AI, Industry 4.0 and the Future

Updated on March 18, 2018
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Robin Olsen holds a B.Sc In Computer Systems and has over 20 years of IT Experience.

The next Industrial Revolution is almost upon us
The next Industrial Revolution is almost upon us

A change in the very fabric of our society is coming and it will arrive faster than we think. Are we prepared for it? Can we adapt ourselves to it? Who should worry about it more? The young? The old? The Government? People? This change is happening right in front of us and I think many are not completely aware of what it truly means to our societies.

Do you feel at risk (professionally) by automation?

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I am referring to the advent of A.I (Artificial Intelligence) and advances in automation and robotics and the overall impact these coming changes are going to have on the Human workforce in general, it's size and complexity and the resulting social changes this alteration will cause. I believe this coming 'industrial revolution' (also called Industry 4.0 – representing the fourth industrial revolution) will result in some of the most radical changes to human societies since the first industrial revolution (1760-1840) ended the cottage industries and moved to a collective workforce and factories, etc.

Inside one of the first factories.
Inside one of the first factories.

So what is it? What does it mean? Well, 'Industry 4.0' refers to the fourth industrial revolution that is rapidly coming up. The first industrial revolution was between 1760 and roughly 1840 and involved the transition from hard production methods to machines and the resulting rise in factories and more collective workforces. This industrial revolution affected every aspect of daily life for virtually everyone and marks a major turning point in human history.

Also called 'The Technological Revolution' - the 2nd Revolution was about more than just factory improvements.
Also called 'The Technological Revolution' - the 2nd Revolution was about more than just factory improvements.

The 2nd Industrial Revolution was between 1870 and 1914 and was also referred to as the Technological Revolution. It involved rapid industrialization in the final quarter of the 19th century up to the beginning of World War 1 in 1914. Advancements in manufacturing and production technology enabled the widespread adoption of preexisting technology such as communications and rail networks, gas and water supply, and sewage systems, up until then restricted to a few select cities. This expansion of rail and telegraph lines after 1870 allowed for the unprecedented movement of people and ideas. In the same time period, new technological systems, such as telephones and electrical power grids, were introduced.

The 3rd Revolution allowed for mass production with a fraction of the previous work force.
The 3rd Revolution allowed for mass production with a fraction of the previous work force. | Source

The 3rd Industrial Revolution involves the rapid digitalization of production methods. Incidentally we are living through this one as we speak. Like 'Industry 2.0' , 'Industry 3.0' is punctuated by the convergence of technologies such as software, novel materials, more dexterous robots, new processes (notably 3D printing) and web-based services. These new methods and technologies have altered the very makeup of our factories and production methods in just my lifetime. Work has been centralized in many areas and the size of individual workforces has already been shrunk considerably. This loss of work force is consistent and non reversible. The jobs did not just 'move overseas' – they disappeared completely from the landscape – you don't need any welders when your product is produced on a 3D printer or similar technology. The result of this revolution is a reduced work force and more customized factories.

all four so far
all four so far

Then there is the 4th Industrial Revolution. This one will come up fast as each revolution before has directly lead to the one after it. Rather than a pause as there was between the end of the first and the beginning of the second revolution, I believe the third revolution will lead directly into the fourth with little or no pause between the two. The fourth revolution involves cyber physical systems and the 'Internet of Things' – which, in brief involves the direct communications of devices with other devices, removing the need for a human in between. Just as the Internet today is filled with people communicating with each other, the 'Internet of Things' involves devices communicating with each other in much the same manner, collaborating to solve problems, sending progress reports back and forth, placing work orders, scheduling maintenance, etc. All without human interaction.

Do you approve of A.I being used in everyday human society? To drive cars, answer legal questions, etc?

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Advances in A.I are going to converge on this to speed up the full automation of factories and the elimination of simple labor tasks from the work force. Robotics are advancing at a rapid pace as well as the A.I required to run it. This means that machines will operate independently as it's own entity capable of collecting data and analyzing it and then offer advice based on that analysis. The factories of the near future will not be large buildings filled with men in oily coveralls but be squeaky clean and virtually deserted. Most of the jobs in these places (and there will be way less of them per factory than even today never mind 20 years ago) will not be on the factory floor but rather be in administration, IT and maintenance. This means the total size of the work force is going to shrink again.... this time dramatically.

This list alone represents thousands if not millions of jobs.
This list alone represents thousands if not millions of jobs.

It is more than just the factory that will be affected as well, advances in AI are going to make a whole host of professions literally vanish from existence never to be seen again. This is where the big social changes come into play.

A.I specifically is going to affect so many different profession that it, combined with the convergences of technologies under Industry 4.0 and the resulting changes there will force a re evaluation of how we value our own contributions to society in general and maybe even, for some of us, the actual point of our own existence. You see, many of us value ourselves and our contributions by what we do for a living. We are very proud of our professions and for some families these professional choices are considered even traditional. So what happens when that profession vanishes from the landscape?

Do you have a traditional family profession that is under threat by AI?

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I would like to address the resulting social issues of all this by asking (and answering) a series of questions.

What happens when you have 2 million people but only enough total work force requirements for 1 million people?

Do we determine that the resulting 1 million unemployed are just lazy? Make no mistake about it either there will be massive numbers of unemployed people as a result of this convergence and the jobs will not be coming back... ever. It matters not at all at this point whom you vote for either, this is beyond politics or economic systems. This is on it's way. So how does our society adapt to the notion that not everyone is going to have a job?

If governments do not act wisely we will see a lot of this.
If governments do not act wisely we will see a lot of this.

Do we stick to the current opinions many of us have regarding unemployed people? Or do we adapt the notion that what a person does or doesn't do for a living has no bearing on that person's value. Or perhaps it isn't about 'value' but rather simple respect. A acknowledgment that we should maintain a common standard of living for all people. This of course would eventually lead to programs such as universal health care, education and income which would almost be forced onto a nation regardless of the political ideology present. You simply would not be able to compete on the global stage without these programs as the unemployed would generate too much unrest and the employed must be well educated in order to maintain and improve the machines.

Do you believe that universal income, health care and education programs are required at this point?

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The good news is this problem will reduce itself over time. Studies in third world countries with population problems have shown that programs like universal education (especially for women) will lead to a overall reduction in family sizes. So as long as the society adapts correctly and in good time, problems such as 'massive unemployment' will eventually go away as the overall population reduces itself naturally. It will take a generation or two to be sure. In the meantime I believe it is society's responsibility to provide for the displaced portions of the workforce. What format this accommodation will take will vary from nation to nation.

see how much revenue is generated by individual income taxes?
see how much revenue is generated by individual income taxes?

How is the government supposed to pay for anything when there are no incomes to tax?

This is a good question right? Today each and everyone of us working class stiffs and assortment of professionals pays a tax on our production (income tax) and this tax, for most countries, is the primary source of revenue for goods and services provided by that country. It is also the primary source of revenue for paying down debt. There are other sources of taxation and user fees but this one probably provides more bang for the buck than most of the others combined. So what happens when most of the population (or even half) is no longer producing the traditional income? What happens again when the government finally understands it is not a economic hiccup but that those half will never produce a traditional income again? Do you , the reader, know how much income tax some one with no income produces for the government? (a rhetorical question)

Can the loss of revenue from income taxes be reasonably recovered from Corporate taxes?

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Governments will definitely need to rethink the revenue stream as a result of 'Industry 4.0'. Those governments offering virtually no corporate tax rates will definitely need to rethink it all as those corporations will be about the only thing you can reasonably tax. If corporations refuse to setup shop in one country due to tax rates then access to that marketplace can be denied. In future I can see specific corporations being sanctioned by governments not just countries. There will be no other way to generate the required operational revenue needed to run your nation but to tax the corporations. Call it a Automation Tax if you wish. But even this may not be enough.

This is a big gap to have to make up for...
This is a big gap to have to make up for...

The good news is automation and A.I will improve the governments ability to provide those goods and services at a far cheaper rate than they can now. The simple reduction in workforce will lead to drastic savings so perhaps the need to tax will also be much less as a result of A.I and 'Industry 4.0'. This reduction in work force will be fought bitterly by the public sector unions but in the end governments, like most people and most businesses, will not be able to function in the 'new world' using old methods – governments simply will not have the income, or the ability to generate enough income, to keep paying those salaries in the absence of a relatively large population of working people to tax the income of.

Finally, as stated above, as the generations pass and the effects of the smaller family sizes starts to come into play, the need for government goods and services will also be reduced.

Business Industry 4.0 style
Business Industry 4.0 style

Does it make sense to give your customer the money he needs to be your customer?

Does this even make money? If we factor in the effects industry 4.0 and A.I will have on society we see that the burden of providing the revenue governments need will gradually shift from individual incomes to corporate taxes and operating fees. If the corporations are paying for the vast bulk of the programs such as universal income, education and health care, is this not in effect giving your customer the money he needs to be your customer? And if he is using the money you gave him to shop in your store how is that profitable in the end? Does the fact that the only customers in your store not using money given to them under a universal income program which your own corporation has helped pay for are most likely your own employees? How does profit get generated in this type of environment?

I am not sure of the answers as far as business goes, personally I think the very meaning of the word 'business' may change. What the business model will look like after this is a subject for experts in such fields to present and I am not one of them.

I think what is coming is exciting for us all
I think what is coming is exciting for us all

One thing is for certain. Things are going to change dramatically, values are going to be rewritten and what we look like as a society will be much different in the next generation. Many problems today will potentially be gone tomorrow depending on how governments react to this. In a way it is kind of exciting – in the end this will make many things better, but it will be different for sure. Hang on!

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© 2018 Robin Olsen

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