Column : The need for a fourth industrial revolution

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SummaryTo pull the global economy from the current economic slowdown.

I eagerly look forward to a book titled ‘The Blueprint: Reviving Innovation, Rediscovering Risk, and Rescuing the Free Market’ that is slated to be released in March 2013. The authors are three persons who are known for their cerebral competence and are proven champions in their respective fields. The first author is Garry Kasparov, who many consider to be the greatest chess player of all time. The other two authors are co-founders of PayPal—Max Levchin and Peter Thiel. Peter Thiel was also the first external investor in Facebook. The book claims to be an explosive manifesto that promises to launch a new era of global prosperity through ‘disruptive technologies’. As an IIT graduate, that means more worth for folks of my creed. But more seriously, that’s precisely the kind of ideas the world needs today because we have been woefully short of revolutionary innovations in the last decade. And here we are not talking about the kind of incremental advances like iPhones.

The last 250 years have seen remarkable technological innovations that have, in turn, driven economic growth. I am not a big believer in economic theorists like Robert Solow who postulate that economic growth is a continuous process that will persist forever. There was virtually very little economic growth before 1750, suggesting that the rapid progress made over the past 250 years could well be a unique episode in human history rather than a guarantee of endless future advances. If we think of innovation as the food that drives economic health, we can say that the quantity of innovation has definitely increased, but the same cannot be said about the quality of innovation or its utility. So it is very welcome that three original thinkers seem to have the answers to unlock disruptive innovation.

A useful organising principle to understand innovation in the last 250 years is the sequence of three industrial revolutions. The first industrial revolution (IR-1) with its main inventions between 1750 and 1830 created steam engines, railways and machines. The second industrial revolution (IR-2) was the most important, with its three central inventions of electricity, internal combustion engine and running water, in the relatively short interval of 1870 to 1900. As an aside, some extremely patriotic Indians argue that the running water system was invented in the Indus valley as far back as 3300 BC but it is difficult to imagine a 24x7 facility without the help of

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