Pavel LukshaSKOLKOVO School of Management

Global Education FuturesBRICS Skills Development Working Group

Facing consequences of Industry 4.0 revolution:

global & BRICS perspective

Two events that “sent shockwaves over

planet” in last six months

Donald Trump wins Britain votes Brexit

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Who voted for it? Older and less educated (and

white, concerned about immigration)

Donald Trump wins Britain votes Brexit

AGE GROUP

EDUCATION LEVEL

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One of the key reasons in the US: increased

mortality of middle-aged working white population

Life span of US white decreases –unlike all EU countries (non-white US – increases)

Major reason for early death: alcohol, drugs & related diseasesThis group is “killing itself”

Source: http://www.pnas.org/content/early/2015/10/29/1518393112

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Something similar happened in Russia

a decade earlier

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Primary reason:

uncertainty about their future

US “Rust Belt” after mid-1990s Russia after 1990

Destruction of jobs due to globalization, technological changes, and closure of “inefficient” or “obsolete” sectors creates mass-scale stress of industrial workers - especially if they realize that strikes don’t solve the problem

… and so they vote to “make their country great again”, to reverse things as they were

This is just the beginning: Industry 4.0 brings

the wave of automation & autonomization

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Existing (industrial) model: 60-70% of jobs

directly or indirectlyserve systems of mass

production

Economy 2035: production & logistics can be up to 95-99% unmanned, and up to 50-70% of jobs in related services can be replaced

by AI

Technologies of automation & autonomization (2016-35): robotics, Internet of Things, Big Data & Artificial Intelligence, autonomous energy generation & smart grids, unmanned transportation & logistics, designed bio ecosystems, etc.

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… further enhanced by range of complimentary

technological & social disruptive innovations

Biotech: biofuel, food, materials etc.

3D printing: from organs to houses

Fintech: cryptocurrencies, smart contracts etc.

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Mass extinction of blue & white collar jobs

2 BILLION JOBS WILL BECOME OBSOLETE GLOBALLY IN NEXT 15-20 YEARS

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We should realize that Industry 4.0 is

a job destroyer on a mass scale

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Are we ready for it?

… at least, it’s on the radar of global leaders

How may the transforming economy look

in next 15-20 years?

Mass-scale industrial manufacturing (e.g. energy, natl

resources, food, chemistry & new materials, machinery & equipment

etc.): highly autonomous cyber-physical manufacturing systems

Customized end-user manufacturing (consumer

electronics, consumer transport, apparel, furniture etc.): localized

personalized production based on 3D manufacturing

Manufacturing sector

Digitalized & machine-assisted massive use services (e.g. digital

health, digital entertainment, unmanned transportation, post-

retail distribution, etc.)

Customized highly-personalized services (e.g. wellness,

psychotherapy, fitness & tourism, hospitality, personalized art &

entertainment, etc.), both digital & physical

Service sector

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Source: Global Education Futures

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Human centered services:

most likely, the main job creating sector

~60% of jobs directly or indirectly serve systems of mass

production (incl. design & engineering, finance, marketing

etc.)

Existing (industrial) model

~5-10% of jobs “feed” us (agriculture)

~20-25% of jobs are human-to-human services (incl. education, healthcare, wellness, govt etc.)

Not more than 10-15% of high-skilled jobs (direct + indirect) remain in food, commodity & goods mass production due to automation

Explosive growth to 50-60% of jobs in human-centered services (incl. new services) as they are least susceptible to automation

Emerging model of 2035

25-30% of jobs migrate into personalized manufacturing &

urban-related jobs

Source: GEF estimates

Various technologies of automation & autonomation(2015-30)

Massive shifts of job market structure within less than one generation will require multiple mechanisms to smoothen transformation (including education & training)

~10% of jobs: urban-related services & products

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Furthermore: emerging and less

developed economies may get left behind

4th industrial revolution begins to reindustrialize developed countries (including the production of food in these countries), potentially further enhancing global inequalities

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Strategies that may help cope

with emerging global realities

New sector creation

As developed countries (esp. US, Japan, South Korea, and Germany) continue to implement their strategy of Industry 4.0 (and related technologies), “gearing up” seems to be the only feasible option for emerging economies, even though it will come with job destruction

Human centered services

Human-centered services (and highly customized production) are sectors less susceptible to automation. A recipe for success: anything with “human touch” coupled with self-employment skills

Rise of virtual economy

Citizens of developed & developing countries will increasingly spend their time online (already 6 hours / day in US and 4 hours in SA). In 15 years, economies inside virtual worlds may arise as leading job creators

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To catch up with new realities,

economies need new employee skills

• Concentration & attention management• Flexibility & adaptability • Self-development + ability to unlearn / relearn

throughout life

Meta-skills

Key professional

skills

• Multidisciplinary work (T-specialist to m-specialist)• Multicultural + multi-lingual competencies• IT competencies• Working in distributed (IT enhanced) environments

• Problem- and opportunity oriented thinking• Entrepreneurial skills: acting in uncertainty & taking

responsibility (for VUCA environments)• Creativity (incl. “right-brain” creativity)• Collaboration• Empathy & emotional intelligence• “Ethics of responsibility” (social + environmental)

Soft skills

Source: Skills 2030 Foresight, Global Education Futures

… and new types of managerial skills, too

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Collective intelligence AI-enhanced real-time management

Fluid organizations: removal of artificial barriers (work / learn / play / serve)

Human focus / meaning above process

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Will we be able to prepare it with the

existing education model?

Check www.edu2035.org for some answers!

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How is BRICS faring?

BRICS situation: shifting from resource-

based to knowledge based economies

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BRAZIL 2025?

RUSSIA 2025?CHINA 2025?

INDIA 2025?

SOUTH AFRICA 2025?

• From manufacturing to full scale knowledge-based economy

• New centers of economic activity

• Sustainable energy & infrastructure

• Development of infrastructure for economic transformation:

• Growth through new hi-tech sectors (National Technological Initiative etc.),

• Cultural innovations & growth of creative industries

2025?

Sources: working group discussion results,for China: China State Council 10-year plan

Generation of jobs (12 mln jobs annually) with high economic growth • manufacturing+ green economy; • infrastructure development; • energy security + renewable energy (esp. solar), • ICT sector development

• Nation building + social equality

• Infrastructure development for the country & macro-region of Africa

• Growth through new sectors

• Developed infrastructure for the country and South America

• Emerging actor in knowledge economy around new manufacturing sectors

• Shifting towards “green” economy, incl. renewable resources & sustainable agriculture

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BRICS situation: looking for breakthroughs

in Industry 4.0 and emerging sectors

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Enabling new sector creation in Russia

through skills development: some cases

Clusters with skill dev component: InnoPolis Hi-Tech City

Innopolis is a new Russian city, located in the Republic of Tatarstan. The city’s economy is based on high-tech industries. In Innopolis, a unique environment has been created that combines a modern residential infrastructure in harmony with the nature, safe environment, and broad opportunities for education and professional development. Innopolis University is a Russian higher education institution focused on education and research in the field of IT and Robotics.

Next gen technical universities: Moscow Polytech University

Founded in 2016 on the base of the Engineering University & Moscow State University of Printing Arts One of the largest technical universities in Russia. The mission of the University is to train engineers and managers for enterprises of the real sector of the economy, including the military-industrial complex, and engineering elite, who would have competences of project work.Partnership with SAP on skills of Industry 4.0

STEM Clubs for Youth:“Super-Engineers of the future”

Program targets children & youth between 10 & 18. Search for talents in new sectors (robotics, IoT etc.), primarily in large cities covered by Quantorium Youth Technoparks program.Partnership with top Russian IT companies (ABBYY, Kaspersky, Yandex, …) and leading MNCs (IBM, Microsoft etc.)

Competitions focused on tech talent:WorldSkills HiTech & JuniorSkills

Competitions based on WorldSkills methodology that are centered on talents necessary for Industry 4.0 skills and advanced manufacturing skills. New types of competitions: life cycle management, competition of experts. “Laboratory” for new skills (e.g. “neuropiloting”) and new training methodologies (e.g. biofeedback-enhanced hard skill training)

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(Very rough) assessment of BRIC

countries readiness for the new reality

China

Brazil

India

Russia

New sector creation

Human centered services

Rise of virtual economy

~ ?

?

~ ~

~

South Africa: you are welcomed to assess

Looking beyond Industry 4.0:

is there light at the end of the tunnel?

Top 10 challenges of next decade according to WEF

Key solutions: shift of the model of economy & society

Do you see an opportunity for job creation? Or – can you see much more?

6 out of 10: humanity-nature relationship!

Technologies of sustainable manufacturing: renewable energy & materials, recycling etc.

Changed model of economy: network based regenerative localized economies

Changed model of urbanization: cities as nature re-creators / natural eco-systems

Changed (global) governance: global coordination of long-term development & risk management

Water crises (#1) Weak climate change

response (#2) Extreme weather (#3) Food crises (#4) Biodiversity loss (#6) Natural catastrophes (#9)

All of these transformations are driven by new mindset & behavior - enabled by new skills & knowledge