The fourth industrial revolution and the Caribbean

How well will the Caribbean copewith the ‘disruptive technology’ and‘disruptive innovation’ that in less thana decade could change structurally, employment, competiveness and consumerthinking in most developed and in many developing nations?

The two expressions refer to newtechnology or innovation that helps create a new market or value network bydisrupting existing networks in ways that the market may not expect.

Put more simply it means changethrough technological advance that makes the established way of doing thingsvirtually obsolete. Its normal effect is to increase competition, reduce pricesand restructure a market in ways that often result in changing the behaviorpatterns of an existing market and how and where individuals are employed.

Some disruptive technologies arealready so well established we take them for granted, forgetting what they havedisplaced. For example, we all expect every hotel to have Wi-Fi and everynation to have near national coverage for our cellphones, and that thesetechnologies only became commonly available in the region around the start ofthe millennium.

When it comes to booking hotels,flights and car hire, we take for granted the numerous sites that havedisplaced many travel agents, and we have come to expect freedom of access toweb-based news and information which has made many print publications andnewspapers, unviable.

More recent examples areelectronic taxi hailing services, of which Uber is the best known, or Airbnbwhich enables individuals to rent out their usually privately owned propertiesto visitors. Both

relatively unsophisticatedIT-driven services are already available in parts of the region causingsignificant numbers of consumers to begin to threaten the oftenultra-conservative vested interests that operate taxi services or hotels.

Other forms of disruptiveinnovation are emerging globally.

Recent examples include bitcoin,or more likely, derivations that could lead to a transmittable global digitalcurrency beyond the control of individual states; three dimensional printingwhich, when scaled up, is capable of constructing in situ buildings includinghousing, offices, whole hotel rooms, and even weapons and body parts; and bigdata that in future will be brought together from multiple global sources toenable marketing to the individual of almost anything on a personally tailoredbasis.

What is apparent, however, isthat these are relatively innocuous developments compared to what is likely toemerge in the next twenty years, requiring responses from Caribbeangovernments, politicians, businesses, the courts, and citizens.

Of these the most challengingwill be artificial intelligence and robotics that will alter not just thenature of employment but, in the surprisingly near future, will take away thelivelihoods of many millions of workers globally, including in the Caribbean.

In a report published in January,the World Economic Forum estimated that up to 5.1m jobs could be lost in thenext five years alone in some of the world’s leading economies as a result ofthe disruptive effects on the labour market of robots and artificial intelligence,in what is coming to be known as the fourth industrial revolution.

The organisation, which organisesthe annual conference in Davos that enables global leaders to look over thehorizon, says that what we should expect as these new technologies take hold,is a blurring between the physical, digital, and biological spheres, alteringthe way we work and relate to one another.

Its report speaks to developmentsthat will have profound implications for education, skills, employmentsprospects, where and how we work, and migration. It suggests that many jobswill be replaced, while new previously unimagined forms of employment will becreated, and that income inequality will rise across the world as those withhigher skill levels come to command much higher levels of remuneration.

An indication of who will be mostaffected by such change is contained in a paper, ‘The Future of Employment: Howsusceptible are jobs to Computerization?’, published in 2013 by two Oxfordacademics, Carl Benedikt Frey and Michael Osborne, which establishes whichoccupations are most at risk.

Its authors use a mathematicalmodel to identify which of 702 forms of employment are most likely to bereplicated by machines. The answers they come up with in relation to the US areoften surprising. Those least at risk included recreational therapists, theclergy, composers and Chief Executives, while among those most at risk were,according to their calculations, bookkeepers, watch repairers, insuranceunderwriters and telemarketers. Along the way many occupations common in theCaribbean in tourism, agriculture, back office services, administration, partsof the legal profession and medicine,were deemed also to be at significant risk.

All of which points topotentially uncertain outcomes for countries and regions that do give earlythought to the implications for education, competitiveness, the nature offuture employment, and more generally the wider implications for social orderin a world in which developed and developing nations will face similarchallenges, especially in determining how and what skills to teach for thefuture.

In the Caribbean it will requirefor example, finding early answers about the extent to which its largelyun-mechanised high-cost agriculture is viable; decisions on how to extractvalue from the region’s current focus on becoming a strategic hub for shipping,manufacturing assembly and transshipment when within a decade most suchoperations will be driven by robotics; and how to respond to the possibility thatmany of those working in the law, basic teaching, financial services, and evenparts of the public sector may find their roles replaced by artificialintelligence located offshore operating at much lower cost.

In the case of tourism, thequestions will relate to the type of destination that each Caribbean nation andits industry wishes to aspire to, and the extent ignoring new technology mightactually offer competitive advantage.

Could the Caribbean decide, forinstance, that it would be better to ignore the new technologies that willchange the nature of everything from front desk operations to food preparationand general administration, and instead make a marketing virtue out of anation’s tourism product being provided by genuinely highly trained, thoughtfulindividuals providing a personal service at premium price?

The only countries presentlygiving real thought to all of these issues are Cuba, the Dominican Republic,and Puerto Rico.

The potentially existentialnature of what is happening suggest that at the very least there is a pressingrequirement for all nations to begin to consider how the region’s educationsystems and teaching should be adapted to develop the skills required for adisrupted world.

David Jessop is a consultant tothe Caribbean Council and can be contacted at

david.jessop@caribbean-council.org

Previous columns can be found atwww.caribbean-council.org