Are we on the threshold of a fifth industrial revolution?

Al Gore raises the sustainability revolution. Will it mean the reunion of the industry with the environment?

Uncertainty is the only constant in this global process of pandemic crisis, which prevents us from being certain about the final impact of this global situation. It is already very difficult to recognize the degree of social change while we are immersed in it.

However, most views on the post-pandemic horizon ignore dystopian prophecies of systemic breakdown. This is how, for example, the global strategist Parag Khanna states: “The world was already going at different speeds, the pandemic is going to accelerate current trends”.

What is not a trend, but a fact, is that we face “the most abrupt planetary disruption of economic activity in history”, as the British economist Adam Tooze puts it. For this reason, as the Israeli philosopher Yuval Harari indicates, “the decisions we make will have an impact for years and decades and will reshape the planet”.

In this direction, and leaving aside the failure of “environmental diplomacy”, the European Union takes the lead in sustainable recovery and intends to produce a change of approach in 3 or 4 years, which under normal conditions would take between 15 and 20.

This is what is happening with renewable energies such as solar. According to Ramez Naam, one of the energy gurus of the Singularity University, generation values ​​were reached that were not expected to be achieved until 2035 (although it is true that oil also fell, its refining and transportation added costs).

This acceleration of trends literally finds half the world outside the fourth industrial revolution. Its result, a noticeable increase in inequality. In this context, in a recent article for Wired magazine, Al Gore raises the need for a “sustainability revolution”. The former candidate is currently President of Generation Investment Management, a $ 20 billion equity firm focused on sustainable businesses.

Marking the moment in which ideas and the role of actors are found, Gore highlighted that “in responding to the pandemic, there has been a growing recognition throughout the world of the new political and social realities that give us a generational obligation to change to a more sustainable world. Governments, businesses and investors have a role to play in ensuring that short-term emergency and recovery measures lead to a better and more resilient future”.

Expanding on the vision, the former Vice President stated that “there is an unmistakable and growing awareness of the need for change. The pandemic accelerated fundamental transformations in consumer and social behavior, and this corresponds to acceleration and innovation by governments and businesses. Second, we have found a growing awareness that the world’s collective social and economic faith is inextricably linked to that of the natural world. Now there is a widespread and shared understanding of what an existential threat could look like”.

In accordance with the principles of “Enviromental, Social and Governance” investments proposed by the World Economic Forum, which proposes moving from a shareholder capitalism -which focuses on financial and operational costs and benefits- to a model driven by stakeholders -focused on environmental and social risks and opportunities — Gore states that “there has been a fundamental shift in thinking in the business world and in the investor world. In just the last six months, both the Business Roundtable and the British Academy have made a fundamental change in their definition of the purpose of a corporation. They have dethroned the primacy of shareholders and have emphasized multi-stakeholder analysis and a long-term vision”.

The enormous growth of sustainable finance already has a guiding effect. And in them the role of the public sector is also relevant. As if agreeing with what Mariana Mazzucatto, an Italian-American economist, stated some time ago, it seems that governments are doing “what many traditional economists have told them to avoid: creating and forming new markets, accepting uncertainty and taking great risks”.

Among other bets of the public sector, the Next Generation Plan of the European Union willing billions of euros to promote digitization and the ecological transition that avoids inequality. At the same time, in order to eliminate the possibility of “greenwashing” (bad practice of presenting products as environmentally friendly even though they are not), Brussels defined a few weeks ago the criteria for sustainable investment.

Al Gore goes further; sees in this the key to a great expansion of the global economy: “We believe that we are in the early stages of a sustainability revolution, one that will be bigger than the Industrial Revolution with the speed of the digital revolution. We believe that it is the greatest investment opportunity and the greatest business opportunity in the history of the world”.

Overcoming the dichotomy between economy and environment, will this new “sustainability revolution” that we are experiencing, be the definitive closing point of the linear extractive cycle of the industry and its circular reconciliation with the environment? If the answer is yes, then it will be the beginning of the “Fifth Industrial Revolution”, with the human being as the center.

A version of this note was published in the 50th anniversary edition of “Revista Mercado”.

https://mercado.com.ar/economia-y-politica/estamos-en-los-umbrales-de-una-quinta-revolucion-industrial/

Author of the book “Economía Circular, el cambio cultural”