Industrial revolution 4.0: Are we prepared for it?

J Mulraj | Updated on February 04, 2019

The world is at the cusp of the fourth industrial revolution. The first one used water and steam to mechanise production; the second used electric power; the third used electronics and IT. The fourth one fuses various technologies such as artificial intelligence (AI), the internet of things (IoT), autonomous vehicles, 5G telephony, nanotechnology, biotech, robotics, quantum computing and the like.

Is India prepared for this coming revolution, one that will determine which country forges ahead in development and which lag behind? And, as we approach general elections, citizens need to ask themselves which government is more likely to prepare us for the fourth industrial revolution.

Will India still dwell on its past and the legacy issues of caste creed and religion, or will it prepare its citizens for a vastly different future?

The advent of 5G telecommunication technologies will make real-time downloads possible. This will enable a whole host of things, such as a majority of driverless cars plying on the roads, and talking to each other using the IoT. This will reduce accidents by some 90 per cent, bringing down insurance premiums. By 2040, some 1.3 crore electric vehicles would be sold.

The autonomous vehicle, enabled by 5G technology, will result in a lower demand for automobiles and release parking space for parks. When combined with an increasing population of non-polluting EVs, it will benefit the environment. Nations will be at huge risk due to global warming; it is expected that parts of West Asia and Africa will be unliveable and this will lead to a huge migration.

The EVs will be powered by renewable energy, and the use of fossil fuel would reduce. The cost of solar panels is likely to drop to $0.5.

Real-time speeds using 5G would allow devices to be connected and to communicate with each other through the IoT. Thus cars on the road will talk to each other, avoiding accidents. Machines in factories will talk to each other, leading to productivity gains.

Artificial blood

3D Printers will be able to produce fully functional, usable organs. Artificial blood will become available. The oceans would be harvested for food.

We would need a strong, unified, visionary government to be able to take India ahead in such an evolving future. Not one that would result in internecine fighting over the benefits of political power.

The market rose last week thanks to the US Fed taking a dovish view and not raising interest rates. The main reason it did not raise rates is because of subdued inflation; and with crude prices not rising, rates can be expected to remain subdued. India benefits hugely from low oil prices. The CEO of a large shale producer, Harold Hamm, opines that production growth can drop by 50 per cent (that is, growth, not production). The industry has not produced positive free cash flow and needs to borrow to stay in business. This cannot continue indefinitely. If shale production falls, oil prices will go up. Also if Venezuela crumbles — which is where it is heading.

Maybe better to get a big lighter in this rally.

(The writer is India Head — Finance Asia/Haymarket. The views are personal.)

Published on February 04, 2019

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