Discussion Paper No. 01/2019 The '4th wave of industrial revolution' – a promise blind to social consequences, power and ecological impact in the era of 'digital capitalism' Author: Birgit Mahnkopf
Executive summary In many countries, government agencies, business and employers’ associations, CEOs from big corporations, but also academia and even trade union leaders seem to be convinced that the 'digitalization' of society and economy is an unstoppable accelerating process, which can and should be shaped in favour of workers. Furthermore, it is argued that digital technologies offer potential for low-carbon transformation of energy and mobility systems, the circular economy and the protection of ecological systems. Yet it is not very clear how far digitalization can be linked to societal goals and whether it can be placed at the services of a global transformation towards ecological sustainability. It will be argued that a digitalization of the economy (and the society at large) is still a concept of what could be rather than what is. Therefore, this concept should not be taken as a given. Instead we should consider all the challenges and risks of this trend and then consider, whether we should resist or foster the trend. Therefore, in addition to the social consequences of a further substitution of human labour by machines and algorithms also the ecological implications of digital production system must be considered. It can be taken for granted that producers will only automate if doing so is profitable. But for profits to occur, producers need firstly, cheap raw materials and cheap energy and secondly, a market to sell. Keeping this in mind might help to highlight the critical flaws of digitalization: if robots would replace as many workers as predicted by international institutions and numerous think tanks, thereby creating even more mass unemployment and if wages are pushed further down because only the highly qualified workers could expect to receive a decent salary, two questions arise: first, to whom would the producers sell all their 'intelligent products' and second, can the material inputs of production really stay cheap if all advanced economies and even some developing countries will follow the same route towards a '4th industrial revolution'?.
ISSN 2523-9163 June 2019
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