Departmental Bulletin Paper The 4th Industrial Revolution and SMEs in Malaysia and Japan: Some Economic, Social and Ethical Considerations

Peter, Luff

As always in discussions of economic change, the choice of metaphors matters greatly. Today, two seem to be competing for our attention; the Fourth Industrial Revolution (4IR) and Industry 4. 0 (In4. 0). In origin, the term Industrial Revolution is a borrowing from politics, specifically from events in France between 1789 and 1793, and is highly dramatic in tone; it implies a process of sudden, rapid, radical change, one that is extremely divisive socially; liberating in the eyes of its proponents, destructive in those of its adversaries. In4.0 appears at first glance much less traumatic, and comparatively lacking in glamour; it is a software program upgrade, a consumer product similar but better than its predecessors, an improvement on an existing model, essentially unthreatening, designed to be user-friendly. Yet there is a sting in the tail. Why the 4.0? According to those who first popularised the phrase In4.0, ʻThe first three industrial revolutions came about as a result of mechanisation, electricity and IT. Now, the introduction of the Internet of Things and Services into the manufacturing environment is ushering in a fourth industrial revolutionʼ (Kagermann, Wahlster, & Helbig, 2013, p.6). So we are back firmly in the world of revolution. But even if it seems that 4IR and In4.0 are in fact intended as synonyms, the metaphorical difference in emphasis between them is still important, because it prompts some fundamental questions. How genuinely new and different is the 4IR/In4.0? Is it being oversold? Are we witnessing the early stages of a radical break with the past similar in scale to the changes that occurred in Britain between c.1750 and c.1850, or is what is happening less than that, an incremental change, essentially a sub-development of the IT revolution of the 1970s? And what timescale is involved? How far ahead are we supposed to be looking? A matter of a few years, or many decades? Finally, in what proportions will the 4IR/In4.0 prove benign or malevolent? Do the opportunities it offers outweigh the destruction that may ensue? To answer these questions, we obviously have to decide whether what we are currently dealing with is a genuine IR or not. To determine this, some kind of yardstick by which to assess it is needed, and this can only be offered by the past.

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