4th Industrial Revolution: Cities are not ready

According to a recent report, cities are not ready for the 4th Industrial Revolution. Detailed analysis reveals that even the most advanced cities are not as advanced as they thought they were.

Global Cities AI Readiness Index

The Oliver Wyman Forum produces the Global Cities’ AI Readiness Index. They examined 105 cities and rated each in four categories: 1) Vision, Priorities, & Mindset; 2) Activation; 3) Asset Base; and 4) Trajectory & Development.. Each of these ‘vectors’ had specific sub-categories as well. They grouped the cities into four sizes. See here for more detailed information on the methodology used.

The highest ranked cities were Singapore and London, with scores of 75.8 and 75.6 respectively. However, none of the cities are yet ‘ready’; all cities examined still need to make serious improvement.

No city is close to being ready for the challenges ahead. Sure, some are better prepared than others, but all cities will need to continue to make substantial improvements to fully prepare for the impacts of next-generation technology. To wit, no city is ranked among even the top 20 across all four vectors, and none appears in the top 10 across three vectors.

Oliver Wyman Forum’s Global Cities AI Readiness Index, Index Summary.

One of the conclusions from the study was that “City governments need to get real”. Often cities that do plan for the impacts of AI and other new technology focus on infrastructure and positive possibilities, which is only part of what is required. However, they frequently neglect the difficulties – the risks involved when transitioning into a new paradigm.

What is the 4th Industrial Revolution

The 4th Industrial Revolution is about to begin – or has already begun, depending on varying sources. New technology is accumulating and is already changing businesses, governments, education, agriculture – every field of human endeavor. Artificial Intelligence, Internet of Things (IoT), Machine Learning, and ‘smart’ technologies are all innovations that are changing the landscape.

The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.

Klaus Schwab, The Fourth Industrial Revolution: what it means, how to respond. World Economic Forum

Although no one can completely predict where these innovations will take us in the coming years, there is an opportunity to greatly improve people’s lives. According to Forbes: “Indeed, one of the greatest promises of the Fourth Industrial Revolution is [the potential] to improve the quality of life for the world’s population and raise income levels.”

Readiness should focus on Flexibility, not Predictions

Many futurists believe the impact to employment will be negative – possibly devastatingly so. I myself am not so pessimistic on that point, although certainly there is risk. However, the greater risk may be, as frequently is the case, the unknown. Many ‘experts’ predict this 4th Industrial Revolution is coming, but as with any revolution – no one can predict how it will go. Some areas that will be impacted are already identified; certainly cities will be smart to address these areas and prepare.

Internet Wire. Photo by Markus Spiske on Unsplash
Internet wire

However, flexibility is important. I am reminded of the university that was constructing a new building and, after consulting with ‘experts’, invested in having every seat wired for the internet. This was great for students, who only needed a short cable for their laptops and they were online. However, immediately after construction was completed it became clear that instead of using all of that wire – they should have simply installed WiFi. Furthermore, they were reluctant to do this, since they had so recently invested in the wiring. They adopted wiring, when WiFi turned out to be the winning technology.

pneumatic tube
Pneumatic Tube

Sometimes what we think will be widespread and ‘the future’, turns out to be a dead-end. Think of pneumatic mail tubes that were used in New York, Boston, Paris, and other major cities in the early 20th Century. They could send letters from Manhattan to Brooklyn in just a few minutes. Great idea; but did not endure. Nor did the technology progress to new technology. It was simply a dead end. That, of course, does not mean it was not a useful dead-end; this technology was successfully used for about half a century.

Correcting Mistakes

When people choose a path that turns out to be a poor choice or even a dead end, it can be difficult to correct. This can be a double problem: 1) the investment of the time and money; and 2) admitting that a better option is now available. Too often, no one wants to admit that, and in fact, may double-down on the mistake.

Abraham Lincoln Graffiti
Abraham Lincoln Graffiti

My old father used to have a saying: If you make a bad bargain, hug it all the tighter.

Abraham Lincoln

This is often true of government, where no one wants to admit the money spent last year was misspent. But this lack of vision can cripple a company – which does not have unlimited funds. Consider the apocryphal quote from the CEO of Digital: “There is no reason for any individual to have a computer in his home.” At the time it was one of the leading computer and technology computers; it would quickly decline and be bought out by another company, that company was, in turn, bought out by another company.

What may be identified as the next new technology or innovation that will transform society and the 4th Industrial Revolution, likely is another link in the chain of innovation. Perhaps it will lead to more innovations that will shape the future; perhaps it is a dead end. Either way, it is not always easy to predict when it is shiny and new.

Results of the Report

The Oliver Wyman Forum’s goal is to start a data-informed conversation over how the key stakeholders in today’s cities can focus on near, medium, and long-term goals to prepare and adapt to the one of the defining challenges of the 21st century. 

Oliver Wyman Forum’s Global Cities AI Readiness Index

The Index is interesting to review and the conversation sought is certainly worthwhile. As more people realize that important changes are occurring, the more they, as individuals or as cities, can prepare. Diversity in these preparations will be strength. If everyone prepares the same way, or each city prepared the same way – it would be a weakness. Far better for both to prepare uniquely and, consequently, an active ‘laboratory of ideas’ should be encouraged.

For Further Reading:

In December, we are holding Artificial Intelligence: Preparing for the Future Workshop. If you are in Tbilisi and interested in AI and the 4th Industrial Revolution, please choose a module and register!

Learn more about the Tbilisi Tomorrow Institute.

Timothy Barrett

Associate Professor of Law at the University of Georgia (Tbilisi, Georgia) and Research Fellow at the Tbilisi Tomorrow Institute. Prof. Barrett’s current research focuses on fields affecting the future, such as artificial intelligence, smart cities, data & privacy. Before moving to Georgia, he was a practicing attorney in the United States, with significant courtroom and jury trial experience. He has a background in civil law, working in private practice, as well as in criminal law, as a prosecutor and as a decorated police officer with the New York Police Department. Prior to law school, Prof. Barrett served in the U.S. Marine Corps Reserves.

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