I was recently asked again whether Brexit would impact UK competitiveness and damage long term prospects for the economy, jobs and general atrophy of our place in the landscape of world affairs. Some German commentators from a European perspective describe is as a “english 4.0” phenomenon which could be taken both ways as a play on the industry 4.0 and the new ways of automation that might drive a redefinition of the British working approach in this new world that they have voted upon themselves.
A bigger picture I see is the timely description by the World Economic Forum WEF of the 4th Industrial revolution and the radical shift impacting society and ourselves from the fusion of physical, digital and biological domains through technology. While the 3rd industrial revolution, also called the digital revolution, started in the 1990’s and grew in the 2000’s with the advent of the internet and the rapid explosion of cloud computing, mobile phones and social media. This new 4th era is seeing as a different kind of technological change driven by artificial intelligence and sensorization of smart homes, smart cities, connected self driving transport and a huge plethora of other connected gadgets of the internet of things. But what is less well understood is that we are also entering a post Moore’s law world where we are hitting the limits of silicon chip doubling of power and seeing new technologies in the form of nanotechnology, bioengineering, gene therapy, materials science and engineering.
All of this must also be set against the mega trends of global climate change, rapid demand and shift in energy and the huge increases in population growth driving demand for water and food increased 30 to 50% in the next few decades.
What’s next and are we ready? Some academics I have seen are describing this change as very difficult to predict in terms of the kind of skills and jobs in the next generation of worlds. People and society in general must be not just job-ready but future-ready.
While Brexit is a political shift of a generation for the UK, it is not the first or the last we will see. We also have new threats and new opportunities to face beyond this political change. Digital data can move across country borders, cyber security and threats are on the increase as the rising fourth theater of war now. Disruptive digital cloud platforms are scaling into retail, banking , media, health, transport and other industrials as the new normal. And now Artificial Intelligent looks set to change productivity, robotics at work and altering how you and the way you live and work may change in the next decade and beyond. But is it hubris to cite old glories saying we were a significant world economy before 1973 entry to the EU market. Has the world moved on and the question is does integration now need to work across national boundaries, that the idea of nationalism is not the way forward for this 4th era future.
So Brexit seems to raise questions over access to markets, changing workforce immigration access, access to EU funds and research collaboration and probably a range of other as yet foreseen administration and industry collaboration changes and challenges.
But lets do a head count here in terms of the historical precedence of the UK track record and the things that are can foreseen that is coming next. UK research and development has and is a world leader in many of the 4th Industrial fields of medical and industrial research. We have some of the world leading AI researchers in the form of DeepMind and others in the UK. Economically in spite of local interest changes we do have a stable and viable economy with a long history of international trade around the world with our soft power of language and culture. Im not saying this issue of access to EU funding and collaboration will not damage in the short term research or market access as its clear that EU member states are designed to benefit from EU arrangements.
For the UK this means there will be restructuring of markets that are heavily linked to the EU, we import and export around 50% of our trade with the EU after all. Financial institutions are already seeing the winds of change and automotive companies looking to address EU market supply chain access looking for workarounds.
But looking beyond this to building UK plc competitive advantage means strong focus on these new technologies and industrialization for jobs and productivity. Commercially companies will drive these anyway , looking for ways round these political obstacles. Brexit negotiation will be a game of dancing on these pinheads for access to the market on reasonable terms but not losing sight and setting up investment for a future UK in the open global market.
Fundamentally the assumption here is will the EU actually lead any of the 4th Industrial innovation and will the UK be worse off for Brexit? Historically the EU has struggled to create competitors to Amazon, Google and new innovations are typically international in nature. Recent research on these issues of coordinated multiple countries agendas has proved burdensome and inefficient but I remain hopeful as a principle a cross boarder EU strategy can work as collectively it is the worlds largest market; but that said in practice is highly fragmented and national centric. The H2020 80 Billion Euro fund available till 2020 is one such issue that post Brexit period may see UK research move east and west as we seek other funding partners. The UK foundations where already well built, in some cases a millennia ago, in the academic and research traditions long before the 1973 membership. The rise of intelligent systems in the 4th Industrial Era may become accelerated in the UK as the stresses to change and compete more vigorously push the society to respond. This may be optimistic but historically if you were betting on the British history it seems to go well.
Professor Mark Skilton has a new book he co-authored with Dr Felix Hovsepian for “The 4th Industrial Revolution: Responding to the impact of Artificial Intelligence on Business.” Palgrave Macmillan and Springer due November 2017