The Fourth Industrial Revolution

Introduction to the fourth industrial revolution

Rapid advances in technology in what is termed the fourth industrial revolution will eliminate the demand for some jobs, and fundamentally restructure the kind of skills required by the labour market.

The World Economic Forum estimates that between 2015 and 2020, technological advances will result in the loss of 7.1 million jobs in 15 economies the organisation surveyed. Two-thirds of these will be office and administrative jobs.[111] By contrast, 2 million jobs will be created in smaller job categories mostly in the computer, mathematical, architecture and engineering fields, and generally in high-skilled categories. Overall, this constitutes a net loss of roughly 5.1 million jobs due to the changes brought about as part of the fourth industrial revolution.

Both the global and local economies have entered the fourth industrial revolution, what the World Economic Forum describes as, “a technological revolution that will fundamentally alter the way we live, work, and relate to one another”.[112] Technologies driving this revolution include mobile communication and the internet, artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3D printing, nanotechnology, biotechnology and quantum computing (amongst others), as well as the confluence among these new technologies.[113]

Three characteristics of this trend distinguish it from previous revolutions: velocity - the pace of transformation is extremely rapid; breadth and depth - the impact of changes is extremely wide-reaching and will transform virtually all aspects of life; and its systems impact - because it will cause (and is already causing) changes to entire systems within companies, industries, countries and the global economy.[114]

Signs of this revolution are already apparent. For example, sales of industrial robots rose to a record 248,000 in 2015, up 105% from 121,000 in 2010, according to the International Federation of Robotics.[115] By 2018, it is estimated that 2.8 million robots will be operating in factories around the world.[116]

The automotive industry is at the forefront of this automation of production, but the metal, plastics and rubber, and electronics industries also showed strong growth in the acquisition of robotics in 2015.[117] Automation will also increasingly occur in the services industry, with machines able to take over jobs such as cleaning and maintenance. The arrival of cars, trucks, boats and airplanes that are fully or partially autonomous will also revolutionise the logistics industry.[118]

Figure 5.6
Source: International Federation of Robotics, 2016[119]
Figure 5.6: Worldwide annual supply of industrial robots (2000-2015)

Additive manufacturing, or 3D printing, is also changing the way we produce goods. The capabilities of 3-D printing hardware are developing quickly. They can build larger components, are becoming more precise and can print at higher speeds and lower costs.[120] Besides changing the way a wide variety of parts are manufactured, 3D printing is also in use in healthcare, and printed body parts are estimated to have garnered USD 537 million in 2014.[121]

Digital developments are affecting virtually all industries. Digital consumers have access to products from around the world at their fingertips, heightening competition among manufacturers and retailers. New technologies that are adopted by the masses rapidly have the potential to undermine products and reduce product life cycles, and the cost of distributing digital products and services is virtually nil.[122] Consider that the world’s largest taxi company, Uber, owns no taxis.[123]

Uber is part of what is considered “the sharing economy” – technologies that have allowed new connections and commercial exchanges between ordinary people. Another example is Airbnb –people using an online platform to let their properties to strangers for short periods of time – which is already impacting the traditional hospitality industry.[124]

New technologies also allow the collection of quantities of data not imagined before. Half the world’s data was created in just the last ten months.[125] Firms are tracking bank accounts, medical records, employment files, people’s web searches purchase histories, home temperatures, acceleration speeds in of drivers in cars, and the list goes on.[126] Firms can harness this data to tailor and personalise their services on a level never before achieved.[127]

These are just some of the ways development of the fourth industrial revolution are changing the way economies work.


With increasingly rapid developments in these fields, concerns have arisen around their impact on labour, and whether they will result in so-called “technological unemployment”, as technology is increasingly able to replace human labour. Erik Brynjolfsson and Andrew McAfee, authors of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies argue: “As recent advances suggest, it’s no longer pure science fiction to contemplate completely automated mines, farms, factories and logistics networks supplying all the food and manufactured goods a population could require.”[128] Replacing labour with technology saves companies wages they would otherwise have to pay, and can boost productivity due to longer hours worked.

Machine learning

Machines are now able to perform cognitive task too. They can identify the content of photographs with a smaller error rate than humans and can understand voice commands.[129] Robots are already being used in warehouses to assemble orders.[130] Self-driving cars may one day soon eliminate the need for taxi drivers.[131]

Whether or not one’s job is threatened by technology no longer depends solely on whether it entails manual or cognitive work, but on whether that work is routine. If it entails regular and relatively unvarying work, a machine can probably do it, and do it better, even if this work previously required a highly skilled human. For example, a new radiology system was 50% better at identifying malignant tumours in CT scans than expert radiologists.[132]

Figure 5.6
Source: The Economist, 2016[133]
Figure 5.7: Probability of computerisation of different occupations (2013)

There are still many tasks humans can perform better than any machine yet in development. Physically, humans are more agile and quick than any piece of machinery. Mentally, we are still better at innovation – coming up with useful new ideas.[134] For instance, two jobs in which significant growth is expected are data analysts, to interpret the increasing technologies, and specialised sales representatives, to explain intricacies of increasingly specialised goods to potential buyers.[135] In this regard, at least for the foreseeable future, technology will not completely replace human labour.

Developing futureproof skills

At the same time, technological advances will bring about, and are already causing, significant disruptions in the labour market between job categories and functions that will reduce the demand for types of labour performed better and most cost-effectively by technology. They will create new jobs that require novel and unique skills. The WEF estimates that 65% of children entering primary school now will one day have types of jobs that do not yet exist. In order to avoid mass technological unemployment, a rapid effort must be made to re-skill and up-skill the workforce to meet these changes. As the World Economic Forum’s (WEF) Future of Jobs report puts it: “Without urgent and targeted action today to manage the near-term transition and build a workforce with futureproof skills, governments will have to cope with ever-growing unemployment and inequality, and businesses with a shrinking consumer base.”[136]

Table 5.36: Net employment outlook by job family across 15 countries surveyed (2015-2020)

Job gains Job losses
Business and financial operations 492,000 Office and administrative -4,759,000
Management 416,000 Manufacturing and production -1,609,000
Computer and mathematical 405,000 Construction and extraction -497,000
Architecture and engineering 339,000 Arts, design, entertainment, sports and media -151,000
Sales and related 303,000 Legal -109,000
Education and training 66,000 Installation and maintenance -40,000
Total 2,021,000 Total -7,165,000

Source: World Economic Forum, 2016[137]

Recommended action

The World Economic Forum proposes the following actions for different role players to capitalise on the revolution:[138]

  • Governments will have to innovate in education and labour-related policymaking
  • The education and training sector will have to adapt to rapid changes in skills requirements and provide new services, itself likely generating employment in this process
  • The private sector will need to be proactive in prioritising talent development and future workforce strategy.

The forum warns: “Firms can no longer be passive consumers of ready-made human capital.”[139] Instead, they will need to take a number of concrete steps:

  1. Reinvent the HR function to be proactive and innovative in skills-building and talent management and use new kinds of analytical tools to monitor and predict talent trends and skills gaps
  2. Make use of data analytics to map emerging job categories, future redundancies and changing skills requirements that will allow companies to talent repurposing strategies
  3. Talent diversity issues can no longer take a back seat
  4. Cater for flexible work arrangements that will increasingly see connections between employers and employees happen via digital talent platforms.[140]

Beyond this, the rapid pace of change will necessitate a fundamental restructuring of education systems to make them more responsive to emerging requirements in the labour market. They will also need to prepare candidates with sufficient technical and practical knowledge to be able to function in the changing world of work.

What this means for Africa

The fourth industrial revolution will likely have a significant impact on African countries, whose youth populations are large compared to those of developed countries, and who will experience an influx of young people into their labour markets for the next decades. In addition, the fact that many African countries have not yet experienced the third industrial revolution and become industrialised countries complicates the effect the fourth industrial revolution will have on them. According to Gary Coleman of Deloitte, these conditions are precisely what will allow African countries to “leapfrog directly to cutting-edge         technologies”.[141] This could provide them with a significant advantage in that they could avoid first investing in outdated infrastructure of the third industrial revolution. According to Coleman, this approach is already being embraced all over the continent.[142]

Technology in agriculture and health

Digital technology is being used in a variety of ways in African agriculture. More than 70% of African farmers have used some form of information and communications technology.[143] For instance, Digital Green is an organisation that broadcasts training videos to farmers in local languages in Ethiopia, Ghana, Mozambique and Tanzania.[144] Another company, Ujuzikilimo, uses sensors to test soil provides farmers with real-time information on soil quality and advice on what crops and fertilisers to use.[145] Advances in biotechnology, specifically genetics, have allowed for the fortification of rice in Ghana, maize in Zambia and sweet potato in several other countries with Vitamin A to help combat malnutrition.[146]

In 2015, 73.5 out of every 100 Africans had a mobile phone subscription.[147] This has allowed the proliferation of programmes using mobile phones to bridge the gap between patients and doctors, who are often very far apart. One such mHealth initiative in Ghana uses mobile phones to give mothers access to health information to improve maternal and child health.[148] In Mozambique, SMS reminders are sent to HIV positive persons to help improve adherence to treatment plans and reduce mother-to-child transmission.[149] In Nigeria, health remote health facilities use mobile SMS technology and battery-operated printers to print test results without access to computers.[150] But innovations have gone further than mobile phone technology: In Cameroon, where some live up to 900km from the nearest cardiologist, a young engineer designed a programme for a tablet, the Cardiopad, that monitors heart signals and sends them to a cardiologist who can interpret them.[151]

Premature de-industrialisation

Not all outlooks are as positive. Many are sceptical as to whether developing countries can leapfrog the third industrial revolution. Instead, they suggest current advances in technology may see these countries being left further behind. Many of these developing countries have hoped to follow the developed world’s path, and drive job creation and economic growth by stimulating their manufacturing sectors. But the new technologies of the fourth industrial revolution may be changing the economics of development for good.[152] Increasing automation means that the manufacturing sector is likely to generate fewer jobs than it used to.[153] One Harvard scholar has termed this phenomenon “premature de-industrialisation”.[154]

As the use of technology increases and the demand for low-skilled labour dwindles, competition among labour-rich countries to attract manufacturing companies will become fiercer. This may result in a race to the bottom, where wages decrease and labour protections diminish in the competition between developing countries to attract manufacturing firms outsourcing production to benefit from cheap labour and lax labour regulations.

This dilemma is exacerbated by the unusually high number of entrants to the labour market in many African countries that have large and rapidly growing youth populations. In 2015, 43% of sub-Saharan Africans were under the age of 15.[155] Given that low-skilled jobs will decline and the demand will shift toward higher skilled jobs, it will be crucial to upskill these future entrants to the labour market. Specifically, it is vital that skills in the fields of science, technology, engineering and mathematics are bolstered, as these are the fields in which job growth will take place.

Africa’s position is thus ambiguous: on the one hand, it may have opportunities to leapfrog the third industrial revolution in some sectors. But on the other, countries faced with a massive influx of young people into the labour force will no longer be able to follow in the steps of developed countries and rely on manufacturing to create enough jobs to pull their populations out of poverty. Instead, they more than others will need to invest heavily in equipping their populations with the skills to find employment in the changing circumstances brought about by the fourth industrial revolution.

  • Country Profile
  • Introduction
  • Broad Economic Indicators
  • Currency and Exchange Rate
  • Competitiveness and Ease of Doing Business
  • Foreign Investment and Largest Companies
  • Foreign Aid
  • Country Strategic Framework
  • Summary of Economic Conditions
  • Implications, Challenges and Recommendations
  • Population
  • Living Standards and Poverty Levels
  • Healthcare
  • Implications, Challenges and Recommendations
  • Qualifications Profile of the Population and Workforce
  • Levels of Schooling and Basic Education
  • Technical and Vocational Education and Training
  • Tertiary Education
  • Innovation in Egypt
  • Implications, Challenges and Recommendations
  • Labour Force
  • Employment by Sector
  • Employment by Skill Level
  • Employment by Occupation
  • Labour Productivity
  • Unemployment and Job Creation
  • Expatriates, Immigrants and the Egyptian Diaspora
  • Wage and Salary Trends and Social Insurance
  • Industrial Relations Framework
  • Labour Market Efficiency
  • The Fourth Industrial Revolution
  • Implications, Challenges and Recommendations

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