Complexus principal and risk thought leader, Warren Black, takes a deeper look at the new book from founder and chairman of the World Economic Forum, Klaus Schwab.
Klaus Schwab’s new book is his logical follow up to his first book, “The Fourth Industrial Revolution”.
In his first book Schwab attempts to explain how rapidly emerging new technologies are collectively re-shaping our global consciousness, our social behaviours, our preferred politics, the cities we will live in, our places of work, our management practices and even our future careers – very much in the same manner as the steam, electricity and computer-driven industrial revolutions did in previous decades.
In this second book, Schwab endeavours to explain the specific types of societal changes we should expect to incur during our transition to a future Industry state (version 4.0), and what related opportunities and threats are expected to be incurred.
Structurally, the book’s content is crafted around a collection of expert testimonies outlining how the continued advancement of modern-day smart technologies is expected to lead to a series of rapid and momentous changes which once again, will completely revolutionise our existence.
Each primary chapter is written by a relevant global expert in a particular technological field, who demonstrates how their field’s specific capability is expected to accelerate during the Fourth Revolution.
Collectively the chapters contribute to a common message: soon every functional aspect of human existence will be dependent on a complex global system of high-powered computers, information sharing networks and intelligent autonomous machinery.
Schwab argues that as more and more technological advancements come online in future, the more volatility and disruption each industry should expect to incur. In turn, participating organisations that wish to survive this dynamic new era will need to invest in risk management infrastructure that allows them to become significantly more sensitised and responsive to rapid environmental changes.
What makes this Fourth Revolution particularly unique is the speed, scale and intimacy at which new technologies will integrate into our existence.
Technological advancements are already steadily reaching a critical mass whereby major innovations are no longer just emerging from mainstream laboratories and universities but also from home basements and garages.
As a result, the industry is becoming so saturated with new technologies that it is almost impossible for participating organisations to remain aware of them all. For these mentioned reasons, organisations are also going to have to become significantly more resilient to the emergence of potentially disruptive forces.
Of particular relevance to the risk management profession, is how this book demonstrates that during every Industrial Revolution, it is the most repetitive and standardised of professions that are at highest risk of disruption from new generation technologies. This observation has tremendous implications for the risk management profession as much of what we currently consider risk management leading practice is standardised and repetitive. Consider how ISO 31000, risk registers, compliance, internal audits, health-checks, bow-ties and QRA’s are all standardised repeatable approaches to controlling risk, and it is exactly these kinds of methods that will be disrupted by big data, advanced analytics, artificial intelligence and autonomous machines during a future Industry 4.0.
Schwab concludes his book by acknowledging that at this early stage it is almost impossible to determine with any degree of reasonable confidence exactly what opportunities and threats our future working world will yield. What is certain, however, is that it is how we position ourselves to maximise these opportunities and mitigate the pending threats, that will ultimately determine our long-term fate. For this reason, the risk management discipline is poised to become a critical influencer of how we transition into a future Industry 4.0.
Perhaps the most impressive line from this book in fact summarises the book in its entirety, “The Fourth Industrial Revolution is not just an acknowledgment of pending societal change, but rather a global call to action”
I give it 4 out of 5 and recommend it to anyone who wants to learn more about the role of risk management in our expected, future working world.
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