Noah Ullman

The Founder and Executive Chairman of the World Economic Forum published a book in January called "The 4th Industrial Revolution." In his book, Klaus Schwab proposes that we are at the beginning of a fundamental shift in human/technological interaction. It's exciting, complex, and a little bit scary. Advances in robotics will redefine the workforce. Advances in information technology will deliver meaningful artificial intelligence. And advances in biotechnology will redefine what it means to be human. It's clear that the speed of progress is increasing and capabilities developed in the previous industrial revolutions empower the next, so let's take a brief look at the history of the previous industrial revolutions and their impact on business and society. (If you want to skip the history and get right to the actions you should take, click here.)

In school, we were all taught about the first industrial revolution. Wikipedia sums it up pretty well:


The 2nd Industrial Revolution took the technology from the first (notably steam power) and applied it to motion. This is the age of the railroad, connecting people and goods over long distances, requiring great production of steel and saw the beginning of electricity. It's generally agreed that the 2nd Industrial Revolution ended around WW1 (1914-1918). Socio-economic impacts were significant, not the least of which was a reduced reliance on local crops. "Crop failures no longer resulted in starvation in areas connected to large markets through transport infrastructure.[51]" Out of this revolution came factories, specialized labor, the automobile, commerce at scale and organizational management structures to manage the larger businesses that developed.

The 3rd Industrial Revolution is the "digital revolution" or the "information age" brought on by microchips and computing power that created the development of the information worker class. We're all living in this age now and enjoying a remarkable quality of life. Global GDP is at an all-time high, we live in a globally connected society, life is convenient and easier (physically) that is has ever been before. But there are problems. Advances in medicine and healthcare are supporting a global population boom. We are consuming natural resources at an alarming rate and the health of planetary ecosystems are in question. We're living globally but disconnected from our histories and families, and interpersonal connections are harder to come by, even in super cities.

The 4th Industrial Revolution is the next step of the digital revolution and it promises an application of intelligence to our computing systems, and computing to our human systems. Futurists believe in the concept of a "singularity" first proposed by Ray Kurzweil where man and machine get blended into an entity that is inseparable from each other. If you have teenagers using cell phones, you'll understand this trend. The 4th Industrial Revolution promises advanced artificial intelligence (AI) connected to the Internet of Things (IoT), enabling devices that are interconnected and “smart.” Real robots (not the robots that build our cars today, but Rosie from the Jetsons or C3PO) will become part of everyday life managing everyday human chores and tasks ranging from healthcare to warfare. This future is around the corner.

An outcome of the 3rd Industrial Revolution is mass produced goods from large factories. Some of these are disposable items, but some are very complex and high tech. Average citizens are able to put more computing horsepower in our pocket than we used to land a man on the moon. The 4th Industrial Revolution will bring massive customization. 3D printing will shake manufacturing, distribution, warehousing and logistics to their core. If you need a nut or bolt today that you don’t have in stock, it requires a trip to the hardware store who may, or may not have what you need. In the future, that part you need will be printed on demand in a couple of minutes. In a great example of the store being too far away – NASA printed a ratchet wrench on the space station! Back at home, children's drawings can become fully realized 3D objects enabling creativity. Even "old school" industries like construction are being transformed by the 3D printer – in Dubai, an entire office building "printed” in 17 days for $140,000 claiming savings of >50% in labor.

Some of this technology is already in place, some is coming quickly. The “cloud” enables all of this functionality by providing an interconnected platform in the internet supported by giant datacenters that have to manage the 2.5 quintillion bytes of data created every day. (Put another way, according to IBM, 90% of the world’s data was created in the last 2 years.) The cloud allows small organizations to have access to massive processing power without any investment in big hardware.

The world is changing quickly, what should I do?

  1. Either develop a personal interest in following these trends or find someone who can be your guide. Most people excited about this future are more than happy to talk about it over lunch, coffee or happy hour.

  2. Think way outside the box. Envision your organization 3, 5 and 10 years in the future. We don’t know what the future will be, but we know for sure it will not look like the present. Define your vision with a trusted advisor.

  3. Offload/outsource routine functions so you can focus on defining your future. If your organization doesn’t have a core competency in a particular area, outsource it. Accounting, marketing, logistics, IT, legal, manufacturing, etc. Focus on your core competencies, your brand, innovation and customers. Let experts in their specialized fields keep things running so you can keep your hands on the helm in the turbulent waters ahead.

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