The next big thing

Putting aside our natural fascination with the next big things, the entire reason for getting excited about these industrial revolutions is that, purportedly, they make us better off. Certainly, the first (1760-1850) had set the precedent with dramatic increases in the GDP per capita in the industrialising countries, a trend that continued with the second (1850-1910) based on more complex technologies, such as the internal combustion engine and electricity. However, it should be noted that the take-off of the industrialised world went hand-in-hand with a marked divide between the West and the rest: The first two industrial revolutions gave rise to the industrial haves and have-nots.

Of course, we can look back and ask: Why were Britain and Europe the lucky ones? Why didn’t the revolution begin or even spread elsewhere? There is, of course, no end of theories. Was it Calvinism that encouraged rationality, pragmatism and material gain that promoted industriousness and entrepreneurship? Did Europe get an irreproducible benefit from centuries of colonial plunder at the expense of the have-not societies? Was it “open science”, the Renaissance, the decline of monarchy and inclusive governance? Was Jared Diamond right when

he cited the advantage of geography, climate and natural resources? The real answer is probably a systemic one — some combination of many factors.

Regardless of the reasons for asymmetric development, the third revolution — the one based on digital technologies — was supposed to have been the redeemer of these past sins or systemic advantages; it was meant to be the first truly trickle-down revolution, if you will. Enthusiasts have talked excitedly about the benefits of the simple act of putting mobile phones in people’s hands.

Unfortunately, the third revolution is yet to deliver on its trickle-down promise. Our research on the state of the digital planet suggested that countries around the world are not only at very different stages of digital

evolution, they are also moving at very different speeds. The World Bank’s World Development Report (January) confirms these asymmetries with some sobering statistics: 4.4 billion people have never been online, almost two billion are untouched by digital technologies and 400 million live outside the mobile cellular signal range. Eighty per cent of India has not been online; a little over 70 per cent of Africans have never been online. Even where digital technologies have reached, the economics makes it unreachable. One GB of mobile data in Botswana costs more than twice that of Germany, while fixed-line broadband is 35 times as expensive in Indonesia as it is in Germany.

The third industrial revolution may even have been a bit of a waste on the beneficiaries of the first two industrial revolutions. There are serious questions about how useful these technologies have been for increasing productivity in the industrialised world. According to economist Robert Gordon, the average growth of output per worker in the US was 2.3 per cent a year between 1891 and 1972, a rate matched only briefly between 1996 and 2004, before falling to 1.3 per cent between 2004 and 2012. Granted that not all benefits of digital technologies are captured by productivity statistics; yet, this data is quite damning. In contrast, in the have-not countries, the impact could look very different simply because digital technologies can help these nations play catch-up.

In sum, while the historian Arnold Toynbee may have started popularising the idea of the industrial revolution back in the 19th century, these revolutions — all three of them — are not widely distributed even in the 21st century. My suggestion to our world’s visionaries for the next Davos agenda: Let’s put more innovative energy against getting industrial revolutions, one through three, and their spread to the next six billion. If countries, such as India, with a hundred times the population of 19th century Britain, can get to the first industrial revolution, through Make in India or some other form of catch-up, double its GDP per capita in a tenth of the time that it took Britain and, simultaneously, manage the burgeoning disasters of urban pollution, water shortages and chronic diseases en route — that alone would be revolutionary. Rinse and repeat in other parts of the have-not world. Then we might have a fifth industrial revolution on our hands at a scale thousands of times that of the first. It might even eclipse the impact of the fourth that was all the rage at Davos this year.