By  Celine Herweijer (PwC UK)   Benjamin Combes (PwC UK)  Bridget Jackson (PwC UK) Leo Johnson (PwC UK) Rob McCargow May 22, 2017 | Last updated: January 15, 2018

The Fourth Industrial Revolution (4IR) offers huge potential to transform and realign our economies and societies. There is an increasing realisation that the 4IR could also exacerbate problems for people and the planet. The G20 should champion a holistic approach to the 4IR that helps to address society’s environmental and social challenges. This means both mitigating unintended adverse consequences of change and maximising positive social and environmental benefits. The G20 should explore, and recommend, governance structures and policy mechanisms to ensure governments have the agility and ability to keep pace with the 4IR, and harness innovations that promise the greatest social and environmental returns.

Challenge

As part of PwC’s overarching narrative for the T20, we discuss how three drivers of change – globalisation, technological advances and “financialisation” – have historically served humanity well by typically delivering both economic growth and social progress. However as these drivers have accelerated, evolved and become intertwined over time, divergence between economic growth and social progress has occurred placing people and the planet under substantial strain. In this paper we look forward to how today’s technological-driven revolution – the 4IR – can course correct this trend, with the right governance, enabling environment and public-private partnerships.

Humanity stands at an important moment in history. The global, digitally-enabled 4IR is already the fastest period of innovation ever. It is underpinned by rapid advances in technologies including artificial intelligence, robotics, the internet of things, nanotechnology and biotechnology, to name a few. The disruption of many traditional markets and industries is already underway. How can we shape these transformations to address society’s and the Earth’s most pressing challenges, and not exacerbate them?

Previous industrial revolutions advanced economic development but have largely come at the expense of the planet. Today there is mounting scientific consensus that Earth’s systems are under unprecedented stress. Scientists at the Stockholm Environment Institute have identified that four out of the Earth’s nine ‘Planetary Boundaries’ have already been crossed, namely climate, biodiversity, land-system change and biogeochemical cycles.^[1] Risks will only heighten as population swells to a projected 9 billion by 2050, increasing food, materials and energy needs. In parallel, society today is under growing social and economic strain, from mounting inequality, youth unemployment, automation, geopolitical volatility and nationalism.

These global challenges of today are framed by the UN’s 17 Global Goals for Sustainable Development (SDGs).^[2] Agreed by 193 countries in 2015, the SDGs provide an action agenda for people and the planet out to 2030. There is a window of opportunity now, to make the sweeping advances of the 4IR help governments, business and society to achieve these goals, not make them harder to attain.

For governments and policy makers, it is vital that the enabling mechanisms are put in place for the 4IR to be a sustainable revolution. The innovations and economic value unlocked by the 4IR must maximise positive social and environmental impacts, and avoid exacerbating today’s most pressing challenges. The governance challenge is even greater than in previous industrial revolutions due to the complexity, pace, and global and sectoral breadth of change. Zero-cost digital distribution today enables products and services to penetrate the mainstream and ‘go global’ in a matter of months, with policy and regulation often struggling to keep up. One example of this challenge is the high profile OECD BEPS initiative now being implemented to address tensions in the international tax system created in part by the impact of technology on business and how multinational companies invest.^[3]

For the 4IR to be the first sustainable industrial revolution, governments and regulators will need to adapt quickly with the rapidly evolving 4IR landscape and provide the enabling environment, safeguards, investment and oversight to guide the future that is being built.  Support and partnerships will be needed to unlock and scale innovation on emerging – and potentially game-changing – technologies and solutions for people and the planet. And foresight, public policies and technological governance will be needed to avoid or minimise unintended consequences and protect public interests.

Proposal

Amid a rapidly changing innovation landscape, we have identified 10 emerging 4IR technologies that we think could individually and collectively have the greatest impact on jobs, livelihoods, and environments