Globalization 4.0 – What does it mean? & How will it Affect India?

Globalization 4.0 upsc

Currently, the world is facing many threats like climate change, isolationism, global conflicts, unemployment, poverty, and inequality. Simultaneously, with the advent of the Industrial revolution 4.0, the world is also facing exciting changes like the emergence of self-driving cars, 5G networks, etc. However, the Industrial Revolution 4.0 has its downside. It is argued that, if the change is not addressed properly there will be negative implications like a further increase in unemployment and poverty crisis. The concept of Globalization 4.0 seeks to address these issues and promote inclusive and sustainable growth.

Globalization 4.0 upsc

What is Globalization 4.0?

  • Globalization 4.0: Shaping the Global Architecture in the Age of Fourth Industrial Revolution is the theme of the 2019 World Economic Forum.
  • The World Economic Forum is an annual meet that brings together the political leaders, economists, business leaders, celebrities and journalists into Davos, Switzerland to discuss various business deals, global issues, etc.

What was before Globalization 4.0?

  • Globalization is the phenomenon wherein the integration of the world is formed due to increased interactions and interdependence of the nations through communication, trade, and investments.
  • Globalisation 4.0 is a revolution that is propelled by next-generation innovative technologies like 5G, Artificial Intelligence, robotics, etc.
  • Many believe there have been three phases of the Globalization before globalization 4.0.
  • They are as follows:
  1. Globalization 1.0: This dates back from 1820 to 1914. This happened as the result of the industrial revolution and the use of the steam engine. This had no support from the governments or any international organisations.
  2. Globalization 2.0: This lasted from 1945 to roughly 1990s. Unlike Globalization 1.0, it had assistance through government interventions and international institutions like GATT/WTO, UNO, EU, etc. It was driven by market forces.
  3. Globalization 3.0: This era is dubbed as “hyper globalization” as it overlaps with the initiation of internet connectivity, the fall of the Berlin Wall and opening up of many emerging economies like India and China. This phase was characterized by the establishment of manufacturing industries abroad and increased the global supply chain.

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What are the features of Globalization 4.0?

  • Driven by Industrial Revolution 4.0: This the current era that is driven by cutting edge technologies like the 5G, AI, Internet of Things, nanotechnologies, autonomous vehicles, robotics, quantum computing, etc. The Globalisation 4.0 coincides with the current technological advances in the above-mentioned fields. These technologies have far-reaching implications to the current global politics as it reduces the distances and increases the connectivity between the global populations.
  • Impacts service sector: Globalization 4.0 has both positive and negative implications. In the previous phases of the globalization, there where the increasing focus was on people who manufactured goods and sold them in the global market. However, in Globalization 4.0, due to technological advancement and the fast-paced internet, some jobs in the service sector will have either a positive or negative impact. Some jobs may be hit like the translators and interpreters while some need not travel a long distance to carry out the services due to technological advancement.
  • Tele-migrations: Due to the advances in the fields of internet connectivity, automation, and Artificial Intelligence, one need not travel a long distance to resolve the daily problems. This reduces the cost of the service sector, transportation, etc.
  • Faster shift: In the current era of increasing connectivity, the pace of adaption to new technologies may be faster than the previous phases of globalization.

What are the challenges of Globalization 4.0?

  • Increasing political and global conflicts: In recent times, there have been increasing trends of isolationism and anti-globalisation rhetoric across the world. The closing down of markets in the global arena is creating slowdown of the global market. Despite global connectivity, it does little to resolve political tensions.
  • Inequality: There is little known about the outcome of the Globalization 4.0. However, based on the present scenario, with the increasing automation and little to no new skills developments in the fast-emerging technologies, there will be an increase in the job losses and the unemployment rate.
  • Challenges to the underdeveloped countries: Many countries in Africa, Latin America, and a few Asian Countries still do not have access to even basic technologies and infrastructure. Without the need for cheap human resource or investments, these countries may face a recession.
  • Increase the gap between the rich and the poor: With the increasing automation and technological boom, unskilled labour force has very little demand. While the productivity due to the automation will increase, it reduces the employment opportunities unless government interventions are made to assist those in need of jobs.
  • Lack of preparation: Currently the world is not prepared for the rapid technological growth. There are still limitations in the laws and government policies with regards to these technologies. This creates an environment that has very little security, privacy, ethics, and morality. Several countries don’t even have the basic infrastructure to support these advances.

What does this mean to India?

  • India is one of the highly populous countries in the world.
  • Its economy must be designed in such a way that every one of its citizens has job opportunities.
  • However, many of the Indian Citizens are either illiterate or have no skills that are essential to compete in the current job market.
  • Industrial Revolution 4.0 is characterized by increasing technological advancement that requires manning of the skilled labour force.
  • The advances made in the Industrial Revolution 4.0 are the need of the hour to solve the current problems like poverty, healthcare, connectivity, disaster management, etc.
  • The government has schemes safeguard the population from poverty but it has very little coverage on the skills development and technological development.
  • A meager budget is allocated for the research and development which is not sufficient to address the growing challenges of the globalization 4.0.
  • Though the population is quantitatively enormous, there are very few who will be able to compete in the Globalization 4.0.
  • There is no fixed strategy to address the decrease in the demand for the unskilled labour force.
  • There are new policies that are framed by the government to promote new technologies like Artificial Intelligence.
  • The Skill India mission now includes skill development programs in AI and IoT.
  • This is estimated to improve job opportunities for the Indian population.

What are the current issues that need to be addressed by India with regards to Globalization 4.0?

  • According to the annual report published by the World Economic Forum, in the top 10 most concerning issues that need to be addressed by the world includes lack of education, employment, economic opportunities, inequality, and climate change.
  • India needs to address these issues to stay on race in the global market.
  • Currently, the unemployment rate is at an all-time high, opportunities are decreasing and climate change is affecting the Indian farmers’ livelihood.
  • With the increasing political conflicts between the nations, India must take a stride to counter these protectionist ideas of the current economic powers to ensure open market to develop the Indian Economy.
  • With a very large population, the increased coverage of new and revised educational framework that is on par with the current trends and technologies is the need of the hour to ensure the full use of the human resource.

Way Forward

  • India must prepare for the next wave of globalisation through the reforms in education, skill development, and infrastructure development.
  • The government must also take measures to manufacture indigenous technologies that address the demands of Globalization 4.0 through increased investments in the research and development in the new and emerging fields of science and technologies. This will ensure wider and sustainable employment opportunities.
  • It is estimated that in a few years, the majority of the population will require re-skilling and up-skilling to remain in the job market. This needs to be addressed immediately to prevent future crisis.
  • Also, it is essential for India to take measures to address the looming threat of the climate change that is currently posing as a liability to the economy by promoting environmentally friendly policies like the promotion of electric vehicles, use of green energy, etc.
  • India must take rapid strides to adapt to the changing times for sustainable and inclusive economic growth.

Article by: K.G.Karishma

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