Korea must step up to join the drive for fourth industrial revolution

Korea must step up to join the drive for fourth industrial revolution. January. 22, 2016 08:11. by 허문명국제부장 angelhuh@donga.com.

During the World Economic Forum (WEF), which was hosted on Wednesday, in Davos, Switzerland, economists diagnosed that the world economy is precariously balanced between continued recovery and a third leg of crisis from the global financial crisis in 2008. The main agenda at the WEF was the on-going issue surrounding expanding volatility including the developing world’s “money exodus,” structural risks of the Chinese economy, plunging international oil prices, and global debt crisis. The global leaders in Davos stressed the pivotal role of a “fourth industrial revolution” as a way to address the risk factors of the global economy.

The mechanization realized by the steam engine in the 18th century ushered in the first industrial revolution, which was followed by the second revolution marked by mass production introduced in the early 20th century. Having witnessed the third revolution brought about by computers and the Internet in the late 20th century, the economists are pointing at the conversion of information and communications technologies (ICT) as key to the next industrial revolution. AI robots, Internet of Things (IoT), 3D printers, unmanned vehicles, nano/bio technologies, material science, quantum computer engineering, and other applications are emerging as solutions to a host of challenges such as demographic aging and climate change. This has a potential to dramatically change not only our industries, society, or governing system but also the way we live.

The fourth industrial revolution is capable of boosting efficiency and productivity to a remarkable extent, but it also poses a potential threat in that it could worsen disparity of wealth and cause a “job shock.” In its Future of Jobs Report, the WEF predicted that the fourth industrial revolution will wipe out five million jobs over the next five years. As evidenced by the case of the fully-automated hotel that was opened in July last year at Huis Ten Bosch, the largest theme park in Japan, it is the skilled white-collar workers that are most likely to bear the brunt of the job shock.

At Davos Forum, Chairman Axel Weber of UBS, the largest bank in Switzerland, said What is most important in the fourth industrial revolution will be the flexibility of labor market. Countries that failed to achieve labor reforms will inevitably lag behind.” The Swiss bank presented a list of countries which it saw most capable of going through the fourth revolution, and Korea stood in the middle at 25th. On the crucial front of the flexibility of labor market, the country lagged far behind at 83rd. The world is going toward a new beginning, and those who are standing in the way of passing labor reform bills in Korea are putting a drag on the country.