First came steam and water power; then electricity and assembly lines; then computerisation… So what comes next?

Some call it the fourth industrial revolution, or industry 4.0, but whatever you call it, it represents the combination of cyber-physical systems, the Internet of Things, and the Internet of Systems.

In short, it is the idea of smart factories in which machines are augmented with web connectivity and connected to a system that can visualise the entire production chain and make decisions on its own.

And it’s well on its way and will change most of our jobs.

Professor Klaus Schwab has published a book entitled The Fourth Industrial Revolution in which he describes how this fourth revolution is fundamentally different from the previous three, which were characterised mainly by advances in technology.

In this fourth revolution, we are facing a range of new technologies that combine the physical, digital and biological worlds. These new technologies will impact all disciplines, economies and industries, and even challenge our ideas about what it means to be human.

These technologies have great potential to continue to connect billions more people to the web, drastically improve the efficiency of business and organisations and help regenerate the natural environment through better asset management, potentially even undoing all the damage previous industrial revolutions have caused.

But there are also grave potential risks.  Schwab outlines his concerns that organisations could be unable or unwilling to adapt to these new technologies and that governments could fail to employ or regulate these technologies properly. In the book he postulates that shifting power will create important new security concerns, and that inequalities could grow rather than shrink if things are not managed properly.

For example, as automation increases, computers and machines will replace workers across a vast spectrum of industries, from drivers to accountants and estate agents to insurance agents. By one estimate, as many as 47 percent of U.S. jobs are at risk from automation.

Many experts suggest that the fourth industrial revolution will benefit the rich much more than the poor, especially as low-skill, low-wage jobs disappear in favor of automation.

But this isn’t new.  Historically, industrial revolutions have always begun with greater inequality followed by periods of political and institutional change.  The industrial revolution that began at the beginning of the 19th century originally led to a huge polarisation of wealth and power, before being followed by nearly 100 years of change including the spread of democracy, trade unions, progressive taxation and the development of social safety nets.

It seems a safe bet to say, then, that our current political, business, and social structures may not be ready or capable of absorbing all the changes a fourth industrial revolution would bring, and that major changes to the very structure of our society may be inevitable.

Schwab said, “The changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril. My concern, however, is that decision makers are too often caught in traditional, linear (and non-disruptive) thinking or too absorbed by immediate concerns to think strategically about the forces of disruption and innovation shaping our future.”

In order to thrive, business leaders will have to actively work to expand their thinking away from what has been traditionally done, and include ideas and systems that may never have been considered. Business leaders must begin questioning everything, from rethinking their strategies and business models, to discovering the right investments in training and potentially disruptive R&D investments. 

The future is happening around us.  And we must rise to the challenge to meet it and thrive in the new industrial revolution.