What Impact will the Fourth Industrial Revolution have on Future Employment?

Updated: 3 hours ago

Written by: Estefania Navarro


The discussion on how will “The Fourth Industrial Revolution” affect employment in the next years has increasingly been a topic of many debates lately. It has and will continue changing the way we live, we work, the way the economy works and how we are governed (World Economic Forum, 2016).

As many economic journals have reported, this is already happening. The Financial Times reported in 2016 that between 2000 and 2010, of all the jobs lost in the US, 85% had been lost over new technologies. The Bank of England stated that two thirds of all jobs were capable of being automated within the next 20 years. It is therefore evident that the Fourth Industrial Revolution has already come and that it has already impacted the workforce increasingly during the last decade (World Economic Forum, 2016).

The business world claims to be adapting to the emerging new technologies and how they will affect their businesses and while this might be true in a certain amount, this revolution has to date, not been discussed or planned for. Proof of this is how big corporations tend nowadays to merge or ally with smaller start-ups. This is because these smaller businesses bring fresh ideas into the market, and big companies therefore profit for their technological expertise and take them in. Examples of this could be new self-driving technology car manufacturer Waymo who allied in 2019 with Renault-Nissan to create a self-driving car project. However, as stated in various articles, such alliance is only based on ideas and experimentation and does not have a specific project specification (Financial Times, 2019).

It could be argued that the public sector will be the most likely to be affected by these changes in technology. Different industries such as transport will be affected by the implementation of self-driving technology. Also, the retail industry workers will be affected by digitalization and the increasing use of online retail. The health industry will feel the impact from the new implementation of automated surgery machines (Privacy Sense, 2017).

What is the Fourth Industrial Revolution?

The Fourth Industrial Revolution, also known as the “Industry 4.0” is the fourth of the industrial revolutions in history. It is characterized by the creation and adoption of cyber-physical systems like the internet of things and the internet of systems (Change, 2017).

In order to understand more about the Fourth Industrial Revolution, it is essential to talk briefly about the three previous industrial revolutions as each of them introduced new resources and technologies which have led us to where we are today.

The first industrial revolution occurred in 1765 when Mechanization emerged by replacing animal and manual labor with machinery. The second revolution happened one century later, when mass production was introduced in 1870 by using electric power to create mass production. Thirdly, in 1969 the digital revolution and globalization took place thanks to the implementation of the internet and the World Wide Web (WWW) leading to the fourth and current industrial revolution taking place by emerging new technologies (Sentryo, 2017).

By comparing the fourth revolution to the other three we can find drastic differences. Unlike the previous ones, the scale, scope, complexity and transformation of the Fourth Industrial Revolution is something humankind has never experienced before until today. However, this revolution is only a prolongation of the Third Industrial Revolution only at a greater speed.

Impact of the Future of Work and Recruitment

The Fourth Industrial Revolution is mainly composed of four technological aspects: high-speed mobile internet, artificial intelligence and automation, the use of big data analytics, and cloud technology. It has been discussed that the two aspects that will have the biggest impact on employment and its future are AI and automation.

A study released by Mckinsey Global Institute revealed that one fifth of the global workforce will be impacted by the integration of AI and automation. Having a bigger impact in countries such as Germany, the US and the UK. Furthermore, by 2022, companies will decrease their numbers of full-time employee members by 50% and by 2030, robots will replace 800 million workers worldwide (Change, 2017).

Even though these numbers might sound scary, this might just mean that these changes within the workforce could also experience a positive impact. The employees with the right skills that have been replaced could take on more beneficial roles.

The World Economic Forum revealed that 38% of businesses believe AI and automation technology will allow people to take on to new motivating and productivity enhancing roles, meanwhile 25% of companies believe this will result in the emergence of new roles for people to take on (World Economic Forum, 2017).

Industries More Likely to be Impacted

With the integration of AI and automation technologies, some industries will adapt better than others. The industry that will more likely be affected by these changes in technology is the manufacturing and agricultural industries. This is because many of its job positions have already disappeared or significantly decreased over the last few decades (from the 1970’s) due to the increase of automation. Robots can safely handle tasks within industrial plants without putting in risk anyone’s safety.

Other industries such as retail, food preparation or transport will likely be hugely impacted by it as well. The retail industry is facing great changes with the increase of use in online retail by users and digitalization. Therefore, this leaves businesses with less need of having physical stores, which is why many brands close them, or reduce their number of physical stores to a minimum.

This is already happening, in August 2019, Karen Miller closed all their physical stores and sold their brand to online retailer Boohoo.com for £18 billion leaving 11.000 at risk (S. Butler et J. Jolly, 2019). Meanwhile, other brands such as Zara have incorporated self-checkouts outside their fitting room in some of their stores replacing then cashiers in order to improve efficiency.

Moreover, the food industry is facing internal changes as well as shown in the graph above it is one of the most impacted industries by automated technology. Fast food chains are already operating with robots, such as Macdonald’s who have implemented a self-checkout system using machines.

However, cash points have not been completely replaced, as they have maintained their traditional cash payment option. Also, robots are already being used in the kitchens of fast food companies such as the robot Flippy, who as the name indicates it’s in charge of flipping hamburgers non-stop (R. Premarck, 2018).

Industries Less Likely to be Impacted

Some jobs that will likely never be able to be replaced by automated technology are artists and creatives. (T. Pickersgill, 2018). This is because as Tom Pickersgill, CEO of Broadstone says: “Humans use their life experiences, their emotions and their creativity to bring things to life. While robotics and AI uses data to learn and improve.” That is something that will never change unless adding emotions to a robot machine is achieved.

Furthermore, data can’t really produce genuine works of art that will engage an audience through shared experiences. Whether that is a painting, a song or simply a voice. Hairdressers, healthcare workers, caretakers, therapists and social workers, and teachers all form part of this “safe zone’ as well. Teachers, as shown in the graph above, are the less likely job type to be replaced by automated technology and AI. This is because a teacher is made of people’s skills, empathy, patience and understanding, and all these skills are essential for creating emotionally confident young people. Therefore, only a human can be capable of achieving this (T. Pickersgill, 2018).

Conclusion and Recommendations

To conclude, with the Fourth Industrial Revolution and the emergence of new technologies such as AI and automation technology, businesses are trying to adapt to the changes they are already facing and will continue to face in the future. However, this will impact employability worldwide. As analyzed throughout the report during the next few years most industries will reduce their employee rates by half. Robots will be taking place and replacing some of the current jobs which are already starting to disappear.

Other industries will remain in the “safe zone” as they require some skills and factors a robot will never be able to have, as they are human characteristics only. This change in employment doesn’t necessarily have a negative impact for the future, as these jobs could be replaced by a more motivated and enhancing job or the emergence of new jobs into society.

It would be relevant to recommend businesses to thoroughly prepare themselves for future changes, and to think about the more suitable decisions for them to enable a continuous healthy growth without the need of risking lots of jobs which would lead to employee disappointment, and a bad image of the company. Thinking about what is best for the company internally and externally and preparing for all case scenarios beforehand.

Moreover, not only businesses but people should consider these changes as well and prepare themselves to fit into the upcoming changes, preparing themselves to be able to take more technological roles etc. Students for example, should consider this when choosing what career they want to study, as this will shape their future later on.


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