Page 48 - The Fourth Industrial Revolution

understanding of the nature of disruptive changes, little or no alignment

between workforce strategies and firms’ innovation strategies, resource
constraints and short-term profitability pressures. As a consequence, there
is a mismatch between the magnitude of the upcoming changes and the
relatively marginal actions being taken by companies to address these

challenges. Organizations require a new mindset to meet their own talent
needs and to mitigate undesirable societal outcomes.

Impact on developing economies

It is important to reflect upon what this might mean for developing countries.
Given that even the past phases of the industrial revolution have not yet
reached many of the world’s citizens (who still do not have access to

electricity, water, tractors and other machinery), many aspects of the fourth
industrial revolution characterize transformations in advanced, and to a
certain extent middle-income economies, however, this does not mean that
the fourth industrial revolution will inevitably impact developing

economies.

As yet, the precise impact of the fourth industrial revolution remains to be
seen. In recent decades, although there has been a rise in inequality within
countries, the disparity across countries has decreased significantly. Does
the fourth industrial revolution risk reversing the narrowing of the gaps
between economies that we have seen to date in terms of income, skills,

infrastructure, finance and other areas? Or will technologies and rapid
changes be harnessed for development and hasten leapfrogging?

These difficult questions must be given the attention they require, even at a
time when the most advanced economies are preoccupied with their own
challenges. Ensuring that swathes of the globe are not left behind is not a

moral imperative; it is a critical goal that would mitigate the risk of global
instability due to geopolitical and security challenges such as migration
flows.

One challenging scenario for low-income countries is if the fourth industrial
revolution leads to significant “re-shoring” of global manufacturing to
advanced economies, something very possible if access to low-cost labour

no longer drives the competitiveness of firms. The ability to develop strong
manufacturing sectors serving the global economy based on cost advantages

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