How to spot the Fourth Industrial Revolution – using lessons from the first three.

I’ve been reading articles from Klaus Schwab, the founder and Executive Chairman of the World Economic Forum (WEF). He is presenting keynotes and writing extensively about how the world should grapple with what he calls Globalisation 4.0.

Accenture has partnered with the WEF on researching Globalization 4.0, which is being driven by the Fourth Industrial Revolution (4IR)

Given that the Third Industrial Revolution only started around 1970, I asked myself: can we really have seen such a huge shift as to usher in a Fourth Industrial Revolution already? What have been the previous revolutions, and is this Fourth Revolution really a revolution?

One way we can recognise a revolution is when there is a profound shift in the kinds of industry we engage in. This is happening today, and it mirrors what has happened in every previous revolution.

The first revolution was 10,000 years ago. There was a profound shift away from one industry (hunting and gathering) to another industry: agriculture.

When industries shift, so does the way we work. This is the second way we can recognise a true revolution. In the agricultural revolution we saw how work changed. Instead of 100% of the workforce hunting and gathering food, the advent of farming meant people could start specialising, making weapons, clothes, pottery, jewellery and other crafts.

That went on until the First Industrial Revolution from around the mid-1750s to mid-1850s.

Again we saw a profound industry shift. We moved from agriculture to mechanisation and steam power and water power. And work changed again. Instead of making things by hand, people worked in factories.

About a hundred years after the first Industrial Revolution we saw the second, starting in the years between 1850 and 1870. We shifted again, going from manufacturing to mass manufacturing. The productivity gains drove a massive improvement in the quality of life. Henry Ford famously invented both mass production and the two-day weekend, so that people would have time to drive his automobiles.

The third Industrial Revolution started on schedule, a hundred years later – from about the 1970s to the early 2000s. This was the age of science, electronics, IT systems and automation – and the Internet. Work shifted away from manual work to knowledge work. For the first time, people who lived in cities outnumbered people who lived in rural areas.

For me, the ways work and business shifted during this revolution are summed up in two key phrases from this time: “knowledge work,” invented by management guru Peter Drucker in 1959; and “systems thinking,” coined by Peter Senge in 1990.

At the heart of every revolution is a profound change in the way we create, exchange and distribute value. Because of those changes, how we work changes. And what drives the new way of working is new communication and information technologies.

The agricultural revolution created, exchanged and distributed value because per capita output increased hugely and suddenly there was specialisation. The information technology that drove this way of working was accounting and writing. This allowed us to create businesses and trade for the first time.

Other changes in communication and information technology are the invention of the postal system and the stamp, and then the telegraph and the telephone and the Internet which drove the Second and Third Industrial Revolutions.

As for the Fourth Industrial Revolution, we are once again seeing systemic changes. We can edit the human genome now, with the potential to change what it even means to be human.

Automation and artificial intelligence means people now have robots as team-mates.

All these developments mean massive shifts in business and society. How we work, create value and even entertain ourselves is changing.

So we are indeed starting to see the next Industrial Revolution, which will require companies to turn and face the new reality. We have a name for how to do this successfully. We call it The Wise Pivot, and it is the key to responding to the Fourth Industrial Revolution as the opportunity it is, rather than the threat many companies see it as.

We have worked with companies in Africa and around the world to help them transform their business models, develop transformation road maps and implement the technologies, processes and people to position them for a new way to create, distribute and deliver value. I’d be happy to discuss how we can help you capitalize on the opportunity; contact me anytime.

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