A revolutions occurs when there is a massive economic, technological, social, and cultural change which affects humans to such an extent that it’s often compared to the change from hunter-gathering to farming. It is often characteristed by a quantum shift and convergence in three fundamental technologies affecting economic activity: energy, communications and transportation. It enables a new level of economic activity, and each builds on the previous revolution.

In his book The Fourth Industrial Revolution, Klaus Schwab, the founder and executive chairman of the World Economic Forum, the International Organization for Public-Private Cooperation, asserts that there are actually four distinct periods of industrial revolution throughout history, including the one we’re beginning right now. Schwab describes an industrial revolution as the appearance of “new technologies and novel ways of perceiving the world [that] trigger a profound change in economic and social structures.”

 

It is generally considered that we have entered the 4th Industrial Revolution. The four are:

  • The first industrial revolution – steam – the use of water (steam power) via coal energy, rail for travel and printing press communication. Steam powered rail and printing. It was the beginning of mechanical production age. A mainly agrarian lifestyle of farming started to transform into an urbanised one around factories.
  • The second industrial revolution – electrical – the use of oil fossil fuels for electricity (and cars), cars for transportation and telephone communication. It was the beginning of mass production age and the modern world as we know it.
  • The third industrial revolution – digital / computing – the beginning of renewable energy, air travel and internet communication. It was the beginning of the automated production age.
  • The forth industrial revolution – connected / intelligent – the use of advanced batteries, thermal storage and fusion energy, autonomous vehicles and IOT & intelligent communication. It was the beginning of the IOT and AI production age. It is the fusion of Digital, Physical and Biological technologies.

 

Which technologies make up the 4th Industrial Revolution?


There is no one universally agreed list of technologies that represent the Fourth Industrial Revolution (4IR), and many categories have multiple sub-categories. These 12 technologies in the digital, biological, and physical worlds go a long way to describing the main areas that we can expect rapid advancements in the coming years:

Physical

  • Space Technologies will provide ubiquitous and increasingly fast connectivity to billions of people globally. The space industry has repeatedly proven that it’s at the helm of innovation, and with the help of high profile companies like SpaceX more entrepreneurs and funding is likely to flow into this sector. New business models (eg. the impact of AI on satellite imagery) will present lower barriers for entrepreneurs with new ideas to access markets, such as Bluefield who are launching micro satellites with proprietary sensors and algorithms to provide methane emission monitoring at a scale, accuracy and cost that has never before been possible.
  • 3D printing allows manufacturing businesses to print their own parts, with less tooling, at a lower cost, and faster than via traditional processes. Plus, designs can be customised to ensure a perfect fit.
  • Innovative materials, including plastics, metal alloys, and biomaterials, promise to shake up sectors including manufacturing, renewable energy, construction, and healthcare. Both Cruz Foam and MGA Thermal are creating new substances to revolutionise foam manufacturing and thermal energy storage.
  • Robotics refers to the design, manufacture, and use of robots for personal and commercial use. While we’re yet to see robot assistants in every home, technological advances have made robots increasingly complex and sophisticated. They are used in fields as wide-ranging as manufacturing, health and safety, and human assistance. Companies like Zainar are creating the infrastructure that will help make robot automation a reality.
  • Autonomous Vehicles (AV) is so much more than simply replacing the driver in our cars, as it ties in with Mobility as a Service (MaaS), long haul transport, telematics, logistics, delivery, renewable energy, smart cities, big data, analytics, and that’s all before we consider autonomous flying vehicles and other autonomous transport.
  • Energy capture, storage, and transmission represent a growing market sector, spurred by the falling cost of renewable energy technologies and improvements in battery storage capacity. Renewable energy still suffers from storage issues and companies like MGA Thermal are creating a revolutionary thermal energy storage solution to retrofit coal fire plants with renewable energy.

Digital

  • Virtual reality (VR/AR/MR) offers immersive digital experiences (using a VR headset) that simulate the real world, while augmented reality (AR) merges the digital and physical worlds. Both offer exciting possibilities in education, entertainment, training, building maintenance, rehabilitation and so on. Examples include Phoria’s world leading digital twin solutions.
  • New computational technologies are making computers smarter. They enable computers to process vast amounts of data faster than ever before, while the advent of the “cloud” has allowed businesses to safely store and access their information from anywhere with internet access, at any time. Quantum computing technologies now in development will eventually make computers millions of times more powerful. These computers will have the potential to supercharge AI, create highly complex data models in seconds, and speed up the discovery of new materials.
  • IoT describes the idea of everyday items — from medical wearables that monitor users’ physical condition to cars and tracking devices inserted into parcels — being connected to the internet and identifiable by other devices. A big plus for businesses is that they can collect customer data from constantly connected products, allowing them to better gauge how customers use products and tailor marketing campaigns accordingly. In fact, some go as far as to say Big Data, IoT and AI is Industry 4.0. There are also many IoT applications, such as Nutromics who are aiming to offer the world the world’s first personalised nutritional wearable, to Zainar who are developing the next generation of wireless radio location tracking technologies for mobile and IoT applications.
  • Artificial intelligence (AI) and machine learning (ML) describes computers that can “think” like humans — recognising complex patterns, processing information, drawing conclusions, and making recommendations. AI is used in the majority of CP Ventures’ invest companies (such as SynchronousNutromicsBluefieldSpiral GeneticsMetigyMiroUmano, and Oovvuu) and is a real barrier to entry from competition.
  • Blockchain is a secure, decentralized, and transparent way of recording and sharing data, with no need to rely on third-party intermediaries. The digital currency Bitcoin is the best known blockchain application. However, the technology can be used in other ways, including making supply chains traceable, securing sensitive medical data anonymously, and combating voter fraud.

Biological

  • Neurotechnology is making unprecedented strides in how we can use and influence the brain. Neurotechnology can help us monitor brain activity and look at how the brain changes and interacts with the outside world. Still in its infancy, neurotechnology is enhancing education, communication, intelligence, cognitive ability, disease treatments, and the military. For individual users, neurotechnology application can now help paralyzed people control prosthetic limbs or wheelchairs ‘with their minds’. Neurofeedback, the technology to monitor brain activity in real time, offers countless opportunities to help fight addictions, regulate food behaviour, and improve performances ranging from sports to the classroom. In addition, the next generation of computers, whose design have been triggered by brain science, are able to reason, predict and react just like the human cortex.
  • Geoengineering (also known as climate engineering) represents “large-scale, deliberate interventions in the Earth’s natural systems” of oceans, soils and atmosphere in order to reduce the effects of climate change. Examples include carbon capture, shift rainfall patterns, create artificial sunshine, or alter biospheres. Unfortunately geoengineering does little to nothing to help with the root cause of climate change and may have many unforeseen impacts.
  • Biotechnology harnesses cellular and biomolecular processes to develop new technologies and products for a range of uses, including developing new pharmaceuticals and materials, more efficient industrial manufacturing processes, and cleaner, more efficient energy sources. For example, our ability to edit the building blocks of life has recently been massively expanded by low-cost gene sequencing and techniques such as CRISPR. Similarly, Spiral Genetics has developed the world’s most powerful software to compare large populations of whole human genomes (large scale data mining), which ultimately will power novel discoveries that lead to new diagnostics and drug discovery.

 

What are the potential negative impacts?

Every period of upheaval has winners and losers and almost nothing is bigger than an industrial revolution. Given the speed and complexity of the technologies involved in the fourth industrial revolution mean that every sector, industry, company and individual in the world will be impacted, either positively or negatively or both.

Given that we are only at the beginning of the revolution it is difficult to know the exact impacts, there are three main areas of concern:

  • Inequality – Previous industrial revolutions have benefited consumers greatly with reduced cost of goods, better quality and innovations. So far this is holding true in the beginning of this revolution. However, there are two main worrying areas. A concentration of wealth in the top 1% which is only likely to increase and the possibility of high unemployment as the jobs in this revolution will likely be more focused on higher skilled people and the growing threat of automation.
  • Security – As everything in society becomes interconnected and dependent on technology, so too does the threat of disruption.
  • Identity – This covers many areas from social media to genetics. For example, the growing use of social media makes for the growth of disinformation and manipulation, such as we’ve already seen in US elections.

 

What about investors?

We know that the 4th industrial revolution will impact every person, company and government. There is no escaping it.

Governments, who are generally not know for being predictive or agile but rather reactive and slow, will struggle with the enormity and speed of the coming changes. Laws, education, health, employment, age care, security and so on will be impacted. They will need the foresight and solutions from private enterprise to cope.

Businesses that are generally designed for incremental efficiency improvement not revolutionary step change improvement, will also struggle with the coming advancements and rapid competition from nimble startups. They will increasingly need to acquire their upcoming competitors if they hope to stay relevant in the coming years.

Individuals will need to constantly re-skill and up-skill themselves. AI and robotics will replace many blue collar and increasingly white collar jobs.

For investors the companies that utilise the technologies and trends of the 4th industrial revolution will disrupt the incumbent companies and thrive in the new world. They will be developing where investors want to invest and selling into rapidly growing market spaces.

 

Summary

The fourth industrial revolution is the largest and most profound of any of the three revolutions that have preceded it.

“The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry in every country,” writes Professor Klaus Schwab, author of The Fourth Industrial Revolution. This revolution could yield greater inequality, particularly in its potential to disrupt labor markets.

However, the fourth industrial revolution also offers unparalleled opportunities for those entrepreneurs and investors that understand the systemic shift that’s just started.