The Source March 2020

FUTURE ECONOMICS
THE FUTURE
OF ECONOMICS
“We stand on the brink of a technological revolution that will fundamentally alter the
way we live, work, and relate to one another. In its scale, scope, and complexity, the
transformation will be unlike anything humankind has experienced before. We do
not yet know just how it will unfold, but one thing is clear: the response to it must be
integrated and comprehensive, involving all stakeholders of the global polity, from
the public and private sectors to academic and civil society.”
Professor Klaus Schwab, Founder and Executive Chairman of the World Economic
Forum (WEF) made this statement in 2015. The WEF organizes the annual conference
in Davos enabling global leaders to look over the horizon. The WEF connects
the future of economic progress to several developments that together determine the
direction, speed and success of economic development. Hereby she mentions Taxation
and sustainable growth, Globalization, Economics of environmental sustainability,
Economics of the fourth industrial revolution, Inclusive growth and Productivity
and competitiveness.
These developments will be reviewed in the upcoming articles, and the implications
for economic developments in Aruba will be examined. This first article will introduce
you to the fourth industrial development.
The fourth industrial revolution concerns a world in which people facilitate their
lives by moving between digital domains and offline reality with the help of connected
technology devices.
The first industrial revolution changed our economy and the way we live from an
agricultural and handicraft economy to an economy of industry and machine production.
Mass production became possible using oil and electricity in the second industrial
revolution. In the third industrial revolution, information technology was used
to automate production. Every industrial revolution is often considered as a separate
event. However, we can better understand the revolutions if we see them as a series
of events that build on innovations from the previous revolution that have led to more
advanced forms of production.
The start of a fourth industrial revolution, building on the previous one, is clearly
visible. The new revolution is characterized by a fusion of technologies that blur the
lines between the physical, digital and biological realms. There are three motives that
clearly indicate that it is not a deepening or extension of the third revolution, but rather
the arrival of a fourth and new revolution: speed, scope and system impact. Current
technological developments and breakthroughs are evolving at an exponential pace,
instead of a linear pace. Moreover, it affects almost every industry in every country.
And the breadth and depth of these changes herald the transformation of complete
systems of production, management and governance.
The possibilities created by the fourth industrial revolution are promising and exciting
on the one hand and frightening on the other. Consider the unprecedented possibilities,
now that billions of people are connected to each other through their mobile
devices and computers with greater processing power and storage capacity than ever
before. These possibilities are furthermore reinforced by new technological breakthroughs
in all kinds of areas. These include 3-D printing, nanotechnology, artificial
intelligence, the Internet of Things, autonomous vehicles, robotics, biotechnology,
and quantum computing.
We may not think about it, but artificial intelligence (AI) is already around us, from
self-driving means of transport and drones to virtual assistants. We all know Apple’s
personal assistant Siri, and Alexa is becoming our smart home-hub, helping us scour
the web for information, shop, schedule appointments, set alarms and doing a million
other things for us. Amazon is using AI in order to predict in a very smart way just
what we are interested in purchasing based on our online behavior. Recently AI is
even used to write novels and helping screen writers in a fascinating way.
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