Destructive Creation

The debate regarding the impact of new technologies on jobs and the organisation of work has raged for decades, if not centuries. We talk today about the fourth industrial revolution, following on from the first, second and third industrial revolutions. To gain insights into what the potential impact of the current phase of disruption might be, taking a look at previous industrial revolutions is both logical and revealing. In this short contribution, an attempt is made to provide some analytical insights into the possible consequences of the fourth industrial revolution for work and incomes. What has become a central concern in the current industrial revolution debate is the increasingly skewed distribution of the innovation rents associated with digital innovations and the digitalisation transformation. The record on addressing the distribution of innovation rents since the third industrial revolution has been disappointing to say the least. The current stage of development is typified by rising inequality, and a trend towards a race to the bottom in existing European social welfare systems. The ‘rents’ from digital innovation affect income distribution and benefits directly, particularly in the top income groups through shareholders and investors, top executives and key employees of the ‘winning firms’ who often own capital and hold managerial and leading positions in firms. By contrast, average workers have been confronted with more competition in the labour market, are increasingly employed in temporary work arrangements, and are becoming subject to national low-wage competition policy pressures. Adding it all up explains why the share of capital (as opposed to labour) in national income has increased, particularly in innovation-intensive economic activities.AS a result, the global digitalisation transformation of society has many more implications than those dealing with employment and the organisation of work. Probably the most immediate question is the extent to which the extreme concentration of wealth and economic power associated with digital innovation will ultimately lead to a similar extreme concentration of political power, which might ultimately undermine democracy