Why You MUST Pay Attention to the World Economic Forum – Exponential Pace Of Change May Catch Many Businesses Off-guard

The World Economic Forum is best known for its Annual Meeting in Davos-Klosters. What is it about? The 48th World Economic Forum Annual Meeting aims to rededicate leaders from all walks of life to developing a shared narrative to improve the state of the world.

It is Jan 23-26th, 2018.

In the words of Klaus Schwab, who is the Founder and Executive Chairman of the World Economic Forum, it is about how each revolution in time has built on the previous revolution:

  • The First Industrial Revolution used water and steam power to mechanize production.
  • The Second used electric power to create mass production
  • The Third used electronics and information technology to automate production and
  • The Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century.

Source: https://pbs.twimg.com/media/Cz5LPgYWIAASUug.jpg

The Fourth Revolution is Changing Every Aspect of Business

The real difference in the previous revolutions and this one is that the Fourth is evolving at an exponential rather than a linear pace. It is disrupting almost every industry in every country. The shift from simple digitization (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business. As a result, business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.

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Getting Caught Off-Guard

If we have been operating in linear world, then we might be caught off-guard by the level of exponential changes. In a linear world, for instance, walking 30 meters, you end up 30 meters away. But in an exponential world, if you take 30 exponential paces, you end up 1,073,741,824 meters away. Businesses need to prepare for the Fourth Industrial Revolution’s rapid pace of change and broad impacts to preserve the interest of the consumers and the public at large while continuing to support innovation and technological development. It’s easy to get caught off-guard. In our grandpa’s world, it was linear. Things changed on one side of the world and no one knew about it. Today, things change instantaneously.

It’s All of Our Responsibility To Take the Shift Seriously

To do this, we must develop a comprehensive and globally shared view of how technology is affecting our lives and reshaping our economic, social, cultural, and human environments. Never has there been a time of greater promise, or one of greater potential peril. But today’s decision-makers are often trapped in traditional, linear thinking, or too absorbed by the multiple crises demanding their attention, to think strategically about the forces of disruption and innovation shaping our future.

Source: WEF

The Potential Benefits of the 4th Industrial Revolution

The people who have gained the most from it are consumers who are able to afford and access digital technology which has made possible new products and services that increase the efficiency and pleasure of our personal lives. These could be things like ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game. It is possible that the technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. The result of this is that transportation and communication costs could drop, logistics and global supply chains may become more effective, and the cost of trade may diminish. All of these things can open new markets and drive economic growth.

The Potential Downfalls of the 4th Industrial Revolution

At the same time, as economists Erik Brynjolfsson and Andrew McAfee have pointed out, the revolution could yield greater inequality, particularly in its potential to disrupt labor markets. If automation substitutes for labor across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor. Although, it is also possible that the displacement of workers by technology will, in as a whole, result in a net increase in safe and rewarding jobs.

Create a People First World- For Everyone

We need to shape a future that works for all of us by putting people first and empowering them. In the worse case scenario, from a pessimistic, dehumanized point of view, the Fourth Industrial Revolution may indeed have the potential to “robotize” humanity and deprive us of our heart and soul. But on the other hand, it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny.

The Best of Humanity: Creativity, Empathy and Stewardship

Using the best parts of human nature—creativity, empathy, stewardship— this is possible. But it is incumbent on us all to make sure the latter is what happens. I highly urge to you pay attention to the content that comes out of the World Economic Forum and apply it not only to your business, but also to your life. Schwab calls for leaders and citizens to “together shape a future that works for all by putting people first, empowering them and constantly reminding ourselves that all of these new technologies are first and foremost tools made by people for people.”

At the heart of Schwab’s analysis is the conviction that the Fourth Industrial Revolution is within the control of all of us as long as we are able to collaborate across geographies, sectors and disciplines to grasp the opportunities it presents.

The time is now. Are you in?

The introduction of the book is available in PDF form here.

@DrNatalie Petouhoff, VP, Innovation and Transformation Expeditions

Note: Parts of this article were first published in Foreign Affairs.

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