10.5 In the Wake of Big Data, the Pillars of Democracies Are Shaking
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increasingly being questioned by countries and citizens who feel that diversity is not
valued highly enough. Second, we have to overcome the problem of over-regulation
by adopting new approaches which allow for more innovation and for solutions which
are tailored to local needs. Therefore, I believe that long-term planning and administration will increasingly be complemented or replaced by more flexible approaches.
I am convinced that the information systems of the future, particularly the Internet
of Things, will enable self-organization, (co-)evolution, and collective intelligence.
These approaches will probably become the new organizational principles of the
digital society and the Economy 4.0 to come.
Instead of trying to control innovation through complicated regulations, it might be
better (particularly for job creation) to transfer the responsibility for their externalities
(i.e. the positive and negative consequences) to the beneficiaries. The simple rule
that the originator of externalities would have to compensate others for damage
created might replace thousands of complicated regulations by simple measurement
standards and unleash a wellspring of creativity which is currently stifled by red tape.
In fact, over-regulation, too low innovation rates, and unemployment levels are
currently among our greatest worries. Recently, there were about 25 million unemployed people in the European Union (the EU-28 states), and close to 20 million
in the Eurozone.
11 However, this does not even begin to account for the vastly
greater number of people who are not officially seeking employment (and thus are
not counted as unemployed), while they would actually like to have a job if one were
available for them. Unfortunately, things will get even worse as many employees will
be replaced by intelligent machines. Experts predict that the number of jobs in the
industrial and service sectors will drop by 50% in the next 20 years.
12 Unfortunately,
large technology companies are unlikely to create enough new employment in the
digital sector to make up for the difference. As a consequence, we may see an unemployment rate of 30 to 50% or even more—a number that probably no country can
sustain based on the current socio-economic framework. Faced with such challenges,
it is clear that we need to reinvent everything—our economy, the way we innovate,
the way we do business, and the way we run our societies (see also Appendix 10.1).
10.6 Industry 4.0
Recently, many newspaper columns have been devoted to the rise of the “Industry
4.0”. To explain what this is about, let us begin with the “Industry 1.0”, which
represents the first stage of industrial automation, involving innovations such as the
steam engine and the mechanical weaving loom. In turn, the “Industry 2.0” was
the age of the conveyor belt, which heralded the dawn of mass production. This
process was further refined by the “Industry 3.0”, whereby many production tasks
11 In Japan, too, about half of young adults don’t have a permanent position, see http://www.zeit.
de/2015/18/japanjugend-lebensstandard-oecd.
12 Frey and Osborne [3], Rifkin [4], Brynjolfsson and McAfee [5], Kurz and Rieger [6].
203
increasingly being questioned by countries and citizens who feel that diversity is not
valued highly enough. Second, we have to overcome the problem of over-regulation
by adopting new approaches which allow for more innovation and for solutions which
are tailored to local needs. Therefore, I believe that long-term planning and administration will increasingly be complemented or replaced by more flexible approaches.
I am convinced that the information systems of the future, particularly the Internet
of Things, will enable self-organization, (co-)evolution, and collective intelligence.
These approaches will probably become the new organizational principles of the
digital society and the Economy 4.0 to come.
Instead of trying to control innovation through complicated regulations, it might be
better (particularly for job creation) to transfer the responsibility for their externalities
(i.e. the positive and negative consequences) to the beneficiaries. The simple rule
that the originator of externalities would have to compensate others for damage
created might replace thousands of complicated regulations by simple measurement
standards and unleash a wellspring of creativity which is currently stifled by red tape.
In fact, over-regulation, too low innovation rates, and unemployment levels are
currently among our greatest worries. Recently, there were about 25 million unemployed people in the European Union (the EU-28 states), and close to 20 million
in the Eurozone.
11 However, this does not even begin to account for the vastly
greater number of people who are not officially seeking employment (and thus are
not counted as unemployed), while they would actually like to have a job if one were
available for them. Unfortunately, things will get even worse as many employees will
be replaced by intelligent machines. Experts predict that the number of jobs in the
industrial and service sectors will drop by 50% in the next 20 years.
12 Unfortunately,
large technology companies are unlikely to create enough new employment in the
digital sector to make up for the difference. As a consequence, we may see an unemployment rate of 30 to 50% or even more—a number that probably no country can
sustain based on the current socio-economic framework. Faced with such challenges,
it is clear that we need to reinvent everything—our economy, the way we innovate,
the way we do business, and the way we run our societies (see also Appendix 10.1).
10.6 Industry 4.0
Recently, many newspaper columns have been devoted to the rise of the “Industry
4.0”. To explain what this is about, let us begin with the “Industry 1.0”, which
represents the first stage of industrial automation, involving innovations such as the
steam engine and the mechanical weaving loom. In turn, the “Industry 2.0” was
the age of the conveyor belt, which heralded the dawn of mass production. This
process was further refined by the “Industry 3.0”, whereby many production tasks
11 In Japan, too, about half of young adults don’t have a permanent position, see http://www.zeit.
de/2015/18/japanjugend-lebensstandard-oecd.
12 Frey and Osborne [3], Rifkin [4], Brynjolfsson and McAfee [5], Kurz and Rieger [6].