Catching the bullet train 

  • The Fourth Industrial Revolution brings both opportunities and challenges

Jan 22, 2019-

Today we are living in an interconnected and interdependent global village—marked by the permeability of goods, ideas and information. In this village, open and market oriented economic and trade policies, the advancement of modern means of transport and information and communication technologies (ICT), among others, have accelerated the momentum of globalization. 

In this milieu of advancement, the Fourth Industrial Revolution (4 IR) also known as fourth phase of globalisation (or Globalisation 4.0) is ushering a number of opportunities and challenges for this interdependent global community. The rapid advancement and revolution of ICT has been affecting the way of life of people, and shaping production and trade —although the applications and impacts of 4 IR are grossly uneven. 

Artificial Intelligence (AI), 3D printing, robotics, the Internet of Things (IoT), self-driving cars, nanotechnology, drone technology, among others, are changing the modalities of business in the public and private sectors and at the individual level. These changes resemble  bullet trains that hold the capacity to move at rapid speeds to reach desired destinations. But for some, these bullet trains demand an ultimatum: catch up or get left behind. Such a situation has fostered  frustration as most Least Developed Countries (LDCs), including Nepal, do not have the capacity to keep up with the rapid momentum   without much knowledge on costs and, other implications on financial, economic, and social sectors in the short and long-run. 

The 4IR demands new types of global norms, rules, standards, policies and also heightening competition. The unprecedented pace of technological change means that our systems of health, transportation, communication, production, distribution and energy, among others, will experience complete transformation.  

The Fourth Industrial Revolution is expected to be completely evolving, exponential and disrupting compared to the previous three industrial revolutions. As highlighted by Sentryo, the fourth industrial revolution departs from its predecessors in several key ways. The first relied on water and steam in machinery-driven production. The second leveraged electric power to create mass production. And the third harnessed electronics and information technology to automate power. The 4 IR links the physical, digital and biological spheres together, which requires changes in the entire systems of production and the ways of business, management and governance. 

Artificial Intelligence deals with the intelligence exhibited by software and machine. It can be used in almost everything but ultimately plays a pivotal role in assisting challenging jobs that are typically beyond (though sometimes within) the purview of human capacity.  In March 2018, Sophia, the first humanoid robot, travelled to Nepal to address Sustainable Development Goals (SDG) and innovation-related programmes in an event organised by the United Nations Development Programme on the theme ‘technology and public services’. Sophia, a citizen of Saudi Arabia, is the most sophisticated robot with artificial intelligence (AI) ) developed by a Hong Kong-based company Hanson Robotics.

In a similar vein, 3D printing is providing unprecedented services worldwide—including very limited use in Nepal during the  devastating 2015 Gorkha earthquakes—by providing medical supplies and the tools to build houses within a very short period of time in disaster-affected remote areas. Similarly, AI technology is also playing a primary role in the manufacturing sector. 

Consequently,  research and development projects in developed countries have shifted their focus towards the agriculture and services sectors. Drone technology is also being harnessed in agriculture and logistics including remote areas, allowing for more innovation and efficiency in production processes. Similarly, autonomous vehicles or ‘self-driving cars’ have gained popularity in several parts of the world. Likewise, e-commerce initiatives are gaining momentum in almost all countries, although the volume of transition is quite low in LDCs including Nepal. 

Prospects and challenges

These machines and technologies could bring several benefits in terms of enhanced productivity, growth, efficiency and effectiveness in production, logistics, business and governance. The human life is becoming more comfortable and efficient as technology has eased challenges associated with some of society’s most pressing problems—from difficult surgeries, disaster rescues, firefighting, bomb disposals, among others. As labour-intensive jobs can now be conducted by machines at lower costs, this could provide an opportunity to create jobs in new areas including research and development, which could enhance the size of the economy and maximise the well-being of people. Likewise, it could also provide an opportunity for digital industrialisation for achieving sustainable development. World Economic Forum’s Global Risk Report 2017 outlines that the 4 IR has the potential to raise income levels and improve the quality of life for all people. However, in practice, the benefits are often concentrated within small groups, resulting in increased inequality. 

The challenges of 4 IR, especially concerning LDCs including Nepal, are especially poignant before and after these technologies are adopted. Before adopting these new technologies, the massive  gap in physical and digital infrastructures including access to quality rail or road networks, electricity, reliable and affordable internet access. At present, only about 85 percent of  Nepalis have access to electricity. 

However, the uses of electricity are very limited. Regarding internet access, just over 60 percent of  Nepalis have access to the internet, however, this connection is mostly pertaining to 2G and 3G technologies. 4G internet is only just entering the market—while the world has advanced towards 5G technology. 

After the adoption of these new technologies, the challenges are related to job loss, increasing inequality, the loss of government revenue because of confusion in taxing, investment in research and development, identifying the new products and services having comparative and competitive advantage for offline and online business, legal underpinnings including e-commerce, tax regimes, consumer protections, cyber security, mainstreaming ICT in public sector to enhance effectiveness and efficiency, among others.

The way forward 

To address the upcoming challenges and reap benefits sustainably from the 4 IR, a permanent mechanism of public private dialogue (PPD) comprising academics, traders, entrepreneurs, media persons, young experts and leaders has to be in place to discuss the opportunities, challenges and the strategic direction. 

Similarly, a functional collaboration between educational institutions and industries or businesses, devising new taxation and revenue strategies in new technology and e-commerce initiatives, strategic mainstreaming of ICT in public and business sector is highly important to enhance productivity, efficiency and effectiveness. Most importantly, we need to invest in appropriate physical and digital infrastructures, including widespread electricity access, transportation, and affordable and reliable internet of high speeds. 

Carefully developed blueprints could lead to more positive and productive directions to reap the benefits of revolutionary technological changes. It is expected that the global leader will devise a strategic direction during the World Economic Forum’s annual meeting, scheduled to take place from 22 to 25 January in Davos-Klosters, Switzerland on the theme ‘Globalization 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution’. 

Aryal is a Deputy Permanent Representative of Commerce at the Permanent Mission of Nepal in Geneva.

Published: 22-01-2019 06:41

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