The digital revolution is affecting all sectors. Europe and France must mobilize to make up for lost time.
The fourth technological revolution, which was the central theme of this year’s summit in Davos, is on the way. It is not just a far-off prospect but a reality. After the steam engine, electricity and computers, comes the convergence of the data economy, robotics, connected objects and artificial intelligence; this is not only radically changing production but is also changing the way societies live as well as world equilibrium.
The effects are many and tangible. In the United States, both capital and talented people are leaving Wall Street in an exodus to Silicon Valley and Boston. An example is General Electric which is quitting finance to invest in industry again, in its digital version. GAFA’s capitalisation exceeds that of the CAC40 by 200 billion and funds raised by start-ups topped 100 million dollars last year. Real estate prices in San Francisco are now higher than in Manhattan and 30% of offices there are occupied by technology companies. In the developed world, wage labor is on the decrease and freelance work is on the up: 4.5 million people in the United Kingdom work freelance, thus contributing to full employment in England (5.2% unemployment) and the United States (5% unemployment).
However, the 4th technological revolution has some new features. It is affecting all sectors of activity and wiping out the frontiers between industry and services. It is universal. It is happening in real time, and speed is a key factor. It is putting machines in a position where they can replace and even control humans. From now on, the frontiers to be crossed will not be technological but human.
The consequences are huge. Economic consequences, radically changing development models, steering them away from producers towards consumers and distributors. Social consequences, with the possible disappearance of half of all jobs between now and 2030 and the decline of wage labor. Legal consequences, with questions raised about property, protection and personal means of exploitation. Political consequences, with state governments powerless to regulate or tax digital platforms. Strategic consequences, with the domination of the digital economy by the United States and China, which cannot be dissociated from the loss of sovereignty of other nations, as has been shown by the global electronic surveillance deployed by the NSA. Ethical consequences, with a huge increase in ways to modify or aggrandize humans by interfering with our genetic heritage, by organ implants or by the grafting of connected limbs.
The digital revolution thereby creates risks which must be added to other issues: the aftermath of the 2008 crisis, financial bubbles, global warming, and new strategic threats linked to Islamic terrorism and the awakening of empires. Between now and 2020, 5 million jobs could be lost in the major world economies, adding to the 200 million unemployed that we have in the world at the moment. The polarization of activities, territories and jobs would aggravate inequalities; 4 billion people are still not connected and there are 1.5 billion in dire circumstances throughout the world. Democracies, undermined by populist movements, would be threatened by the destabilization of the middle classes and by the speed of digital advance – incompatible with the time needed for debate and for decisions to be take by the different powers-that-be.
How this 4th technological revolution works out will depend on what we humans do with it. It is up to us to use its potential and limit any possible excesses. The priorities can be clearly identified. To invest massively in education and access to knowledge. To fight again inequalities by reinforcing individual autonomy and not by ruinous and ineffective social transfers. To undertake the financing of new infrastructures in order to avoid personal or territorial fractures. To free entrepreneurial skills by fostering capital and job mobility. To refocus the State around the security of its citizens as well as its economic and social stakeholders.
Europe and France must mobilize vigorously to make up for lost time. The share in the digital economy held by our continent has dropped back from 32% to 19% in a decade. Despite its exceptional human capital, France has plummeted to 26th place in the world. Instead of just enduring the technological revolution, let’s make it happen! It is not the technologies themselves but the strategies that put them into effect that determine the wealth and power of companies and nations.