Rapidly Changing Global Economy & the Fourth Industrial Revolution

Currently, the global economy is undergoing a seismic shift, as developments in artificial intelligence, robotics, nanotechnology, biotechnology, and medicine are ushering in the Fourth Industrial Revolution.[41]  The First Industrial Revolution began in Britain around 1784, when work in key industries, like textiles, became mechanized and powered by steam and water—meaning that machines performed the work that people used to do by hand.[42]  The innovations of the Second Industrial Revolution in the late 1800s were the advent of electricity and mass production by an assembly line, characterized by Henry Ford’s assembly line production of the first affordable car—the Model T.[43]  Then, the Third Industrial Revolution began in the 1960s, when information technology and computing gradually enabled people to access vast amounts of digital information, and to perform calculations and analyses in laboratories—and eventually home computers—that were previously impossible.[44] 

Now, the world is on the cusp of the Fourth Industrial Revolution, when our new technologies and innovations are “connecting the physical, digital and biological worlds” in a way that will change nearly every field and industry, and how our economies and countries function.[45]  Previously separate fields—like medicine and computing—are converging and benefitting from advances in artificial intelligence and robotics, enabling advances in science, medicine, and technology that were not even conceivable a generation ago.[46] 

Much of this change is driven by the enormous expansion of automation of both everyday tasks and production that used to be performed by people.  For instance, it is estimated that 95% of the cars sold twenty years from now will be self-driving vehicles, profoundly changing transportation and everyday life.[47]  The significant expansion of automation and robotic technology could displace up to one-third of people working by 2030.[48]  Even with a more conservative estimate, between 75 and 375 million people worldwide (3% to 14% of the global workforce) will need to change careers within the next decade.[49]  These profound changes to the economy and workforce will impact the next generation, as about two-thirds of children in elementary school “will ultimately end up working in completely new job types that don’t yet exist.”[50]

As the world’s leading technological innovator, the United States will be one of the first nations impacted by this revolution and its effects on the workforce.  Already, 46% of employers in the United States report challenges in filling job openings,[51] and it is projected to become even more difficult to recruit for fields like health care, professional services, and transportation and infrastructure over the next decade.[52] 

New Jersey will be particularly impacted because the state’s largest industries—which employ most residents and generate most of the state’s economic activity—are the very industries that are undergoing the most change: (a) bio/pharmaceuticals and life sciences, (b) transportation, logistics, and distribution, (c) finance, (d) advanced manufacturing, (e) health care, and (f) energy.[53]  Over the next five to ten years, New Jersey will need to ensure that its workforce is prepared to fill the positions in these industries, or risk losing companies and industries to other states with a better-trained workforce.[54]

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