The first Industrial Revolution happened in the late 18th century and early 19th century. Its focus was on mechanization where it substituted human and animal labour by mechanical labour. It gave boost to manufacturing and urbanization. Nations used it as key to their development.
The second industrial Revolution in the late 19th centuary and early 20th century focused on mass production using the assembly lines. It gave boost to large scale production, specialization and interdependence in manufacturing. It also encouraged transportation to expand the market reach.
The third Industrial revolution happened in the later part of the 20th centuary. It relied upon automation, an alternative to mechanization. It encouraged globalisation, and manufacturing activities shifted from the developed to the developing economices.
The fourth Industrial Revolution is in the process of unfolding and depends on robotization and supporting IT infrastructure. It enables gteater freedom of choosing locations and manufacturing processes. There is flexibility of scale and customization. Here, robotization goes beyond just mechnization to undertake more complex tasks. Labour becomes ubiquitous because of robotization. Manufacturing and supply chain become closely embedded. In time to come, even distribution gets embedded to production.
India is formulating new Industrial Policy to replace the old policy that was last revised in 1991. It should meet the requirements of the 21st century’s digital world. There are four factors which would be affecting this policy.
Smart manufactring using IoT should be exploited by India. India missed the bus at the time of third industrial revolution.
Servitisation Servitisation is the trend for fourth Industrial Revolution. There should be seamlss data flow. Privacy laws must be in place. The labels of industry and services must be discarded. There are going to be changes in global supply chain. The boundaries between industry and services will blur — Google and Apple entering automobiles, Uber and Ola either as automotive value chains or the service sector, products being sold as services. All this calls for new laws for taxation. The new policy must address the challenges of moving to digitally-delivered solutions to both industrial and individual customers.
Micro-enterprises In the fourth industrial revolution, a new industrial amd work structure emerges. The way enterprises and enterpreneurs fuction would change. Digital technology enables us to overcome the barriers of scale. There is access to resources, customers, and suppliers. It is easy for an individual to be a micro-entreprenur. Servitisation facilitates this. Micro-entreprenurs are key players in the last mile eco-system.
Life-long learning system and labour laws for the 21st century must be designed.
These are the first three Industrial Revolutions that transformed over society — the steam engine, the age of science and mass production and the rise of digital technology. The fourth Industrial Revolution is a fusion of technologies — physical, digital and biological. It is marked by the emerging technologies in robotics, AI, blockchain, ,nanotechnology, quantum computing, biotechnology, IoT, 5G, 3D printing and autonomous vehicles. Klaus Schawab has called it Second Machine Age in terms of effects of digitization and AI on the economy. AI has been called ‘electricity for the fourth Industrial Revolution’. The US has about 78,000 AI researchers. China has about half that number. The issues of equality are likely to emerge. These technologies would widen the inequality. And if the robots are more productive than humans, should they be taxed? Perhaps indirect taxation is better than direct taxation.
Industry 4.0
In Industry 4.0 which has been fostered by the Fourth Industrial Revolution, the walls that defined industries are collapsing. Technology has been democratised and it connects industries.The manufacturing processes are moving at an unparalleled pace. An overall value has been added to the chain. Machines communicate with each other, facilitating easy transmission of information. It saves power and provides eco-friendly service.