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A Tale of Two Futures

Mulraj | Updated on July 24, 2020 Published on July 24, 2020

Much like Charles Dickens’ A Tale of Two Cities, ‘it is the best of times, it is the worst of times; it is the age of wisdom, it is the age of foolishness; it is the spring of hope, it is the winter of despair; we have everything before us, we have nothing before us’

The world is at the cusp of the 4th Industrial Revolution, which provides huge opportunities, as also great threats, but will, if managed well, bring huge prosperity as well as environmental benefits. Each of the previous three brought huge benefits to humankind. The first was provided the steam engine (1784), the second was of science and mass production (1870) and the third was the digital revolution (1969).

The 4th Industrial Revolution, which we are at the cusp of, includes technologies such as 5G telecom, Artificial Intelligence, Robotics, Internet of Things (IoT), 3D Printing, Genetic Engineering, Quantum Computing and others. But geopolitics is threatening to delay, or perhaps split the world into opposing camps, the benefits of the 4th Industrial Revolution.

5G, or fifth generation, communication technology would provide 100 times faster download speeds with low latency (the annoying lags during downloads). Faster video/game downloads would benefit consumers, and provide revenue streams. More importantly, the low latency will make possible autonomous vehicles, as long latency can result in less accidents.The design of the automobile, when it was first made, focused on safety (hence heavier steel was used) and on comfort ( larger cars) and speed (faster engines). It did not focus on energy efficiency. According to Natural Capitalism, a downloadable book on at cap.org, about 3-5 per cent of the energy in the fuel (petrol/diesel) actually moves the person, around 80 per cent moves the vehicle (in proportion to relative weightage) and the rest is lost in converting the energy into movement. So using composite materials would reduce the relative weightage and reduce fuel consumption.

Autonomous vehicles, combined with ride sharing (a la Uber etc), would reduce the number of private vehicles and free up parking spaces. Electric vehicles, using renewable sources, can further reduce fossil fuel requirement. These changes will be highly disruptive of the auto industry, the metals industry, the insurance sector and the fossil fuel based energy sector.

Robotics will result in automation of many repetitive factory jobs, displacing labour. The machines will be enabled, thanks to 5G, to talk to each other, through the IoT. This will result in productivity gains, and create wealth. Newer jobs will be created in areas where machines cannot displace, such as creative jobs. This will require a huge re-skilling effort and the Government must start encouraging re-skilling and vocational training efforts on a huge scale.

The anticipated displacement of labour has resulted in the call for a universal basic income, which the enhanced productivity will help pay for.

Perhaps in future, it might become possible for each individuals, carbon footprint to be measured (there already are wearable devices to do a bit of it). Maybe then, the variable component of pay of business leaders can be linked to their carbon footprint rather than to increase in market cap.

Thanks to investments made in several countries via the Belt and Road Initiative, China has created a lot of economic dependencies. For example, as per a video ‘Will China take over Europe’ by KG Vid, it is now the largest FDI investor in Europe. It is the top shareholder in Germany’s Daimler,, owns a stake in a nuclear power plant in UK, control over Switzerland’s Cyngenta, 67 per cent of Greece’s largest port and others. Its aim is to acquire technology and IP from Europe and to weaken its links with USA.

This is aided by Trump’s petulant behaviour towards US allies. This is why the coming elections in November are very important. To face off China requires getting a coalition of willing allies. But loyalties are divided due to a variety of reasons, including China’s economic involvement and financial muscle, as also Trump’s abrasiveness. Will an octogenarian Biden have the mental and physical ability to take on the most challenging job in the world?

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Published on July 24, 2020
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