Fourth Industrial Revolution and Challenges for Governments (I)

The Fourth Industrial Revolution is already all around us. It’s possible to characterize by the digitalization, Artificial Intelligence and machine learning. We will also see disruptive changes in robotics, 3D Printers, nanotechnology and biotechnology, materials science involving the discovery and design of new materials, among many others.

But the Fourth Industrial Revolution is not only about technological changes but also how deep and fast the speed will be developed. The changes will be disruptive because of the integration of knowledge and scientific disciplines. Last, the impact of the Artificial Intelligence will create new ecosystems such as the more recently named Environmental Informatics. Personal Assistants as Siri are good examples.

Actually, this revolution is different in scale, scope and complexity from any that have come before.

So, the Fourth Industrial Revolution is about Science. But right in the middle of that process we can find Governments. There are many points of view that can affirm it, some general and other very specific ones.

In the beginning there are Governments who should provide access to technology in order to have more included citizens enjoying the benefits of the new technological standards and the global society.

Secondly, Governments should be aware about the conflict between the promotion of tech improvements and assuming every consequence for the development of any public policy. Even more, there are many ethical issues involving the new technological advantages. We’ll find many changes in social behaviors that will be the consequence of new kinds of dependences because of all this new products.

The impact of Artificial Intelligence will be disruptive. Obama’s Administration was aware of the difficulties for the States and began to develop a strategy to accommodate the American Administration to the challenges of the AI.

The global companies are dramatically growing its volume. It’s very easy to find some of the global actors that are bigger than many of the GDP of the States. It is they are who are designing the new society, with a small workforce and reducing every day costs of production.

The risk of delocalization is not only more only provoked by companies anymore but also by people who have a very easy access to the Virtual Private Networks. That means the supervision powers by the State are more difficult. The deeper problem for States are is the tax optimization programs that many companies have in order to localizase localize taxes in the most competitive country.

The impact on Government is very deep and complex. We can identify at least six big issues for the next years:

1. Technology will empower citizens. That is, it will be easier for citizens to participate in the public life.  But at the same time we are witnesses to a regression of the democracy not only in countries of the former soviet bloc but also in the USA. People don’t vote as much as they did before, mostly because the consequences of their vote are not so clear.

People will participate through alternative process, as a social network. If Governments have the ability to introduce this revolution in it diary daily behavior, they will be able to have so much information about the society. The Big Brother can be very close to us. It’s an opportunity to help to design better, safer and smarter cities.

The conflict is due, among other things, to the private ownership of those social networks. Private ownership that can reduce democratic rights and limit political participation. That is what Facebook does: it’s the most important media thanks to the friendly collaboration by everyone.

But it can also be also the problem of hacker and its influence in the results of the democratic process. The concerns about the Russian influence in Trump’s election through the electronic vote is a good example. An example that gave the excuse to forbid electronic voting in the Netherlands some months after the American election. It is a good manifestation of the risk society, developed by Ulrich Beck.

2. Do we regulate algorithms? This may be a strange question for you. Regulate a mathematical formula, a list of steps to follow in order to solve a problem, and written before writing codes for computers.

But why should the Government regulate some algorithms? An example can give us the key: Algorithms are the substitute of our driver license when the self-driving cars will be on the highways. But we can’t remain on in the question of self-driving cars.

From that, algorithms must fulfill some requirements. Algorithm regulation have to articulate basic rules of planning and control; as is required in other fields of science. Public Administrations can receive reports about the industrial process and, just in case, monitor how it works. But it’s also the correct procedure for analyzing the problems and preventing them in the future. Right now we have a good example in the black boxes of the airplanes.

It’s important to note that the changes that are important in the content of the procedure but also in the procedure to adapt it. It should be simpler. It’s impossible to pass a regulation that needs such a long procedure as we have. But, also the techniques of regulation should be simpler.

Last but not least. The new requirements in the regulation can’t forget the ethics implications of every process. Science allows us to edit the human genome easier, faster and cheaper than ever… how can we do that? Or even for some people the previous question is Can/Should we do that?  It is a problem of ethics and politics, for Philosophers but also for Governments.

3. The third relevant aspect of the fourth industrial revolution in the Governments is the effect in some monetary aspects related to the money.

First, we are watching in the media how blockchains want/aim to substitute the traditional currencies. There are many problems are behind this proposal. Problems of international economic stability; problems for the economy of every single state that won’t control one typical and very important aspect of the economic policy: the monetary policy that is involved with inflation and salaries.

Second, there is a problem of trust in a decentralized currency system, where there is no State behind it. Right now we can see the bubble in this kind of systems, especially in Bitcoin.

Third, it is a problem for our tax system (and, consequently of for our welfare State that needs these funds) because it is easier to avoid the payments. And it is easier to delocalize activities in order to have a better best tax regulation.

Fourth, blockchains jeopardize the fight against money laundrying. That´s why, the Public administration in the United Kingdom wants to have the right to examine every transaction made on the internet, thanks to the Snooper Act, in order to supervise the real economic capacity of the people.

Those 3 points are the first ones that I want to refer to today Next week I will address 3 other examples of the changes that this industrial revolution will provoke in our life. It is a first approach that will be developed in other posts in the next months.

What we must retain is that this revolution is here. It isn’t a question to accept or not. This new industrial paradigm will provoke a crisis, a crisis because of the conflicts between the old and new values; the old and new behaviors and knowledge. But, as Antonio Grasmci said, that is a normal consequence of the evolution: “The crisis consists precisely in the fact that the old is dying and the new cannot be born”