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India and Industry 4.0: Smart Thinking and Smart Politics

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The neologism -Fourth Industrial Revolution or Industry 4.0 is not uncommon for policymakers and technocrats. Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF), published a book titled “The Fourth Industrial Revolution” and coined the term at the Davos meeting in 2016. Since then, “Industry 4.0” has been a buzzword in all major economic and business summits.

In a paper titled – The Fourth Industrial Revolution: what it means, how to respond, Klaus Schwab, said “this revolution is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution but rather the arrival of a fourth and distinct one: Velocity, scope, and systems impact.” The world is at the cusp of an unrivalled revolution. The first revolution captivated water and steam to mechanise production, the second exploited electric power and the third relied on electronics and IT. The fourth one is a conglomeration of various automation technologies such as artificial intelligence (AI), the internet of things (IoT), blockchain, fintech, autonomous vehicles, 5G telephony, nanotechnology, biotech, machine learning, robotics, quantum computing and the like.

Nicholas Davis, head of Society and Innovation at WEF in this WEF paper, describes this revolution as the emergence of cyber-physical systems which, while being “reliant on the technologies and infrastructure of the third industrial revolution…, represent entirely new ways in which technology becomes embedded within societies and even our human bodies”.

Industry 4.0 is shaped by advanced technologies from different spheres like the physical and digital worlds that combine to create innovations at a speed and scale unparalleled in human history. The fourth industrial revolution demands ubiquitous digitization, automatic machine-to-machine (M2M) communication and is constantly transforming how individuals, governments and companies relate to each other and the world at large. With such sudden disruption, it will radically change macroeconomics and the way the industry responds to the needs of civil society.

Great and sudden change by its very nature is painful to accommodate. Preparing for the Fourth Industrial Revolution is a subjective task. Developed economies like the United States, Russia, China, etc. will have to frame policies according to their economic and technological demands. For a growing economy like India with its under utilised population, young age and cultural diversity, a more people-intensive approach should be adopted. This will require policymakers to harness the industrial change instead of being a reactive agent. In democracies like India, it is effective law-making which plays a major role to deliver regulatory frameworks that change often and respond to the stimulus.

The speed of change is unexcelled. It is disrupting almost every industry in every country, and it presages the transformation of production and governance. The gap between the 1st and 2nd industrial revolution was around 100 years, 2nd and 3rd was approximately 70 years, 3rd and 4th is 25 years. Analysing this trend, it cannot be ruled out that the next industrial revolution may take place within 10-15 years. So, it is very important that economies pool their resources, take risks, make new investments and come together for better agility to adapt quickly to make the best use of this global change. 

Going into the history of industrial revolutions, it is apparent from a layman analysis that whichever country early participated in the industrial process turned out to become world leaders right after that industrial revolution. India is a young nation aiming to be the third largest with a10 trillion-dollar economy by 2030, India has no option but to not only participate but also be the frontrunner in the Fourth Industrial Revolution.

In 1750 AD, India’s share of global industrial output was roughly above 25%. India missed the bus of first industrialisation due to the devious British Raj and by 1900, this had plummeted to 2%. While India’s contribution to the world GDP was 2.6 per cent in 2014, it has increased to 3.3 per cent in 2017. Addressing the joint sitting of the Parliament, the President of India said the country’s GDP has been growing at a rate of 7.3 per cent on an average, making India the sixth largest economy in the world. India is playing a vital role in international trade in the Asia Pacific region. The President also noted that this is an opportune moment for the country to play a decisive role in the fourth industrial revolution considering its economic position. 

Proper channelling of resources towards Industry 4.0 can help India leapfrog traditional phases of development and accelerate its metamorphosis to a developed nation. Being the fastest growing economy, deploying these technologies optimally and strategically can create more sustainable growth. A culturally accommodative nation with more than 70% of its population under the age of 32, India’s role is also going to be crucial in shaping the global Fourth Industrial Revolution agenda in a millennial and inclusive manner. India has the potential to be the global hub for the Fourth Industrial Revolution.

Governments, entrepreneurs, business houses and start-ups are rapidly adopting technologies involving AI, the Internet of Things, 3D-printing, advanced robotics and blockchain. Artificial intelligence can be used effectively to reduce poverty, improve the lives of farmers and make the lives of the differently abled simpler. The application of AI in sectors from health to law, from manufacturing to finance, from elections to governance, is not an impossible reality. Blockchain can facilitate cross-border data and technology transfers to support government services and natural resource management. India recently came up with its unmanned aircraft systems policy, commonly referred to as drones, having the ability to strengthen defence and security, make dangerous jobs safe, and act as a lifeline for remote populations.

Considering the pace of growth of automation technologies, it is absolutely possible that we will reach a point called “singularity” where machines become as smart as humans and then keep getting smarter.  Repetitive processes are increasingly becoming automated. Digital technologies have the potentiality to bring about the balance between green and growth, data and infrastructure, and profits and people. Technology will soon be able to edit genes to create favourable traits and new life forms. 3D Printers may become capable to produce fully functional, usable organs. Artificial blood might soon become a reality and the oceans would be harvested for food. Banks and financial sectors in India are already using chatbots and humanoid robots.  A Kannada-speaking robot in Canara Bank in Karnataka and Ira robot of the HDFC Bank which helps customers choose the right service and financial products are examples of linguistic coding of automation technologies.

It is estimated that between 2018 and 2022, as many as 75 million jobs will be displaced worldwide due to automation; however, as many as 133 million new ones would be created.  In the United States alone, it is estimated that 1.4 million workers will be displaced in the coming decade as a result of the introduction of new technologies. India’s information technology sector is already witnessing jobless growth and there are various reports showing India unemployment rate hit a 45 year high in 2017-18. The biggest concern of Industry 4.0 for every growing economy is the loss of jobs. A potential answer to this problem is – smart politics. In a country like India with 1.3 billion people, it is practically impossible for any government in the world to provide jobs to everyone, what is practical is to engage people. This engagement is not only about job creation but also about start-ups, alliances, businesses, offshoring, etc. which will sufficiently help an economy to capitalise the resource pool.

Like all revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise income levels and improve the quality of life globally. Mitigating the relevancy of jobs is not India specific, it is a global issue. But the peculiarity of this problem is the method of tackling it. Smart policies and smart thinking can reconstruct these challenges into opportunities. When the first computer was invented, there was a worldwide outcry on its impact on jobs, but history is the evidence of the fact that computers created more jobs than it destroyed. India too faced national protests against the computerisation of railway tickets as economists predicted it would take its toll on the jobs. Today, Indian Railways is India’s largest employer and is about to conduct the world largest employment drive with around 2.37 crore applicants competing for 1.27 lakh posts.

Given the Fourth Industrial Revolution’s rapid pace of change, it is important for governments and international organisations to evaluate whether to create change or follow the change.  Legislators and regulators are being challenged to an unprecedented degree and for the most part is proving unable to frame a flexible framework. Unconventional challenges need collaborative efforts. India will have to create a long-term ecosystem with the right mix of accelerators comprising of regulatory frameworks, educational ecosystems and government incentives that train and educates professionals.

India’s philosophy “Vasudhaiva Kutumbakam” or “the world is one family”, has guided the nation since Vedic times. It is based on the blending of science and spirituality for harmonious co-existence reaffirms faith in innovation and adaptability. India can act as a coordinator to collaborate with global economies to form a joint platform or intergovernmental taskforce involving all stakeholders of the global polity for leveraging most of the Fourth Industrial Revolution technologies.

Adithya Anil Variath is a lawyer based in Mumbai, India. He writes frequently on issues of Law & Policy, AI and International relations

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Digital tracking of environmental risks offers insights to humanitarian actors

MD Staff

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photo: UN Environment

By the end of this day many people will have made life-changing decisions, relying on their best guess or their instinct. Some will yield great results while others will imperil individuals, corporations and communities.

Humanitarian crises require that we make difficult choices. As they increasingly become complex, as are their impact on the environment, the choices we make must be the right ones. And to make sound, informed decisions, we need data. 

Thankfully today, all those who work in the environmental field have at their fingertips a combination of global environmental data, technologies and data science tools and techniques. These have the potential to create insights that can underpin a sustainable future and profoundly transform our relationship with our planet.

For decades, the UN Environment Programme has been working with the Office for the Coordination of Humanitarian Affairs, and partners such as the UN Refugee Agency, to make sense of environmental data for improved humanitarian planning.

In December last year, UN Environment with support from the UN Refugee Agency piloted an innovative tool for environmental data gathering and risk assessment, the Nexus Environmental Assessment Tool (NEAT+). The tool was deployed in the Mantapala refugee settlement in northern Zambia.

Built around existing farmland, Mantapala refugee settlement, near Nchelenge in northern Zambia, was built in 2018 for up to 20,000 people. It was designed to enable refugees to make a living while contributing to local development. The surrounding humid sub-tropical Mantapala Forest Reserve—an area characterized by rich biodiversity—includes the productive Wet Miombo Woodland.

According to the UN Refugee agency, Zambia hosts at least 41,000 refugees from the Democratic Republic of Congo and Mantapala refugee settlement is home to around 13,000 of them.

 Daily life isn’t easy. Flash floods can be common during the long rainy seasons when rainfalls are particularly heavy. In addition, less than 20 per cent of Nchelenge district’s households have access to electricity, and even when they do, it is so expensive that people prefer to use firewood and charcoal as their primary cooking fuels.

“With pressure mounting on natural resources throughout the world, we are exploring how to support humanitarian actors in collecting, sharing and processing environmental data for better decision-making using innovative digital environmental tools such as the Nexus Environmental Assessment Tool (NEAT+) and MapX—a United Nations-backed platform—in Mantapala settlement and beyond,” says David Jensen, UN Environment’s Head of Environmental Cooperation for Peacebuilding and Co-Director of MapX.

What makes NEAT+ so appealing is its simplicity. It is a user-friendly environmental screening tool for humanitarian contexts, which combines environmental data with site-specific questions to automatically analyse and flag priority environmental risks. The tool was developed by eight humanitarian and environmental organizations as part of the Joint Initiative, a multi-stakeholder project aimed at improving collaboration between environmental and humanitarian actors. NEAT+ supports humanitarian actors in quickly identifying issues of concern to increase the efficiency, accountability and sustainability of emergency or recovery interventions.

“NEAT+ answers the demand of a simple process to assess the sensitivity of the environment in displacement settings. It overlays environmental realities with a proposed humanitarian intervention, identifying risk and mitigation measures,” says Emilia Wahlstrom, Programme Officer, UN Environment / Office for the Coordination of Humanitarian Affairs Joint Unit.

NEAT+ runs on KoBo—a free, open source data collection platform—built by the Harvard Humanitarian Initiative—that allows data to be collected through phone, tablet or computer. Once the data is recorded, the programme automatically generates a report in Excel, categorizing risk into high, medium and low, and providing information that can help mitigate the risk.

As a next step, NEAT+ will draw increasingly on MapX, an online, open-source, fully-customizable platform for accessing and visualizing geospatial environmental data. It offers various tools to highlight different environmental risks such as deforestation, natural hazards and flood risks. NEAT will use MapX to gather and vizualise data.

In the Mantapala settlement, the NEAT+ assessment tool was used to identify negative environmental and livelihoods impacts in the settlement, where MapX spatial data highlighted nearby areas of environmental concern.

The results showed opportunities for environmental action. Where there was risk of deforestation, alternative livelihoods and agroforestry programmes could be supported. Agricultural plots vulnerable to flood damage are undergoing modification to prevent further deforestation and to reduce flood risks.

“Developing a digital ecosystem for the environment offers the possibility to access the best available data for decision-making. Tools such as MapX and NEAT+ are critical in mitigating the effects of sudden-onset natural disasters and slow-onset environmental change and degradation,” says Jensen.

“Developing and applying the NEAT+ tool has showed us the added value the environmental community can bring to the frontlines of humanitarian response. By taking the time to understand the environmental context they operate in, humanitarian actors are designing programmes that are saving money, contributing to a healthy environment, and supporting the dignity, livelihoods and health of affected people. This is critical for an increasingly complex and protracted global humanitarian crisis panorama,” comments Wahlstrom.

In 2019, the same actors who developed the NEAT+ tool, the Joint Initiative partners, launched the Environment and Humanitarian Action Connect website. Environment and Humanitarian Action Connect is a unique digital tool spanning the humanitarian-environment nexus and represents the first comprehensive online repository of environmental and humanitarian action tools and guidance. It is easily searchable and readily accessible, whether at the office, at home, or in the field. The content aligns with the humanitarian programme cycle with specific guidance available for humanitarian clusters and themes.

Environment and Humanitarian Action Connect is administered and updated by the United Nations Environment / Office for the Coordination of Humanitarian Affairs Joint Unit. Through the Joint Unit, UN Environment and OCHA respond as one to the environmental dimensions of emergencies. The partnership assists countries affected by disasters and crises and works to enhance the sustainability of humanitarian action. The partnership has supported almost 100 countries and conducted over 200 missions, and celebrates its 25th anniversary this year.

UN Environment

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China’s Experience with High Speed Rail Offers Lessons for Other Countries

MD Staff

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China has put into operation over 25,000 kilometers of dedicated high-speed railway (HSR) lines since 2008, far more than the total high-speed lines operating in the rest of the world.  What type of planning, business models, and approaches to construction enabled this rapid growth? In an era when many railways face declining ridership, what pricing and services make high-speed rail attractive to this large number of passengers and maintain financial and economic viability? A new World Bank study seeks to answer these and other questions.

“China has built the largest high-speed rail network in the world. The impacts go well beyond the railway sector and include changed patterns of urban development, increases in tourism, and promotion of regional economic growth. Large numbers of people are now able to travel more easily and reliably than ever before, and the network has laid the groundwork for future reductions in greenhouse gas emissions,” said Martin Raiser, World Bank Country Director for China.

The World Bank has financed some 2,600 km of high-speed rail in China to date. Building on analysis and experience gained through this work and relevant Chinese studies, China’s High-Speed Rail Development summarizes key lessons and practices for other countries that may be considering high-speed rail investments.

A key enabling factor identified by the study is the development of a comprehensive long-term plan to provide a clear framework for the development of the system. China’s Medium- and Long-Term Railway Plan looks up to 15 years ahead and is complemented by a series of Five-Year Plans.

In China, high-speed rail service is competitive with road and air transport for distances of up to about 1200 km. Fares are competitive with bus and airfares and are about one-fourth the base fares in other countries. This has allowed high-speed rail to attract more than 1.7 billion passengers a year from all income groups. Countries with smaller populations will need to choose routes carefully and balance the wider economic and social benefits of improved connectivity against financial viability concerns.

A key factor keeping costs down is the standardization of designs and procedures. The construction cost of the Chinese high-speed rail network, at an average of $17 million to $21 million per km, is about two-thirds of the cost in other countries.

The study also looks into the economic benefits of HSR services. The rate of return of China’s network as of 2015 is estimated at 8 percent, well above the opportunity cost of capital in China and most other countries for major long-term infrastructure investments. Benefits include shortened travel times, improved safety and facilitation of labor mobility, and tourism. High-speed networks also reduce operating costs, accidents, highway congestion, and greenhouse gas emissions as some air and auto travelers switch to rail.

This report is the first of a series of five studies of transport in China—high-speed rail, highways, urban transport, ports, and inland waterways—produced by TransFORM, a knowledge platform developed by the World Bank and China’s Ministry of Transport to share Chinese and international transport experiences and facilitate learning in China and other countries.

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Net Neutrality, EU final call on Internet governance?

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It is possible to celebrate the ability of European models of pluralism protection to adapt to the new challenges posed by technological progress. The European Union has in particular issued a favorable framework for innovation by liberalizing the telecommunications market. In addition, it has also reaffirmed its conception of the digital world thanks to numerous regulations  regarding  the responsibility  of  the  contents  diffused,  cybersecurity,  taxation, competition or in the field of the culture with the recent directive on copyrights. There is therefore obvious convergence between the infrastructure and their contents, but these two regulatory bodies still have specific missions within the European Union. The 2009 European Regulation created the European Electronic Regulators Body (BEREC) to better formalize the joint actions of independent regulators and relations with the European institutions.

However, it remains that in terms of digital, US hegemony is undeniable. All the more so, that one can observe a powerful economic competition between the United States and China to determine who will have the monopoly in the digital sphere. The debate leading to questioning an end on net neutrality is largely influenced by an American regulation of the digital, which is at the antipodes of a European strategy. Net neutrality was actually installed by the Federal Communications Commission under President Barack Obama, but have been abandoned under the administration of President Donald Trump. Net neutrality is a founding principle of the Internet, which ensures that telecom operators do not discriminate against the communications of their users, but remain mere transmitters of information. The legal framework of net neutrality in the European Union (EU) is laid down by Article 3 of EU Regulation 2015/2120. This principle allows all users, regardless of their resources, to access the same network as a whole. Thus, this regulation guarantees the possibility for all users to communicate freely through the exercise of effective and fair competition between network operators and telecommunications service providers.

The arrival of Netflix, the subscription video-on-demand service, has polarized the essentially positive view of net neutrality in the EU. Thus, Olivier Schrameck, the president of the CSA pronounced in his speech of July 3, 2014 during the 11th days of the association of the promotion of the audio-visual (APA) that one “must finish with the absolutist conception of the  net  neutrality  “.    Indeed,  the  service is a broad bandwidth consumer in the evening without contributing financially in return. The hyper-demand for bandwidth pushed up the costs of network infrastructure. Proponents of an end to neutrality believes that it primarily benefits actors like Google or Facebook who already have a favorable tax regime. Consequently, strengthening the power of large players in the digital field. By ending net neutrality providers would then be able to slow down data traffic from certain website and give priorities to others by charging differently depending on the content. It seems legitimate to  wonder  if  the  EU  should  then  follow  the  path of Donald Trump’s administration by changing the rules of the Internet. However, net neutrality seems like a fundamental instrument  for  the  protection  of  the  EU  fundamental  rights  on  the  Internet  such  as  the freedom  of  expression  and  the  right  to receive and impart information. Adding political objectives  to  a  debate,  which  seems  dominated  by  the  will  to  maintain  an  economic modelling of pricing in two-sided markets.

If  net neutrality is fundamental in order to preserve the European model of pluralism of information  and  consumer  protection,  how  can  it  be  maintained  in  the  digital  age?  I personally  believe  net  neutrality  should  be  thought  in terms of how to conceptualise its regulation rather than imagining its end. For instance, a prescriptive ex-ante regulation could undermine innovation. The flexibility of European competition law allows for the treatment of a wide variety of sectors, such as responding to digital challenges. It would be dangerous to move away from it. Today, the way in which the internet works rests on a biased competition. There is therefore a major dysfunction of the digital market, which poses a very important risk to our economy.  Competition law should be rethought in order to create new competitors,   as   the   previous  regulations  of  Telecoms  did  by  creating  a  favourable environment for actors concurrencing a monopoly.   The actual regulation allows national judicial different interpretations on net neutrality which lead to different implementations as data traffic is treated according to national jurisdictions interpretation.

Although useful, the competition itself is not enough to regulate the digital. Digital platforms, for example, do not necessarily have an interest in ensuring diversity and sufficient quality of their  content.  In  terms  of  digital  regulation,  Member  states  can not act alone, since the intrinsic nature of digital technology establishes a world-class territory. If the prospect of a global regulation of the digital remains distant, it is possible to solidify a regulation on a European scale. Especially since the GDPR establishes a network regulation, with the obligation  of  cooperation  between  the  different  regulatory bodies across Europe. Europe therefore has the tools to combine regulation and innovation, but they remain difficulties in its implementation, including the lack of common decision-making between member states resulting from a true “balkanisation of the web”.  The GAFA’s taxation policy also illustrates the presence of disparate opinions that hold back the prospect of a Europe acting as a unified actor in the digital domain.

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