December 10, 2013
Opportunities Abound but Challenges Lurk on the Horizon
Blogs from the Forum
The panel was clear that we are indeed in the midst of or on the cusp of a third industrial revolution which may be as economically (and socially) significant as anything we have seen since the early 19th century. New technologies, particularly additive manufacturing, big data, and the internet of things offer the promise of vastly enhancing productivity and making work easier and more enjoyable. The technologies that were previously seen as something out of science fiction have either become a reality or will become real in the near future. One panelist called this the best economic news on the planet. And in the words of one – this is all just starting and far from slowing down. Moore’s law is likely to continue for decades to come.
Some skeptics have cited a slowdown in productivity growth in recent years as a sign that this progress might be slowing after all. One panelist called this a blip, citing two structural factors likely to make this more the exception to the trend rather than the trend itself. The first is the rise of big data, which is allowing for artificial intelligence. The second is the fact that billions of people are connected to the same network through the internet.
Despite the optimism of the panel, important challenges remain for the fate of the third industrial revolution. The greatest challenge cited by the panel is the risk that protectionism, industrial policy, and the Edward Snowden revelations will limit the open, global flows of data which serve as the backbone of the third industrial revolution and the technologies behind it. Absent these open flows of data, on which companies and people are reliant, the global economy is likely to suffer.
Another major hurdle facing the industrial revolution is that many will be left behind in the face of rapid technological advancement. This raises important questions about the appropriate role of government, not only in creating the conditions for the third industrial revolution to take place, but also to ensure that it happens in a way that preserves national cohesion and is sustainable. It is worth recalling that the first industrial revolution spawned the phenomenon of international socialism. If the third industrial revolution will in fact be as economically significant as the first, then it will likely produce its own distinct political and social effects – with profound implications for the United States.
Addressing the effects of the third industrial revolution requires not only the right political actions, but also the right national and international conversation about the impact of technology on society and what governments should do about it. Right now, the technology dialogue largely takes place at an elite level (like at conferences such as these). But the impact of technological change is felt by all, regardless of education level or social status. How can our societies have a broader and more inclusive conversation about these technologies and how we should adapt to them?
The Transatlantic Trade and Investment Pact (TTIP) and the Trans Pacific Partnership (TPP) were cited as important factors in both reframing that conversation and in ensuring that the data flows remain globally open. The question of data flows and privacy management is an important part of the negotiations for both regional trade pacts. The panel felt strongly that if we cannot get these elements right in these discussions, particularly in TTIP, then we will have no chance at shaping how Chinese views on an open internet.