The Fourth Industrial Revolution: How And When Will You Lose Your Job?
by Santiago Mengual
One of the sectors that will harshly suffer the technological transformations of the 21st
century will be the jobs that employ the need of human manual work. This is the The Fourth
Industrial Revolution. Seen from another perspective this socio-economic transformation not
only will bring dismay to the human worker, this changes in the economic model will also
lead to the creation of new job positions which offer better opportunities for economic
prosperity, and social progress, yet the chance of acquiring this new and better job positions
depend crucially on the ability of all concerned stakeholders to instigate reform in education
and training systems, labour market policies, business approaches to developing skills and
A machine is better than you.
Machines are far more capable than humans to carry out designated jobs. Automated Robots and AI have overcome humans in almost every skill required for labour. They have the ability to work without needing a break, sleep, or even vacations. They can work overtime without complaints and produce more than human workers in a shorter time frame. The tasks that robots do are performed with high precision, which also means that defects will be avoided, or if not, will be greatly reduced. Cost effectively, a robot may seem a little expensive to have initially, a huge investment would be needed and some maintenance costs here and there. However, they do not require monthly salaries, healthcare provisions, insurances, bonuses, and even commissions. Their effectiveness, quality and reliability has become an economical attractive that has inspired private companies and governments to invest more in industrial robots.
Automation’s repercussions on labour.
The sharp replacement of human labour by mechanized entities will bring a transformation
with significant consequences on human employment. Workers who performed labour related to manufacturing will be the ones that have been more affected by automation. Most work in the sectors regarding transport, construction, maintenance, and office and administration work will be displaced by industrial robots.
Figure 1. Automation’s impact on the jobs market will start to be felt from the mid-2020’s.
In the next two decades machines will primarily replace low-skilled jobs moving into
factories and manufacturing industries. The most repetitive, mechanized jobs will be the ones that have been replaced the most.
Yet, in spite of the massive amount of jobs that will be lost to machines, at a global level, new jobs will be created at the rate they have been destroyed. “Throughout history, technological innovations have enhanced the productivity of workers and created new products and markets, thereby generating new jobs in the economy”.
However, these new jobs will require higher education, and consequently only high income
social sectors will be able to acquire them. This will bring a massive increase in income
inequality worldwide, where the rich account for the great majority of the population with the opportunity to thrive from the new jobs created by the Fourth Industrial Revolution. The
amount of the population that lack these opportunities will translate into an increase in crime
indicators and protests all around the world due to the lack of opportunities and income
Figure 2. Percentage of jobs with a high potential of automation by education level.
Policies and systems to deal with the consequences.
As the majority of the jobs that will be displaced are process-driven jobs, such as
manufacturing, customer service and transportation, while machines do mechanical work that can and will be automated, humans will need to work on fields and positions that require a creative process or a need for human assistance and interaction. Displaced workers could potentially get re-trained to apply their skills elsewhere. Governments and other organizations may offer training courses to these workers to potentially build on their existing skills, develop new ones and work in different areas.
Another alternative can be the Universal Basic Income, this concept is “a periodic payment
delivered to all on an individual basis without work requirement”. A salary for just existing.
Worldwide this concept has not yet been formally implemented in any nation. Still,
experiments have been conducted in places such as the US, Canada and East Africa. Many of these experiments have shown drops in poverty, crime, and hospitalizations, but the
experiments often have many limitations and there aren’t any conclusive results.
Finally, there's Robot Tax. Idea that originates from the fact that machines who have replaced workers don’t generate tax revenue. Substantially diminishing state budget and funds available for governmental social and welfare programs.
The challenge for governments is finding a way to encourage the innovation that the robots
promise while making sure they don't cause new divides in society. Bans often create worse
situations than allowing people to innovate. The ban or barrier that governments will impose
on corporations through Robot Taxes, though controversial, should be considered, as the
main purpose of a Robot Tax would be to serve as a legal strategy to disincentivize
corporations from the the replacement of workers by robots, and increase government budget on social safety for those who are displaced. Yet, these would come at the cost of diminishing technological innovation and neglecting the opportunities for economic growth. The European Union, for instance, rejected the idea in 2017. “to introduce a robot tax would have a very negative impact on competitiveness and employment,” said the Frankfurt International Federation of Robotics.
Governments and companies have been tempted to only focus on the benefits of innovation
and progress, while largely ignoring its negative impacts. Low-income countries are
particularly vulnerable unless policymakers have a clear understanding of the risks and
potential of these new technologies. For the next decades, the debate on automation will
focus on designing labour market policies, social security schemes and taxation systems
which don't come at the cost of hindering economical and technological growth.
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