Predications about the fourth industrial revolution
It has been said many times that predicting the future is hard. Understanding this, the Nobel Laureate and father of the atomic model Niels Bohr once said, prediction is very difficult, especially if it’s about the future! Just two prediction into the future of work show how such prophecies can go spectacularly wrong even done by eminent economists. The first comes from German economist Karl Marx. Well, even after 180 years after his prediction remains unfulfilled. We do not seem to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner.
The second prediction was made by British economist John Maynard Keynes who thought in the year 1930 that, in one hundred years’ time we will be working 15 hours per week. Well, ninety-one years after Keynes’ forecast, we aren’t there. A few months ago the ILO calculated, the global average working time to be around 40 hours per week. Sadly, neither Marx’s nor Keynes’ prediction appear to have become reality. Worse, it does not look like they will come true any time soon. Still, people like to predict not just the future of working time but the future of work as such.
In the last few years, predicting the future of work got a renewed push through what became known as Industry 4.0 or the fourth industrial revolution. These ideas have been advocated, for example, by the self-appointed World Economic Forum or Davos meeting. The basic idea is that there was a:
- 1st industrial revolution defined by a transition towards steam power. This so-called revolution was in fact rather slow. It took roughly sixty years from 1760 to 1820. The
- 2nd industrial revolution was a bit faster. Marked by railroads, telegraphs and electricity, it took from 1871 to 1914. This was succeeded by the
- 3rd industrial revolution or digital revolution using computers (e.g. the invention of the semi-conductor); while the,
- 4th industrial revolution builds on this as it relies on the Internet, TimBL’s WWW, machine learning, artificial intelligence (AI), robotics and the Internet of Things (IoT).
All of these revolutions had a profound impact on work. The 4th industrial revolution or Industry 4.0 will be no different. It is predicted that Industry 4.0’s automation and advances in artificial intelligence will mostly affect jobs in the service industry in the global north where most GDP comes form the service industry and no longer from manufacturing. As the Coronavirus pandemic has shown, geographical proximity is no longer a decisive factor for those workers able to move into home office, e.g. the kitchen table.
On the downside, Industry 4.0 will accelerate the pathologies of the precariat such as insecurity, inequality, starvation wages, long working hours, etc. The precariat is, after all, the outcome of a neoliberal ideology that has been pushed since the last forty years.
For workers in companies and corporations, the rise of Industry 4.0 will also mean that they will be forced to adjust to Industry 4.0’s demands or be forced to leave. Predictions are that these workers will be pushed into the precariat (temporary work insecurity) or, worse, the working poor (locked in a vicious circle of poverty). Industry 4.0 will increase the number of workers in the precariat. These workers will be found, roughly, in four groups:
i) The underemployed. The underemployed are well educated – often with university degrees. These are workers with long experiences in working life. Industry 4.0 will transfer these workers onto short-term contracts with lower wages.
ii) Simultaneously, they may also enter the second group: the underpaid. These are workers who have lost or can no longer find those jobs that defined the working life of the post-World War II era: full time, permanent and well paid 9-to-5 jobs. For those leaving university, it often means the rather sudden realization that the promises of the neoliberal job wonder do not exist. They have been grossly misled by the false capacities of the free market, by the ideology of “opportunities for all”, etc. Today, almost 40% of Spain’s university graduates, for example, fall in this category. They are pushed into the precariat even when working at universities.
iii) The knowledge entrepreneurs are workers that had good jobs but these jobs are replaced by Industry 4.0 as robots and automation is introduced while flexibility and digitalization are pushed by management. If they are not fired, they will also be put on short-term contracts often offered by labor hire companies. In the USA, it is estimated that this group already contains up to 54 million workers.
iv) Finally, there are vagabond workers. They tend to be migrant workers. A typical example is the former engineer or medical doctor from Syria now driving a taxi or working for Uber. They dream of re-joining the middle-class with secure, high paid and permanent jobs. Vagabond workers are forced to move from job to job on a frequent basis.
Below the precariat lurks the sliding toward into the working poor. The threat of a further moving downward is often used as an instrument of domestication keeping the precariat at bay. Since the introduction of neoliberalism, the working poor can be found in every country and in increasing numbers – even and perhaps increasingly so, in the Post-Brexit UK.
The global working poor are barely noticed by official statistics even more so when the working poor work in the informal sector. This sector is set to grow as mini-jobs and zero-hour contracts. Common to all is a race to the bottom mostly by those who are forced to take any job no matter how dirty, embarrassing or dangerous. These are the 3D-jobs of the future: dark, dangerous and dirty.
Meanwhile, many Russian factory jobs are already so poorly paid that workers almost automatically fall into the category working poor. They – just like many others – are forced to move into ghetto-like areas where rent is cheap and crime is high. Beyond that, they are exposed to an ever accelerating downward spiral without much hope to ever join the middle-class.
Instead, the middle-calls itself is shrinking. Worse, the middle-class itself is rapidly moving into the class of the working poor without stopping at the intermediate level of the precariat. The precariat still experiences somewhat less damaging working conditions compared to the working poor.
Furthermore, Industry 4.0 is likely to eliminate many jobs held by today’s middle-class as robots and artificial intelligence are introduced. With the advent of algorithmic management many middle managers will be replaced by mathematical systems.
In short, Uber does not need human resource management (HRM) when workers simply log-on to a website. HRM’s performance management, for example, is done via customer ratings automatically feeding into job allocations and dismissals. Once enhanced by machine learning, many middle managers can become totally redundant just as line supervisors and HRM.
Instead of upward mobility, social mobility has basically been frozen. And if there is some minute mobility at all, it is not upward but downward. It is very likely that Industry 4.0 will force middle-class workers into the lower ranks of the working class. This comes in addition to globalization and enhanced neoliberalism creating a triple-whammy – globalization, neoliberalism and Industry 4.0 – for middle-class workers as we move into the future.
Finally, there is outsourcing that, after having impacted on manufacturing in past year, will now start to impact on white collar jobs. Already more than 50% of all Fortune 500 companies and corporations have outsourced some parts of their operations to low-cost countries. Increasingly, this will happen to white collar workers in the future. Simultaneously, capital in OECD will continue to move from work-intensive to capital-intensive jobs. But these capital-intensive jobs will be defined by algorithmic management where a direct boss may no longer exist.
In the past, workers could talk to their boss. Today, Uber employees and many others can on longer talk to them simply because they no longer exist. Instead, all they have is an App and an algorithm. Workers in Bangladesh have never even able to talk to their de facto boss at Walmart, GAP, Nike, Adidas, etc. They notice their real bosses only when their wages are further reduced.
Wages are also reduced for the next cohort of young workers entering employment. Many of their dreams of earning a good wage will be shattered in the near future. Recently, young people were recently asked about their working future. 60% of the children wanted to be lawyers so they could help other people. The dreams of many twelve to fourteen year olds were rather clear. When asked where they thought they would be in ten years’ time, most thought they would be doctors, lawyers, dentists, archaeologists, etc.
Their image of the future was bright and encouraging. But when researchers checked the realities after ten years, it turned out to be quite different. A decade on, most of the young people had entered working life. They were poor young people without educational qualifications and well paid work.
Everything is possible until one’s dreams are crushed when meeting the realities of work in the 21st century. Today’s reality is rather different from the common dished up “all-boat-will-rise” ideology and the false promises of endless opportunities made by the advocates of neoliberalism. The move to Industry 4.0 will make this only worse.
Even ghastlier is the fact that young people who drop out of school will enter the ranks of the working poor. They will be asphyxiated in the class of the working poor where they will be socialized into generational poverty. To some extent, they will become invisible to society. Even after having been cleansed through the use of statistical trickery, unemployment statistics, for example, are no longer relevant for them.
In the past, unemployment numbers used to make sense, whereas in the future, they will not. As a consequence, corporate media will parade unemployment statistics because they have been deprived of meaning. Unemployment may be low but the working poor can barely live off their wages. As jobs are handed out by the neoliberal job miracle, the working poor and the precariat work two to three jobs without getting by. As a consequence, unemployment statistics look great but the jobs they represent no longer look great.
With Industry 4.0 this will not get better in the future. The sheer numbers of the poor will increase. Meanwhile, the few become richer and richer. The working lives of many in the not too distant future will be defined by four core groups:
- firstly, there will be the super-rich. They are also known as the 1% class. They leave the 99% (all of us) behind;
- secondly, the salaried élite of knowledge workers and innovation workers will grow. They will also continue to move into urban centers like Singapore, Paris-south, London-Managerialist, Milan, Moscow-Zelenograd, Boston Route 128, Silicon Valley, Seattle, etc.;
- thirdly, the precariat, who will probably constitute the largest part of the future workforce; and,
- finally, the ever increasing working poor to be found in the Global South and the Planet of Slums but also in the so-called advanced world of the OECD.
On the upswing, many of the innovation and knowledge workers will be able to manage their own working and leisure times. The next to non-existing work-life-balance that defines working life for many has for them at least a chance to become reality. This might be supported by the fact that most creative people will work less and less in a particularly defined and confined space. They will also increasingly escape the rigid managerial structure of working between 9 and 5.
Instead, these knowledge workers might be part of a global network – a network that some have already termed über-connected. New technology will only enhance global connectivity. But these new technologies will also involve robots, artificial intelligence and the merger of both.
The future will also be defined by nano-computers as well as new analysis and diagnostic machines. In some cases, entire functions and processes of jobs previously carried out by people will be eliminated. This might not be 10% or 20% but some people suggest this will impact on up to 50% or even 80% of jobs. These jobs might well be replaced by AI, the AI-robotic merger, nano-computers, etc.
For capital, employers and managers, robots can indeed mean that a 200-year old dream comes true. Robots might become more expensive as they can do more things, but they are very unlikely to demand pay rises. On the other hand, there is a good chance that robots will get cheaper and cheaper just like computers because both are mass produced. Furthermore, robots don’t rebel and they will not go on strike.
And because they don’t get depressed, there is no workplace stress for them, no workplace violence, no sexual harassment, etc. Management believes they are easy to manage until they themselves are replaced by algorithmic management.
Finally, robots don’t criticize management and as a consequence, robots are easy to lead. In fact, they might not need leadership at all. Robots also don’t have cultural hang-ups and they don’t generate social and emotional tensions – no bullying. In short, a managerial paradise opens up.
On the other hand, robots, artificial intelligence and the AI-robotics merger are very likely to demolish many forms of what we call a profession. Slowly but surely, these robots and artificial intelligence will take over many of the professional tasks that are carried out by them today. In other words, the 4th Industrial Revolution will bring very serious changes to white collar work. Overall, six trends might be identified:
- No Cyborgs: It is unlikely that the future of work will include a terminator-like future where robots will battle with each other; nor will there be Borg; nor we will meet a RoboCop-like hybrid at work.
- Administration: In reality, it is likely that much of today’s administration, management and bureaucracy will, at least partially, vanish into thin air. Its functions will be digitized, replaced by algorithms, put online and made more efficient by artificial intelligence.
- Hierarchy: Old managerial hierarchies will change. Managerial hierarchies are organizational leftovers from industrial societies – societies with a heavy component of Fordist manufacturing. Hierarchical functions will be taken over by organizational and even global network as well as algorithmic management. This will significantly erode today’s managerial bureaucracies and hierarchies.
- Management: The role of traditional management roles will change rather significantly. For one, there will be more teams and project based work. Even more importantly, many of the traditional tasks of managers with be converted into algorithmic management. This is likely to eliminate rafts of middle-managers.
- Productivity: It is likely that the increased introduction of robots and artificial intelligence will push down operational costs while significantly pushing up productivity. This will favor companies and corporations – not workers. Capital has successfully severed the productivity-wage link. While productivity goes up wages go down or stagnate. This also means that sections of middle class will be pushed into the precariat. Other sections will be decimated. The future doesn’t look good for the managerial middle class which is linked to two things: a) control and b) communication. These functions will be replaced.
- Inequality: Finally, the future will bring increasing inequalities in income and wealth. It will further split workers into winners who will make some gains and the precariat and the working poor. The world of work will see a further rising income inequalities. Yet, those who own capital will receive even higher capital income because of the increase in productivity and the reduction in costs.
Overall, these developments indicate that we will see an increasing inequality among wage earners. Simultaneously, we will also see a growing inequality between workers’ incomes and those who live from profits. In other words, many will get poorer or struggle to maintain their way of life while the rich will get richer.
This article was published on 12 July 2021 at CounterCurrents.
Photo: (source: The Barricade)
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