The Fourth Industrial Revolution & What Were Those Other Two?

so apparently we are due for a fourth industrial revolution which might come as a surprise to you because as far as most people can tell we've only had one industrial revolution and some nations haven't even got around to that one yet all the same the promise of a radical shift in the way that we live our lives has got a lot of economists very excited and maybe a little bit anxious both for very good reasons the first industrial revolution you know the one that we all think is the only industrial revolution was responsible for giving us production this production went on to define our way of life in the modern world where people in advanced economies have access to practically unlimited food robust housing and bits and bobs to fulfill every little desire that they have the world before this was very stagnant the idea that we have economic growth at all where society is always advancing and every generation is richer than the one that came before it is a surprisingly modern ideology what's more is that it's not something that we are guaranteed we can only get so good at making stuff given our current set of technologies and resources and in fact we might already be starting to see this plateau arguably the rollout of smartphones that gave us some limited access to information wherever we were was the last great paradigm shift in the way that we lived our lives 13 years later this technology is improving but it doesn't offer anything fundamentally different to the way that we live our lives run our economies or advance our standard of living but maybe we're getting ahead of ourselves to really know what to expect from this supposedly incipient fourth revolution we must first understand a few key things how do economists define an industrial revolution what is a revolution and what is just some cool new technology what were those other two industrial revolutions what is going to be the fourth industrial revolution and will this all make our modern economies look like the land before steam engines this episode of economics explained was made possible by our fans on patreon if you would like to gain early access to these videos before they're uploaded to youtube as well as participate in exclusive q a sessions which are now held every saturday at 9 30 eastern standard time please consider supporting our channel at patreon.com economics explained now before we start trying to predict the future of the ways that our society is rapidly going to change it's probably responsible to first understand what economists define as an industrial revolution and the answer is well it depends some economists are real purists and they will argue that there was only one industrial revolution and everything in our modern economy is ultimately just a continuation of technological advances that were making production easier you know the type of economists that will insist on listening to the beatles on their 12-inch record player for what it's worth historians kind of agree with them and the industrial revolution is just a blanket term given to the time between the mid-1700s and the late 1800s in europe but there is a more flexible definition that makes an industrial revolution more of a process rather than an event in history this definition classes an industrial revolution as a systematic shift in technology that changes and improves the way that business is done while creating new businesses across all industries in the economy a bit of a mouthful but let's apply it to the first industrial revolution the adoption of steam power and mechanized production was a systematic shift in technology from the hand tools that we used before this it certainly improved the way that business was done and it even drove massive shifts in the way that society was structured and it did this all while creating new businesses and jobs all across the economy and in all industries and i actually want to focus on that last point because it is very important all industries is the differentiating factor between an industrial revolution and just a cool new piece of technology youtube for example has improved businesses while making all new ones if i told someone i was a youtuber 16 years ago that would probably ship me off to the asylum if i tell someone the same thing today they say they don't care but at least they know what i'm talking about but of course youtube did not drive an industrial revolution because while it has fundamentally changed the way that media is consumed it hasn't really changed the way that we farm food or produce cars or lend money so that kind of begs the question then what were those other revolutions you may not know this but the first industrial revolution kind of ran out of puff at the end of the 1800s new inventions were few and far between and for the most part society had fallen into the status quo where they could produce textiles and bricks on mass this was still a huge achievement but the machines making all this possible were still very hard to produce and limited in their functionality you would be hard-pressed to tell the difference in quality of life between 1801 and 1851 which historically is an insignificant amount of time but imagine if the world today did not grow wealthier over a 50-year period people would lose their minds fortunately for the progress of humanity this started to pick back up again in the 70s the 1870s the period from here until the early 20th century was punctuated by a few key creations most notably standardization the bessemer process and the telegram standardization was a surprisingly big deal before this all machines working in the world were custom contraptions specific to one factory or textile mill or farm these custom machines were obviously extremely expensive and made even more so by the fact that any repair required the direct attention of a blacksmith to make a new custom part from scratch imagine if you needed to get new brake pads for your car but the mechanic had to cast the steel from scratch to match the specific size of your axle bolts and tires think of what the parts and labor on that invoice would be then think of how many people would stop driving if it got that expensive and then think of how much poorer the world would be without our most heavily utilized form of transport using a set standard for nuts and bolts and screws basically did to machines what the printing press did to books the number of machines out there working in the economy skyrocketed and the repairs were made far cheaper and easier by parts that fit any machine out there with the same specifications the next component of the second revolution was the bessemer process which allowed for the easy production of steel a common misconception is that it actually made steel production possible which isn't entirely correct steel had been produced for hundreds of years before that but it was a very tedious process and it was only really used for things where performance was vital like guns and swords and that was pretty much it steel back then was kind of like titanium today very expensive very useful but used very sparingly but this bessemer process which was basically blowing a big old pot of iron and carbon soup made steel production easy and cheap so cheap that even big old ships and skyscrapers could be made out of the stuff which was fantastic because iron is way worse than steel i did one single course of material science at university and real engineering has subscribed to this channel so i'm obviously qualified to talk about this stuff but if you tried to build a car out of iron it would end up weighing eight tonnes sagging in the middle and snapping like toffee if you close the door too hard the modern world is built on steel and we were sure to tell everyone about it with our whiz-bang new telegrams we take instant communication for granted today but the ability to send information from one side of a country to the other in less than a week changed the world in more ways than i could possibly list needless to say these three innovations gave rise to a new wave of growth in and around the world and ushered in the united states as the world's largest economy beating out china which was still larger than the united kingdom despite their technological advantage this was the first time in history that industry decided who was the top dog now this revolution is in many ways still driving growth to this very day we continue to build larger ships operate larger and more efficient machinery and drive cars made possible by steel and standardization that is to say that there was not the same lull between the third and second industrial revolution like there was between the first and the second unless you count the great depression which you shouldn't because that was a whole other thing rather the advent of computers and digitized data storage further accelerated the growth that was made possible by the second industrial revolution this is equally as easy to see there are very few jobs in the world today that don't require some kind of interaction with a computer and even in their most rudimentary form they were game changing in the way that we could work with large pools of information even if you forgot about the internet because don't worry we'll get to that just think about your own job i'm confident a good portion of you watching would not know how anything got done before a pc was standard issue on a work desk computers today are almost inseparable from the way that we live and work and they have made us as individuals far more productive and also far less productive all at the same time but we are again starting to fall into a situation where their usefulness is not providing much more utility year on year most white collar workers in the world today use excel powerpoint a web browser and if they are really technical maybe some kind of programming suite or media editing software the thing with all of these applications is that the first few would work pretty much the same on a 10 year old computer and even those last two tasks are still possible on such a machine for what it's worth i actually get at these videos on a computer that's now seven years old but please like and subscribe so mr economics man can maybe get myself one of them new 3090s but either way if we want to continue to grow forever we are going to need technologies that radically change the way that we do things rather than slightly improve them year on year and fortunately that might just be what we're going to get with the fourth industrial revolution there are developments on the horizon that will work to accelerate the progress of society just as much as anything else that we have spoken about thus far with the big caveat that we have to make them a reality first we can envision something like a time machine and even speculate about such a machine's potential applications but we don't have any practical way of making one so we aren't exactly working those into our models for future growth just yet a little bit closer to reality is the creation of artificial intelligence with a robust level of general intelligence this is still something that we have yet to actually create but we are getting closer and closer year on year artificial intelligence could do to computers what steel manufacturing did to iron take the technology that helped economies for a long long time and make it radically better and easier to work with and that's a pretty common theme amongst all of the other developments that economists are lumping into this fourth industrial revolution this includes everything from global internet access advanced 3d printing quantum computing blockchain technology all the way up to things like human implants to an outside observer these may just look like a logical progression from the suite of technologies that we have available to us today but they are not they all have the ability to radically change the world that we live in across all industries however this confusion is actually part of the reason why some economists have advocated for clumping the revolution into subcategories the industrial revolutions one and two with parts a and b industrial revolution one part a gave the world mechanization then there was a bit of a lull before part b came along and made those initial advances a whole lot better in almost every way possible industrial revolution 2 pad a gave the world computers then there was a bit of a lull before part b came along and made those initial advances a whole lot better in almost every way possible while this categorization probably makes a little bit more sense it doesn't really attract as much attention as giving them each their own special number so make of that what you will but if there is a takeaway from all of this it's that amongst all the doom and gloom in the world at the moment most economists are still optimistic that we will continue to grow wealthier and more prosperous into the future hi guys i hope you enjoyed the latest video if you did please consider liking and subscribing this video is made possible by our patrons over on patreon so if you enjoyed this video please consider supporting the channel like these awesome people did thanks guys bye

Channel: Economics Explained

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Id: LvpjwHT7o4I

Length: 12min 33sec (753 seconds)

Published: Thu Dec 10 2020