Cape Town – The world is entering a highly disruptive phase of technological change, which is one of the big five global risks highlighted in the 12th Global Risks Report presented at this year’s World Economic Forum (WEF) in Davos, Switzerland.
According to the report, there are five key challenges that the world is currently facing, namely persistent inequality, deepening social and cultural polarisation, facing up to the importance of identity and community, managing technological change and protecting and strengthening global cooperation.
“With the electoral surprises of 2016 (when the UK voted in favour of leaving the European Union in June last year and Donald Trump was elected US President in November) and the rise of once-fringe parties stressing national sovereignty and traditional values across Europe and beyond, the societal trends of increasing polarisation and intensifying national sentiment are ranked among the top five risks,” the report noted.
Technology disrupting labour markets
But although anti-establishment politics tend to blame increasing globalisation for deteriorating job prospects, the Global Risk Report highlights that there’s a bigger challenge that labour markets worldwide face: managing technological change.
“The emerging technologies of the Fourth Industrial Revolution (4IR) will inevitably transform the world in many ways – some that are desirable and others that are not,” according to the report.
Governing technological changes
The extent to which these technological advances are beneficial to society depends on the rules, norms and standards that will govern a particular technology.
How to govern new technology is a complex question, though. “Imposing overly strict restrictions on the development of a technology can delay or prevent potential benefits. But so can continued regulatory uncertainty: investors will be reluctant to back the development of technologies that they fear may later be banned or shunned if the absence of effective governance leads to irresponsible use and a loss of public confidence.”
In the report, 12 key emerging technologies are emphasised:
- 3D printing: Advances in additive manufacturing, using a widening range of materials and methods; innovations include 3D bio-printing of organic tissues.
- Advanced materials and nanomaterials: Creation of new materials and nanostructures for the development of beneficial material properties, such as thermoelectric efficiency, shape retention and new functionality.
- Artificial intelligence and robotics: Development of machines that can substitute for humans, increasingly in tasks associated with thinking, multitasking, and fine motor skills. Biotechnologies Innovations in genetic engineering, sequencing and therapeutics, as well as biologicalcomputational interfaces and synthetic biology.
- Energy capture, storage and transmission: Breakthroughs in battery and fuel cell efficiency; renewable energy through solar, wind, and tidal technologies; energy distribution through smart grid systems, wireless energy transfer and more.
- Blockchain and distributed ledger: Distributed ledger technology based on cryptographic systems that manage, verify and publicly record transaction data; the basis of "cryptocurrencies" such as bitcoin.
- Geo-engineering: Technological intervention in planetary systems, typically to mitigate effects of climate change by removing carbon dioxide or managing solar radiation.
- Ubiquitous linked sensors: Also known as the "Internet of Things". The use of networked sensors to remotely connect, track and manage products, systems, and grids.
- Neuro-technologies: Innovations such as smart drugs, neuro-imaging, and bioelectronic interfaces that allow for reading, communicating and influencing human brain activity.
- New computing technologies: New architectures for computing hardware, such as quantum computing, biological computing or neural network processing, as well as innovative expansion of current computing technologies.
- Space technologies: Developments allowing for greater access to and exploration of space, including microsatellites, advanced telescopes, reusable rockets and integrated rocket-jet engines.
- Virtual and augmented realities: Next-step interfaces between humans and computers, involving immersive environments, holographic readouts and digitally produced overlays for mixed-reality experiences.
Potential job losses
Most assessments suggest that technology’s disruptive effect on labour markets will increase across non-manufacturing sectors in the years ahead, as rapid advances in robotics, sensors and machine learning enable capital to replace labour in an expanding range of service-sector jobs, the report noted.
A 2015 McKinsey study was cited, which said that 45% of the activities that workers do currently could already be automated if companies choose to do so.
The report cautions that technological change can lead to wider disruption is the labour market, with incomes pushed down and unemployment pushed up in affected sectors and geographical regions.
“This in turn can lead to disruptive social instability.”
The authors of the report concluded that although technology continues to offer the hope of solutions to many of the problems, the pace of technological change is also having unsettling effects, ranging from disrupting labour markets through automation to exacerbating political divisions by encouraging the creation of rigid communities of like-minded citizens.
“We need to become better at managing technological change, and we need to do it quickly.”Read Fin24's top stories trending on Twitter: Fin24’s top stories