Has The Fourth Industrial Revolution by Klaus Schwab been sitting on your reading list? Pick up the key ideas in the book with this quick summary. When we hear the phrase “industrial revolution,” we often think of the rise of steam-powered machines and railroads in the 1800s. However, this isn’t the only industrial revolution the world has seen. In fact, there have been three, and we’re currently experiencing a fourth. Like those before it, this new industrial revolution is transforming the world, but this time, change is happening in a much more significant way than in the previous industrial revolutions; it’s moving more rapidly, happening on a larger scale, and displaying a more profound impact on life and industry. Now, we’re witnessing the rise of incredible technology: self-driving cars, 3D printing, and even robots that can follow very precise instructions. And, meanwhile, fields that have never interacted in the past are starting the join forces to produce the unimaginable. The fourth industrial revolution marks the beginning of a new era, and its essential to have a strong understanding of what this might mean for human life. In this summary of The Fourth Industrial Revolution by Klaus Schwab, you’ll learn

• about a new nanomaterial that’s stronger than steel and thinner than a strand of hair;
• why automation will actually increase the number of jobs and improve the economy; and
• what to expect from the future.

The Fourth Industrial Revolution Key Idea #1: The world has already been transformed by the three past industrial revolutions, and we’re currently experiencing a fourth.

Some 10,000 years ago, a massive shift in the history of humanity took place: humans began to farm. This was a profound shift from foraging and hunting, and marked a revolution in early human history – the agrarian revolution. This was the first in a series of revolutions, each of which would transform life on Earth. Throughout human history, there have been three industrial revolutions, the first occurring when we began using mechanical power rather than sheer human muscle. It happened between 1760 and 1840, and was spurred in particular by the development of steam power and the construction of railroads. The second industrial revolution dawned with the rise of mass production in the late nineteenth century, continuing into the first half of the twentieth. The hallmarks of this industrial shift were the assembly line and electrified power. And, finally, the third industrial revolution is often referred to as either the computer revolution or the digital revolution. The identifiers of this revolutions were the advent of computers, semiconductors, and the internet, all of which were developed in the latter half of the twentieth century. But this wasn’t the last industrial revolution to date. In fact, we’re currently experiencing a fourth industrial revolution, which began early in the twenty-first century. This revolution brought about a mobile internet, as well as better, cheaper, and smaller sensors that enable the constant development of new technologies. This period has also seen the rise of machine learning and artificial intelligence. However, this new industrial revolution isn’t only about smart machines. It encompasses a number of different fields as well, from material science to nanotechnology, energy to biology. The thing is, unlike other past industrial revolutions, this fourth industrial revolution merges these fields, connecting them through digital, physical, and biological platforms. Naturally, there are a number of other characteristics that distinguish the fourth industrial revolution. In the next book summary, we’ll explore this shift in greater detail, fleshing out the characteristics that truly set it apart from the ones that came before it.

The Fourth Industrial Revolution Key Idea #2: The fourth industrial revolution is happening faster, broader, and in a more impactful way than any of those that preceded it.

As you’ve now learned, the fourth industrial revolution is already underway. It’s happening faster, on a larger scale, and already has had a greater impact on the world than any of the previous revolutions. First, it’s moving at lightning speed. This makes perfect sense given that the modern world is more interconnected and richer in technology than ever before. This means that this revolution is one that is evolving exponentially, not linearly. Just consider the smartphone. The iPhone was introduced in 2007, yet somehow, by 2015, a mere eight years later, the world was home to around two billion smartphone users. Additionally, over just those few years, this technology drastically changed into a more developed and refined version of itself over just those few years. So, this revolution is defined by speed, but also by unprecedented returns to scale that allow businesses to produce the same or greater value with relatively fewer employment-associated costs. This is the direct result of modern day digitization and the automation of production. For example, consider the fact that when combined, the three most successful businesses in Detroit in 1990 – a time when the city was still a hotbed of industry – had a $36 billion market capitalization, $250 billion in revenue, and employed 1.2 million people. Conversely, the three largest Silicon Valley companies in 2014 had a revenue of $247 billion and market capitalization of over one trillion dollars, but employed only 137,000 people. That’s just over a tenth of the workforce that the Detroit firms had in 1990. On top of this, this revolution has already had an unmatched impact on the world through integrating a range of domains and disciplines. For example, fields such as 3D printing, computational design, materials engineering, and synthetic biology are now being fused in ways that could allow for the creation and implementation of entirely new organs for people who need them.

The Fourth Industrial Revolution Key Idea #3: The fourth industrial revolution has opened doors for a series of incredible new physical possibilities.

It’s already clear that the fourth industrial revolution stands out as quite different from its predecessors. But what’s driving this revolution in the first place? Well, in addition to the upgraded digital computing power at the root of modern information technology and digitization, there are also a few significant physical trends: autonomous vehicles, 3D printing, advanced robotics and new materials. Autonomous vehicles refers to driverless cars, but also to trucks, boats, and even aircraft. We’re able to experience these new, advanced forms of transportation due to innovations in technology: from artificial intelligence to sensors. Both of these are core to the fourth industrial revolution and are permeating all manner of fields. For instance, because of advanced sensor technology, drones are now able to navigate much more effectively in response to the environment, and therefore can be used for a number of new tasks, from dropping medicine into war zones to helping farmers measure their crops’ need for water or fertilizer. The second physical trend of this fourth industrial revolution is 3D printing, or, as it’s sometimes called, additive manufacturing. This new technology has been enabled by advanced computing, including digital drawing and modeling. In addition to its simply being invented, 3D printing is actually being used in a diverse number of fields, from medicine to energy production. Scientists are using it to produce everything from micro medical implants to huge wind turbines that will help create clean energy. The third trend, advanced robotics, is spreading like wildfire across every industry, from nursing to precision agriculture. On top of their widespread use, robots are actually able to adapt to their environments incredibly easily due to the fact that they no longer need autonomous instruction, and rather, can pull data and information from the cloud. They’re  even able to collaborate with humans. Lastly, new materials are also making a splash in this revolution; material nowadays is stronger, lighter, recyclable, and adapts more easily than the materials of the past. Some can even heal or clean themselves. Just take graphene, a newly discovered nanomaterial. Graphene is 200 times stronger than steel and a million times thinner than a single human hair. It can also efficiently conduct electricity and heat. However, the fourth industrial revolution isn’t simply defined by physical trends. Next up, you’ll learn about some that are much more ethereal.

The Fourth Industrial Revolution Key Idea #4: This fourth industrial revolution consists of digital and biological trends that are quickly transforming our world.

Even though these physical inventions are one of the major aspects that make up this industrial revolution, some of the other features are purely digital. One of these is known as the internet of things, or IoT. The IoT is a core concept working to bring together both physical and digital applications. It describes a network between physical devices – from smartphones to home appliances – and the people who use them. The creation of a network like this is only possible because of new technological advances such as transmitters and sensors. Today, packages that are being shipped in the mail are often connected to a sensor, a transmitter, or some other radio frequency identification equipment, which allows us to be able to track the package’s location as it makes its way to us. Uber and Airbnb present other examples. Even though these are digital platforms, these companies have been able to connect both physical objects — specifically cars and houses — with the people who need them. And, finally, in this fourth industrial revolution, we’re seeing a large range of biological developments and innovations surrounding topics such as genetics. Developments in genetic engineering, specifically, are already showing their tremendous impact on the future of humanity. For instance, unlike to the Human Genome Project, which spanned ten years and cost billions, a genome today can be sequenced within hours for less than one thousand dollars. This progress is largely credited to increased computing power. Scientists today are able to use models to test genetic variations, evaluating them far quicker than through the previous method of trial and error. Science is even approaching a time where precision medicine might be possible. This would mean that scientists would be able to make medical discoveries in a patient, from decoding the genetic composition of a tumor to offering a treatment that’s tailored to a patient’s specific case of cancer. And the advancements of genetic innovation don’t stop there. These medical developments will allow us to design plants, animals, and even babies with the characteristics we desire. Technological applications to biology are no longer simply the stuff of science fiction. While such interventions, of course, pose ethical and regulatory considerations, the technology that will make them possible has either already been developed, or will be perfected in the near future.

The Fourth Industrial Revolution Key Idea #5: Automation will cause a huge boost in the economy, and while it will eliminate some jobs, it will also create many others.

So, the fourth industrial revolution is clearly a powerful engine of progress and growth. But what impact will it have on the world around us? To start, there are several areas that will be directly affected, the first being the economy. More precisely, this industrial revolution will likely have a significant positive impact on the global economy, due to it spurring economic growth. Some pessimists may argue that we’re still feeling the effects of the 2008 financial crisis, the truth is, we’re really in the midst of a massive economic upswing brought on by the fourth industrial revolution. This progress that comes with technological growth is only just starting to show its face: as time goes on, it will directly translate into true economic growth. For example, advanced technologies and digitization are making it more affordable to invest in renewable energy, energy storage, and more efficient fuels. This means that an investment can turn a larger profit, meaning that companies won’t be required to rely on government subsidies and, as a result, GDP will actually rise while we reduce the threats posed by climate change. That being said, it is possible for the global economy to be negatively impacted as well, due to these new technologies challenging the employment market as it currently stands. More specifically, this fourth industrial revolution could trigger a destruction effect in the labor market, which means that people could lose their jobs to computers. In fact, it’s already clear that a number of positions – telephone operators and bookkeepers, for instance – have been taken over by computers. The near future unfortunately holds the same fate for other jobs, including those of legal secretaries, tax preparers, and real-estate brokers. However, the same industrial revolution that’s causing this automation of the economy will also trigger a capitalization effect. This means that an increase in automation will actually bring on a new prosperity, which will increase the demand for new jobs and businesses. This means that while detractors might may frame this part of the revolution as a battle between humans and machines, that’s not exactly correct. Human beings are actually able to adapt incredibly easily, so we shouldn’t fear this technological change. Instead, we should focus on helping those in danger of losing their jobs so that they can more easily transition into other work, as well as educating ourselves on how to best collaborate with machines.

The Fourth Industrial Revolution Key Idea #6: Public institutions are also feeling the impact from these technological advancements.

Now that it’s been made clear what the fourth industrial revolution involves, let’s zoom out a bit to the national and global levels of its effects. Looking at this movement from such a broad view is necessary due to the public bodies that have also been impacted by this new technological shift, particularly governments. This is because these new technologies can disrupt traditional, centralized power structures. For instance, digitization has enabled the private sector and individual citizens to easily and publicly express their opinions on digital platforms, while also providing an environment where they can unite and potentially act against traditional systems of government. WikiLeaks is a great example. This is a relatively small enterprise that successfully confronted an entire state. That being said, it’s equally possible for governments to use new technologies – for example, surveillance systems – to counteract this increasing citizen power. Whatever might be the end outcome, eventually governments will begin to feel the impact of these new technologies, which will force them to think of new ways to interact with their citizens. That’s why, in this new world, created by the fourth industrial revolution, governments must adapt their regulations far quicker than in the past to the constant changes around them. A good example is that, before this specific industrial revolution, governments were able to use an entirely top-down approach to law making and enforcement; back then, they were able to take their time in creating, revising, and then enforcing industrial regulations. However, nowadays, technologies develop at such a speed that these laws require faster evolution than it ever has before. The rapid news cycle of today also means that leaders are under more pressure to make decisions faster than during previous revolutions. In order to respond to these rapid changes, governments are required to collaborate with their citizens and related private institutions in novel ways. One example of this is investment in e-governance, a method that uses digital technology to increase citizen the participation of citizens as well as the efficacy of government. No matter what these new approaches to technology and government look like, the rise of the fourth industrial revolution and the advancements that come with it certainly mean one thing: the future will be fundamentally different than the past.

In Review: The Fourth Industrial Revolution Book Summary

The key message in this book: Human civilization has gone through three past industrial revolutions, and we’re currently experiencing a fourth. It stands out against the past industrial revolutions due to its lightning speed, widespread scale, and its unprecedented impact on every aspect of our lives, from industry to daily experiences and health.