Industry 4.0 challenges governments both positively and negatively.
On the one hand, it helps governments nurture an open, flexible, knowledgeable and skilled economy, by promoting trade outside of the traditional ways, by improving the effectiveness of the healthcare system and offers an advantage to those who know how to make best use of emerging technologies. On the other hand, governments could find themselves helpless against mega corporations, especially of taking into consideration the development of larger countries such as China and the U.S. The people will most probably start using technology for more autonomy, which will confront the power of governments and its institutions. An example of blockchain technology (meaning a growing list of records – blocks, that are linked using cryptography. Each block contains a cryptographic timestamp and transaction data. A blockchain is resistant to modification of data) is banking and personal finance. People could choose to trade with unofficial currencies such as bitcoins rather than official currencies run by central banks.
If governments fail to adapt to the new technologies, they will not be able to achieve the necessary efficiency needed for the growing demand of the public and cause damage to the reputation of the government. A study that was carried among hospitals and clinics in the UK, found that the most common complaint was the inability or limited access to Wi-Fi in these areas. Public areas will have to meet the peoples demands in the very near future.
What can be done?
David Lye, the director of Sami Consulting, stated in a report published by GE Reports (ge.com/reports) identified three scenarios on how the governments could deal with Industry 4.0.
- Managing the Market: The EU commission published its “Digital Single Market” strategy, for the best possible access to the online world for individuals and businesses and setting a framework of rules in which it expects technological changes to take place. The aim is to try to ensure stability and fairness for all.
- Taking Control: Large countries that do not have strong traditions in terms of Democracy, might attempt to introduce the newer technologies for either economic, domestic political or aggressive ends. The risk is that freer countries might be able to make faster progress and developing businesses, while taking advantage of countries who are trying to catch up.
- Open for business: Smaller governments might not be able to control the technologies of Industry 4.0, but they could attract invest, such as alluring tax regimes (for example Cyprus has one of the lowest EU tax corporates at 12.5%), investment in infrastructure (such as 5G) and being open to trade worldwide (a great example of a country that enlists all the above would be Singapore).
To conclude, the governments need to plan an approach to manage the impact of the transition to the new technology.
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