Industrial revolution 4.0: ghosts of disruption past, present and future

Also Interesting

• Price dislocations lead to a rise in contrarian views
• Analyst Survey 2020 – Cycle, what cycle?
• ETF Trading in a High-Velocity Market

•  We argue that the transitional challenges posed by a “fourth industrial revolution” – dubbed “IR 4.0” – are already well under way. We define this revolution as one featuring much greater use of “capital” – via digitisation, automation and artificial intelligence (AI) – across areas of human endeavour that have hitherto been the province of “labour”.
• IR 4.0 has the potential to transform economic and financial activity at global, national, firm and household levels. The macro, geo- and national political implications are as significant as those of the first, second and third industrial revolutions, which themselves transformed the world. 
• Although still early-stage, the effects are already profound. In concert with globalisation, liberalisation of labour markets, migration and inflation targeting, they are affecting growth and inflation, investment, wages, productivity and employment. This view stands in contrast to what we take to be consensus – that transition lies in the future; that the effects are largely microeconomic, operating on prices and quantities of goods and services or wages in sectors rather than national, regional or global economies; and that the promise of a higher-productivity, higherincome future for the majority mitigates transitional and political risks.