The 4th Industrial Revolution affect economic policy?

 The 4th IR for future
For fiscal policy, the implications of the Fourth Industrial Revolution are likely to be complicated. If robotics and digitalization are disrupting jobs, there will be an impact on tax revenues. If more and more jobs can be replaced by computers and machines, the ability to tax labour income will be reduced in the long run. It is also likely that the social costs of taxes in terms of lost employment and lower GDP will increase. Taxes are likely to yield lower revenues and be more costly in terms of negative side effects for society.

The negative implications for tax revenues can potentially be reinforced by digitalization of retail sales and VAT. Almost one-third of Sweden’s Christmas shopping took place online this year. Young people below the age of 25 are already spending between a quarter and a third of their incomes on the internet. Sweden is a forerunner (the digital market in Sweden is bigger than in France in absolute terms, even if France is six times more populous), but others are gradually following suit.

From the medium-term perspective, there is also a risk that revenues from value-added tax will be affected. Goods are moving freely, and many online services are acquiring rights to use a digital product (consumption of sports, porn, gambling seems not to be hampered my the moral norms or tax jurisdictions of the digital age). The risk for tax migration in a globalized world is obvious in the long run. The standard economic theory of taxation states that the tax wedge on labour is the combination of income tax, social fees and value-added taxes.

If the Fourth Industrial Revolution has implications for labour as a production factor, it also has implications for VAT revenues.

Conclusion

The most important conclusion for monetary policy is that interest rates could remain very low for very long. Backward-looking central banks and macro-economists are apt to overestimate the inflation risks. If central banks, again and again, see actual CPI coming out lower than forecasted, soul-searching will ensue.

Against this backdrop it might be that the Federal Reserve will not follow through with quarterly rate hikes during 2016. Again, from a Swedish experience, there is a risk of too low inflation. The Riksbank, on the back drop of high growth, a strong labour market and increasing asset prices, landed in the natural conclusion that it was time to gradually raise interest rates. The stubbornly low inflation and deflationary risks that we have seen in Sweden thereafter is, at least partly, due to the fact that inflation propensity has been overestimated.

Even if the Fed had good reasons to raise rates in December, they now have good reason to exercise caution and wait for some actual inflation before they move forward. It is better to change the communication than to commit a serious policy mistake.

The Fourth Industrial Revolution is coming, and we are only just beginning to understand the implications for economic policy. Finance ministers and central bank governors alike are on a steep learning curve.

Challenge In Capital Development Towards Industry Revolution 4.0

Industry Revolution

Industry Revolution 4.0 is not only about the introduction of one new technology, linked with an incremental adaptation of work systems, but also about a multitude of new technologies and forms of application, with different degrees of technical maturity and systemic effects (Pfeiffer, 2015). The based concept of Industry 4.0 is on the integration of information and communication technologies and industrial technology (Zhou, Liu, & Zhou, 2016). The fourth industrial revolution also is marked by linking sub-components of the production process via the Internet of Things (IoT) (Tupa, Simota, & Steiner, 2017).

The Future Of Jobs And Skills

The characteristics of the fourth Industrial Revolution are destined to bring about
different impacts on employment, which are no longer confined to one industry, but
all industries. At the same time, a lot of jobs will disappear, but there will be a lot of
new job requirements. It is expected that more than 65% of children entering
primary school today will end up working in completely new jobs that currently do
not exist when they enter the workplace 15 years from now. As the changes brought
by the social media, digital publications and e-commerce, the most in-demand
occupations did not exist 10 or even five years ago. According to the Future of
Employment report, around 47 percent of total US employment is in the high risk
category. People may be more concerned about what types of jobs are at high risk
than specific Numbers. So which jobs are at greatest risk? What jobs will be safe in
the future?
Researchers at Oxford University published a widely referenced study in 2013 on the
likelihood of computerization for different occupations. Out of around 700
occupations, here are the top 30 most risky occupations having a 98-99 per cent
chance of being automated in the future:

1 Telemarketers
2 Title Examiners, Abstractors, and Searchers
3 Sewers, Hand
4 Mathematical Technicians
5 Insurance Underwriters
6 Watch Repairers
7 Cargo and Freight Agents
8 Tax Preparers
9 Photographic Process Workers and Processing Machine Operators
10 New Accounts Clerks
11 Library Technicians
12 Data Entry Keyers
13 Timing Device Assemblers and Adjusters
14 Insurance Claims and Policy Processing Clerks
15 Brokerage Clerks
16 Order Clerks
17 Loan Officers
18 Insurance Appraisers, Auto Damage
19 Umpires, Referees, and Other Sports Officials
20 Tellers
21 Etchers and Engravers
22 Packaging and Filling Machine Operators and Tenders
23 Procurement Clerks
24 Shipping, Receiving, and Traffic Clerks
25 Milling and Planing Machine Setters, Operators, and Tenders, Metal and
Plastic
26 Credit Analysts
27 Parts Salespersons
28 Claims Adjusters, Examiners, and Investigators
29 Driver/Sales Workers
30 Radio Operators
On the other hand, the following list comprises the top 30 most safe occupations
with a 0.66 per cent or less probability of being computerized based on current
technology.
1 Recreational Therapists
2 First-Line Supervisors of Mechanics, Installers, and Repairers
3 Emergency Management Directors
4 Mental Health and Substance Abuse Social Workers
5 Audiologists
6 Occupational Therapists
7 Orthotists and Prosthetists
8 Healthcare Social Workers
8
9 Oral and Maxillofacial Surgeons
10 First-Line Supervisors of Fire Fighting and Prevention Workers
11 Dietitians and Nutritionists
12 Lodging Managers
13 Choreographers
14 Sales Engineers
15 Physicians and Surgeons
16 First-Line Supervisors of Transportation and Material-Moving Machine and
vehicle operators
17 Instructional Coordinators
18 Psychologists, All Other
19 First-Line Supervisors of Police and Detectives
20 Dentists, General
21 Elementary School Teachers, Except Special Education
22 Medical Scientists, Except Epidemiologists
23 Education Administrators, Elementary and Secondary School
24 Podiatrists
25 Clinical, Counseling, and School Psychologists
26 Mental Health Counselors
27 Fabric and Apparel Patternmakers
28 Set and Exhibit Designers
29 Human Resources Managers
30 Recreation Workers

Conclusion

Several advanced economies are implementing the concept of Industry 4.0, marking the fourth industrial revolution. Increasingly, companies are applying innovative solutions, including through the “Internet of Things” (IoT), cloud computing, miniaturization, and 3D printing, that will enable more interoperability, flexible industrial processes, and autonomous and intelligent manufacturing. The new industrial revolution will be characterized by merging of technologies. Among the consequences of “Industry 4.0” and structural problems in the world, economy will be an escalation in competition at the geo-economic level. Industry 4.0 will concur to create new wealth and further improve living standards. The implementation of a 4.0 systems has considerable advantages. This chapter has analyzed a series of data showing efficiency increase and cost reductions for European companies that have implemented smart manufacturing systems. The implementation of a 4.0 system represents a real revolution within the company. In addition, the implementation of intelligent systems implies a considerable economic investment, and often the company cannot assess the economic return of that investment. For this reason, it is necessary to develop national or regional investment plans to encourage companies to invest in the 4.0 revolution. Companies that remain out of this revolution could disappear, as they would remain technologically obsolete with respect to their competitors. Before developing digitized systems, it is necessary to check if there are any prerequisites within the company to ensure the correct implementation of the new system. If there are no proper prerequisites, the first step to digitizing the company is to invest in training and information activities to train operators. As far as training operators in the chapter, the formation of the new working class 4.0 has been of great importance. Communication should start from high school, through school-work alternation and by providing basic knowledge of computer science and robotics, to make it clear to young workers what is the trend toward which we are moving. This chapter has also analyzed the various changes that companies will face, distinguishing between developed countries and developing countries. In addition, business, economic, and financial opportunities that can be exploited by implementing Industry 4.0 systems have been described. The chapter also presented softly the most important intelligent factory technologies such as big data and cloud data analysis systems, cyber-physical systems that allow self-regulating operations run by intelligent robots, simulation systems and virtual reality to train addicting operators, and additive manufacturing to develop more and more customized products that meet customer needs. In conclusion it is worthy to note that to face the challenges of the future it is strategic to digitize manufacturing processes and implement intelligent automated systems that can self-manage. The commitment must be extended not only to companies but also to governments, whose task is not only to develop investment plans that are easy for companies wishing to renew their processes but also to train young workers from high schools by making compulsory modules of computer science, automation, and foreign languages, to create a new generation of “workers 4.0” who possess the hard and soft skills needed to operate within the intelligent factory. Only in this way, it will be possible to properly implement the new Industry 4.0 practices and to make technological advances to companies and the whole civilization

Science, Technology and Innovation is Key for Facing Challenges in the Health Industry and for Economic Recovery after the Pandemic

The Danger Of Corona Virus

Covid-19 has attracted world attention to science, not just about the science for health, but also for supporting economic wellbeing.

Regrettably, we hear some lawmakers calling the Science, Technology and Innovation Ministry insignificant when many problems, including fighting climate change — a major threat to our survival — are difficult to tackle without help from science.

Finding the cure to many of the world’s challenges would always fall back on science, applicable to both infectious and non-communicable diseases.

We have just heard from Science, Technology and Innovation Minister Khairy Jamaluddin how the country was strategising to procure the right vaccine once it is ready and proven, together with the Foreign Ministry. It has been estimated that the cost to acquire the vaccine can run into billions of ringgit.