The Fourth Revolution: Davos and the Digital Future

On Monday, the World Economic Forum opened its annual meeting in Davos under a theme that sounded like a warning and a promise at once: "Mastering the Fourth Industrial Revolution." For four days in the Swiss Alps, the leaders of the world's governments and companies gathered to discuss a technology-driven transformation that the forum's founder, Klaus Schwab, says is unlike anything humanity has faced before. The meeting is the January 2016 story, and the story is the lesson: the leaders who understand the change are the leaders who will survive it.

The Fourth Revolution is the subject of this article: what the theme means, why the world's elites chose it, what the meeting said about the future of work and technology, and what it tells us about the gap between the pace of change and the pace of institutions. The meeting ran from January 20 to January 23, and the conversations are still echoing. This is the story of the revolution, and the story is about the moment the establishment realized the machine was ahead of them.

1. The Theme

The theme of the 2016 meeting was chosen with care, and the choice itself was news. "Mastering the Fourth Industrial Revolution" was the title of Schwab's book, published in January 2016, and it became the frame for every session in Davos. The forum's founder argued that the world is in the middle of a transformation as significant as the first industrial revolution, and that the transformation demands a response from the leaders who will be shaped by it.

The theme was a statement about the moment. The first industrial revolution brought steam, the second brought electricity, and the third brought electronics and information technology. The fourth, in Schwab's telling, is the fusion of the digital, the physical, and the biological: artificial intelligence, robotics, the internet of things, 3D printing, and biotechnology, all arriving at once and reinforcing each other. The theme was the argument, and the argument was that this time is different.

2. The Speed

The defining feature of the fourth revolution, according to the Davos conversation, is speed. The previous revolutions took generations to unfold, and the fourth is moving at the pace of software. The mobile internet, the cloud, and big data are the enabling layer, and the layer is thickening by the month. The speed of change is the reason the old models of adaptation do not work, and the reason the meeting mattered.

The speed is also the source of the anxiety. The leaders in Davos were not worried about whether the change was coming; they were worried about whether they could keep up. The institutions of society, the schools, the regulators, the labor markets, the welfare states, were built for the pace of the previous revolutions, and the fourth revolution is moving faster than the institutions can adapt. The speed was the headline of the meeting, and the headline was uncomfortable.

3. The Jobs

The future of work was the question that dominated the corridors of Davos, and the question was urgent. The automation of knowledge work, the rise of robots, and the transformation of every industry raised a simple and terrifying question: what will people do? The sessions debated whether the fourth revolution would create more jobs than it destroyed, and the debate was honest about the uncertainty. The answer, the meeting concluded, would depend on choices, not on fate.

The anxiety about jobs was grounded in the scale of the change. It was not only factory workers who faced displacement this time; it was drivers, clerks, analysts, and professionals. The skills that had been built over a career could become obsolete in a decade, and the education systems were not ready to retrain at the speed required. The jobs question was the human face of the revolution, and the human face was worried.

4. The Inequality

The second great concern of the meeting was inequality, and the concern connected technology to politics. The gains of the digital economy were concentrating in the hands of the few, the platforms, the investors, and the highly skilled, while the many faced stagnant wages and disappearing work. The revolution, the Davos conversation suggested, could widen the gap between the winners and the losers of the global economy, and the gap could poison the politics of every country.

The inequality concern was also a warning about the stability of the system. The previous industrial revolutions had produced the institutions that made capitalism tolerable, the labor laws, the safety nets, the education systems, and the fourth revolution was arriving before the equivalents had been built. The leaders in Davos talked about inclusive growth, and the talk was the sound of the establishment trying to get ahead of the discontent. The inequality was the shadow over the meeting, and the shadow was long.

5. The Technology

The technology itself was the star of the meeting, and the technology was everywhere in the conversation. Artificial intelligence was the theme within the theme, with the leaders of the world's largest companies debating what the machines would do next. The internet of things, the mobile internet, and the cloud were the infrastructure of the revolution, and the leaders of the infrastructure companies were treated like the royalty of the new economy.

The technology was also the source of the meeting's optimism. The revolution, the optimists argued, would bring longer, healthier, more productive lives, and the tools to solve problems that had seemed unsolvable. The same artificial intelligence that threatened jobs could cure diseases, optimize energy, and teach the world's children. The technology was neutral, and the neutrality was the challenge: the outcome would depend on the choices of the leaders in the room.

6. The Leaders

The meeting was an assembly of the people who would make the choices, and the assembly was impressive and imperfect. Around two and a half thousand participants gathered in Davos: heads of state, chief executives, central bankers, academics, and the leaders of civil society. The technology companies sent their top executives, from Microsoft to Facebook, and the platform giants shared the stage with the presidents and the prime ministers.

The presence of the leaders was the point of the forum. The World Economic Forum exists to bring the people who run things into the same room, and the annual meeting is the room. The conversations in Davos are informal, and the informality is the magic: the deals, the alliances, and the understandings formed in the corridors matter more than the sessions on the agenda. The leaders were the audience for the theme, and the theme was the message.

7. The Skeptics

The skeptics were part of the meeting too, and their questions kept the conversation honest. Some argued that the "revolution" was an overstatement, that the changes were an acceleration of the third revolution rather than a new one, and that the hype served the interests of the technology companies. Others argued that the meeting was the wrong place to solve the problems, a gathering of the very elites whose power the revolution was destabilizing.

The skepticism was healthy, and the skeptics made the theme more interesting. The question was not whether the changes were real; the question was whether the frame helped or hurt. The skeptics worried that the language of revolution made the change sound inevitable, and that inevitability could become a self-fulfilling excuse for inaction. The skeptics were the counterweight, and the counterweight was valuable.

8. The Lesson

The lesson of Davos is that the pace of technology has outrun the pace of institutions, and the gap is the defining problem of the era. The leaders who gathered in the Alps understood the change, and the understanding was the first step; the next steps, the education reform, the regulatory update, the social contract, had barely begun. The meeting was a diagnosis, and the diagnosis was the beginning of the treatment.

The lesson for leaders everywhere is that the fourth revolution does not wait for permission. The changes are arriving through the market, through the devices in everyone's pockets, and through the choices of billions of individuals, and the institutions that adapt will thrive while the institutions that resist will struggle. The meeting was the January 2016 story, and the story is the lesson: the revolution is already here, and the only question is who will master it. The theme was the warning, and the warning was the opportunity. For the leaders in every industry, the work begins with a simple audit: which parts of the business are built on assumptions the technology has already made obsolete. The institutions that start the adaptation now, while the change is still young, will be the institutions that master it. The revolution does not announce its arrival; it arrives in the products people buy and the way they work, and the arrival is already underway. The meeting ended on Saturday, and the sessions produced no single answer, and the absence of the answer was the honest part of the week. The mountain air carried the urgency, and the urgency was the point of the gathering. The leaders who left Davos with a plan, even a small one, were the leaders who understood the theme.

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