The reason they’ll be using that phrase is that it was coined by Klaus Schwab, the guy who runs Davos. It’s conceptually a bit murky, but as he puts in in his book The Fourth Industrial Revolution, what it basically what it comes down to is:
- There is a “staggering confluence of emerging technology breakthroughs, covering wide-ranging fields such as artificial intelligence (AI), robotics, the internet of things (IoT), autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage and quantum computing, to name a few.”
- “Many of these innovations are in their infancy, but they are already reaching an inflection point in their development as they build on and amplify each other in a fusion of technologies across the physical, digital and biological worlds”.
This second point leads Schwab to suggest that the Fourth Revolution is different from the Third because “contrary to the previous industrial revolutions, this one is evolving at an exponential rather than linear pace”. This leads to all sorts of talk about disruption, job-killing robots, mass unemployment, and that tech-bro favourite, universal basic income to keep the plebs fed and clothed once the job-killing robots have done their thing. (In fairness, Schwab is not quite as much of a swivel-eyed loon about this as some of the hacks who have glommed on to this intellectual shtick)
This all sounds fine and dandy and there is only one real problem with this argument. Namely, that it is bollocks, in ways that become obvious to anyone with the inclination to look at data rather than repeat trite nonsense.
Let’s start with the job-killing robot issue. If the economy were under relentless assault from automation, it would show up first in the unemployment statistics. So below in Figure 1, I plot a 6-month rolling average of the number of new unemployment claims as a percentage of the actual labour market. It shows that new unemployment claims are relentlessly decreasing as a fraction of the overall labour market.
Figure 1: New Unemployment Claims as a Percentage of the Labour Market, Canada, 2000-2019