market.
A universal basic income may have the capacity to balance out the unemployment triggered by the third and fourth industrial revolution. The prominent entrepreneur, Elon Musk, is one of many advocates insisting on instituting a basic income program to cope with the effects of automation. A basic income allocates all citizens, regardless of their financial or employment status, a fixed amount of money every month to cover necessary costs of living. It is supposed to be a government-funded initiative, with the purpose to provide people a fundamental sense of security and reduce job-related anxiety.
So far, Finland has conducted the most comprehensive attempt to try out a nationwide basic income program. The Netherlands is planning on conducting basic income experiments this year in multiple cities around the country. Likewise, politicians in India have begun to outline the prospects of implementing a pilot basic income project, and similar ideas are circulating in Canada.
Some might ask themselves why it becomes important to enact a basic income program instead of regulating the pace of automation? In the past, mankind has allowed industrial revolutions to progressively evolve and societies have strived to adapt, especially in market economies. After all, all technological innovation is the result of human intellectual curiosity and desire to constantly improve the status quo. However, policies aimed at greater prosperity tend to increase inequality, as all revolutions yield winners and losers.
Unemployment is a condition that most people are dissatisfied with. Financial self-sufficiency is, in many instances, both a matter of survival and pride. A basic income can potentially appease people who may lose their jobs due the consolidation of the fourth industrial revolution. An unconditional monthly income provides a sense of financial security. From a societal perspective, this may prevent people from revolting against automation, and instead embrace it by using the money to enhance their skills and careers.
Photo: “Float Glass Unloading” (2008), by ICAPlants via Wikimedia Commons. Licensed under CC BY-SA 3.0.
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