The Fourth Industrial Revolution (4IR) is a term used to describe the current era of technological transformation, which is characterized by the convergence of digital, physical, and biological technologies. The 4IR is bringing about rapid and profound changes in all aspects of our lives, including the way we work, the way we live, and the way we interact with the world around us.
“The Fourth Industrial Revolution is not just about technology. It is about how we use technology to create a better future for all.”– Klaus Schwab, Founder and Executive Chairman, World Economic Forum
With over 20 million jobs added since the lowest point of the Great Recession in 2009, and an unemployment rate reaching its lowest point in nearly 50 years, the most current job data paints a positive picture of the state of the economy in the midst of the Fourth Industrial Revolution.
One of the key drivers of the Fourth Industrial Revolution is technological development. New technologies, such as artificial intelligence, robotics, and the Internet of Things, are being developed and deployed at an unprecedented rate. These technologies have the potential to revolutionize many industries and sectors of the economy.
The economic inequality threatens the country’s technological future
However, this country has unquestionably witnessed a substantial increase in economic inequality during the same time period, which coincides with the era of personal computing and is sometimes referred to as the third industrial revolution.
However, the 4IR is also raising concerns about economic inequality. Some experts argue that the 4IR will lead to a “jobless future,” in which many jobs are displaced by automation. They also argue that the 4IR will benefit skilled workers more than unskilled workers, which could further widen the gap between rich and poor.
In actuality, America’s economic inequality is at its highest point in almost a century. The wealthiest 1% of Americans now possess 19% of the nation’s income, which has risen significantly since 1928, thanks to the advent of personal computers over 40 years ago, while the lowest 60% of workers have seen virtually no real income rise.
During the same time period, the middle-class share of national income (defined as households earning two-thirds to double the national median) dropped from 62% to 45%.
Compared to its high in 1985, when the middle classes’ aggregate income was four times that of the richest group, it is now less than three times.
Worse, while the increase in wages has been modest for the middle and lower classes over the previous four decades, the costs of housing, health care, and food have risen.
The potential stability of this country is jeopardized by a shrinking middle class with less economic power and a stagnant lower class. As a number of prominent economists and business leaders have recently stated, the United States may be approaching a tipping point.
We must either revamp our current economic structure or prepare for drastic changes imposed on society by extremists on both the left and right.
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Indeed, according to a Gallup poll conducted in 2018, a majority of Americans between the ages of 18 and 29 favor socialism, while only 45% favor capitalism. In comparison, people aged 50 to 64 favor capitalism by 60% to 30%.
While a variety of cultural pressures and biases might explain inequality in income, economists have frequently identified skill-based development in technology as one of the main reasons for such inequalities.
Understanding that technology is a primary cause is crucial so that technological skill development may be incorporated into any solution, especially in an era where politicians are instead focused on immigration or low-cost goods imported from overseas.
Indeed, many of the highest-paying professions in the country are technology oriented, requiring some specialized training, if not necessarily an advanced degree. According to a Glassdoor analysis from 2018, many of the highest-paying jobs are in technology.
And, while technology is now a key component of our economy, it will only grow more vital as we move into the next phase.
Unlocking the Fourth Industrial Revolution:
The upcoming phase, known as the fourth industrial revolution, will see the emergence of artificial intelligence, automation, 5G broadband technologies, and mobile internet. Every industry, as well as white-collar and blue-collar jobs, will be impacted by this transformation, which may ultimately change all labor that people do for a living in the future.
According to the World Economic Forum research report while 133 million new, different careers will be generated throughout this same period, 75 million existing jobs may disappear by 2022. Without a question, as technology advances and incorporates machine learning, the nature of work will change radically in the future.
It could be necessary to concentrate on macroeconomic reforms, such as changing our tax code, forming public-private partnerships for infrastructure and education, and improving fiscal and monetary policy, in order to adjust to these unavoidable changes.
However, we must focus on developing work skills at scale right away. Upskilling is the important objective of the fourth industrial revolution.
The issue of this widening skills gap cannot be resolved by a single approach. Sadly, this mismatch between talents and jobs has been ignored for far too long.
This serious misalignment has been made worse by the government’s focus, college curricula, and the recruiting and training requirements of the private sector, all of which have just not kept up.
Developing a deeper understanding of job data and pertinent work data constitutes a crucial first step.
For example, there isn’t a single national database that tells job seekers where positions are available across the nation and what skills they’ll need to apply for them.
The Fourth Industrial Revolution: Shaping the Future of Work and Society
Because of this, even with the expansion in employment, the economy currently faces an extraordinary imbalance, with 7.5 million more job openings than there are unemployed people (5.8 million), according to the Bureau of Labor Statistics.
Fascinatingly, states and towns do have this kind of detailed information, but as of right now, there is no national database that gathers all of this information to enable increased transparency for all workers.
Additionally, we must reevaluate our educational system by placing more emphasis on options besides the four-year college program. The most recent data shows that there is still a considerable but distinct mismatch between education and employment.
For millions of people who struggle in a workforce that is changing rapidly a college education and degree may no longer be necessary, even though they are still beneficial and invaluable to many. For instance, 40% of today’s college grads hold positions that genuinely do not require such a degree.
There’s also a salary gap between jobs and college degrees. In fact, today’s lowest paid college graduates make less money than today’s top paid high school graduates.
In addition, a lot of college graduates, regardless of their post-graduation income, frequently leave with a large debt from student loans, which they then battle for years to pay off.
(Approximately 45 million Americans owe an average of roughly $30,000 in student loan debt.) Even so, only 60% of people complete their college education in six years, meaning that over one-third of prospective students are unable to finish their four-year degree programs in that amount of time.
These salary inequalities and graduation rates suggest that we should start emphasizing lifelong learning and vocational training for employees. Out of all the OECD countries, the United States now spends the least on vocational training.
Furthermore, the majority of American educational expenditure ends at the age of 25, meaning that billions more are provided by the federal government to support four-year college degrees than to enhance career and technical education.
The federal government should undoubtedly review this allocation or invest greater monies in job and employment training.
Private companies are creating a variety of learning programs to help them adapt to this evolving work environment in the absence of the federal government taking the lead in job training.
Colleges will only graduate 400,000 students with computer science degrees next year, despite the fact that the workforce as a whole needs 1.4 million graduates with those degrees.
As a result, companies are experimenting with different hiring and training initiatives. Just 7,000 of the 14,000 employees employed by Lockheed Martin last year have four-year college degrees.
Rather, they looked for people who possessed the basic skills needed, and they trained them in labs created in collaboration with institutions.
In this case, these people obtained the requisite work skills in advanced manufacturing and landed on lucrative jobs.
Additionally, in an effort to combat the inevitable rise of rapid innovation and technological disruption, companies are also establishing lifelong learning programs.
For instance, Infosys has developed several 8–12 week training programs in partnership with different colleges to improve the skills of its employees.
With Purdue University, Infosys created a cybersecurity program; with North Carolina State University, it created an analytics program.
With the help of these programs, Infosys has come to the conclusion that periodic and specialized training 8 to 12 weeks is adequate to raise skill levels in order to excel in proactive jobs.
It would be beneficial to provide a formal framework for these programs of vocational learning. Companies are already finding that giving staff members credentials from the sector, such badges or diplomas, encourages them to set aside time for learning.
It would be even more beneficial to have a way for these programs to be standardized and accredited by third parties in order to highlight the increased skill levels that workers have acquired and help them position themselves for greater pay.
Millions of dollars were spent by Lockheed Martin on their Department of Labor-certified advanced manufacturing program.
Expanding federal grants, allocations, or tax credits for training staff is necessary to encourage companies to make such investments.
If not, companies might be less inclined to sponsor these kinds of programs during a recession or to keep spending on workers.
Extending Pell grants to cover these shorter, more impactful learning programs has been one suggestion.
Companies must nevertheless continue to provide mentorships, apprenticeships, and internships. The available data shows that these programs have an immediate favorable business outcome.
Companies should do a better job of locating applicants from outside their networks so that a diverse range of young people can apply, even though mentoring, apprenticeships, and internships are advantageous to all parties involved.
These programs have the power to change lives, but in reality, underrepresented children do not have the same access to these chances.
For example, Bank of America took significant efforts to ensure that individuals from minority groups made up fifty-five percent of their most recent intern class.
Furthermore, we need to focus our attention from the supply of labor to demand-driven workplace requirements.
This emphasis always calls for more broad collaborations between the public, private, and academic sectors, with local and state governments attempting to link universities with the private sector.
This focus almost always requires larger public-private-academic partnerships, in which state and local governments try to establish relationships between the universities and the private sector.
For instance, a local alliance of higher education institutions and private sector businesses in the Washington, DC, area works together to create a curriculum that will prepare students for the wide range of employment that will be accessible to them in the future.
Together with university presidents, CEOs in the private sector create curricula that prepare students for positions at their companies and give them advantage when hiring new staff after graduation.
Lastly, the federal government needs to create a national workforce innovation fund (WIN) in order to accelerate the workforce training that this nation needs.
It can be designed after the Social Innovation Fund (SIF), which is currently in place and puts the federal government in a position to encourage social innovation across the country. WIN would serve two main functions.
It would first act as a hub for assessing the efficacy of workforce development programs statewide. Second, it would seek to co-invest federal funds in top-performing workforce programs with partners in the private sector.
This country is forced to make investments in the enhanced skills required to get workers ready for the careers of the future, particularly in technologically advanced industries. Tens of millions of Americans could be left out of this new fourth industrial revolution if we do not give priority to such education and training.