“Technology is not an exogenous force over which we have no control. We are not constrained by a binary choice between accept and live with it and “reject and live without it”. Instead, take dramatic technological change as an invitation to reflect about who we are and how we see the world. The more we think about how to harness the technology revolution, the more we will examine ourselves and the underlying social models that these technologies embody and enable, and the more we will have an opportunity to shape the revolution in a manner that improves the state of the world.” ― Klaus Schwab, The Fourth Industrial Revolution.

Society has already witnessed three industrial revolutions before. These have drastically changed the way we live, work and communicate with each other. The First Industrial Revolution (1784) used water and steam power to mechanize production. A foundational shift occurred in society from being a rural agrarian culture to the build-up of industrial cities centred around large manufacturing factories. The Second Industrial Revolution (1870) used electric power to create mass production and infrastructure, like railways. Nations started shattering geographical barriers and were able to trade and communicate. The world was savouring the first glimpse of globalization. The Third Industrial Revolution (1960) used electronics and information technology to automate production. People refer to this time as the Age of Information.

The fourth industrial revolution is our present and future, and is markedly different from its predecessors because of the combination of factors: (a) integrated circuits on microchips, (b) memory units to store information, (c) networks that help to enhance communication, (d) software applications that provide a direct link to consumers’ needs and (e) sensor capacity that allows artificial intelligence to analyse most things which were previously only accessible to the human mind (Thomas Friedman 2016).

Professor Klaus Schwab identifies three main clusters, “megatrends” which are at the core of the Fourth Industrial Revolution; in physical, digital and biological spheres. The combination of physical, digital and biological trends in innovation will blur the line between digital and physical dimensions. This will create cyber-physical system, producing a radically new economic and social reality.

In the first instance we have physical trends referring to technological breakthroughs which are tangible and therefore easily identifiable, such as renewable energy, autonomous devices, 3D printing, advanced robotics and new materials.

Secondly, digital trends, marked by the upcoming software and other digital technologies which serve as a bridge between physical and digital dimensions. These technologies like blockchain, the internet of things (IOT), big data and new digital platforms are at the forefront of the digital revolution, where connectivity between digital and physical dimension provides the possibility for manufacturers, suppliers and consumers to connect and interact in novel ways.

Thirdly, biological trends, referring to the newest advancements in genome and synthetic biology which can allow us to drastically improve life expectancy and the overall quality of life but also raise problematic ethical questions about the nature of humanity, like the recent CRISPR case on gene editing on human DNA.

The introduction of new disruptive technologies in the previous industrial revolutions always brought about a fundamental change and challenge in the economic and political systems. The fourth industrial revolution is promising to be even more challenging than the previous ones.

We are already witnessing the effects of greater integration of the physical and digital dimensions, augmented network effects which will create a much more flexible system distributed throughout the network. In this economic system many goods and services will be based on the sharing economy, possibly on blockchain and utilizing more intelligence and automation through IoT and big data. It is envisaged that a radical change in the economic system will take place when automation combined with digitalization and powered by renewable energy sources will further foster the new digital economy. The effects of this economy are already altering the fabric of our society, existing legacy concepts and legal paradigms. The books “The End of Ownership: Personal Property in the Digital Economy “by Aaron Perzanowski and Jason Schultz and “Capitalism Without Capital: The Rise of the Intangible Economy” by Jonathan Haskel and Stian Westlake, delve on some of these issues and on how certain legacy concepts like ownership and property, struggle within the realm of the digital and shared economy.

The new industrial revolution will force us to redefine and change many of our laws and legal principles. Undoubtedly, adequate policy, laws and regulations are necessary to enable functioning of the new digital economy and to mitigate the risks associated with the fusion of digital and physical worlds. Harmonisation between different nations and their laws is also fundamental. Unprecedented legal challenges will continue to arise in many areas of law as the result of disruptive changes brought about by the fourth industrial revolution. From clarifying rights and obligations of digital assets in a nomadic society, which also touches on tokenization and cryptocurrencies to interacting and creating value on mediums and platforms which have no geographical boarders, and which will also bring radical changes in the concept of trust. The notion of liability will also be challenged, where automation, robotics and AI come into play and within a more distributed, shared and open source community. We have already witnessed laws like General Data Protection Regulation, the Payment Services Directive (2) and the new Electronic Communications Code, trying to embrace the novel dimension brought about by the Digital Economy.

We need to be prepared to accept a departure in radical legacy values too. The classical notions of freedom of movement of goods, people, services and capital, which served as the main pillars in the EU for example, are becoming less relevant to the new economic reality and the free movement of data started gaining more ground. This is just one example and as the full effects of this new economy continue to unfold, other realities will come into play. Nonetheless, evolution and innovation should be embraced and whilst thinking of ways how to maximize the outcome for society and counteract the negative effects of change, as Albert Einstein said “Life is like riding a bicycle. To keep your balance, you must keep moving”