The ever-greater use of technology and automation is continually transforming the global economy.
But as connectivity between industries and countries increases, so the system becomes more fragile.
The world is open to catastrophic risks that can fell energy grids, companies and even country infrastructure.
The incredible advances — such as streamlined production, lower costs providing goods and services, and better connections between people and companies — come at the cost of higher risks of devastating attacks.
This is a point UBS highlighted in its white paper for the World Economic Forum annual meeting in Davos, Switzerland.
The UBS report “Extreme automation and connectivity: The global, regional, and investment implications of the Fourth Industrial Revolution,” sent to Business Insider, is epic, but there were six major points that stood out to us.
Here they are:
Hackers will be able to shut down entire power transmission or generations systems — “In particular, the rise of extreme automation and connectivity via ‘smart grid’ systems, while improving energy efficiency and helping match supply with demand more effectively” may vulnerable to hacks.
Cloud computing make it easier for hackers to bring down a series of companies, not just one — “… cloud computing allows companies to outsource a host of IT tasks via extreme connectivity, including software installation and server maintenance. But if the IT infrastructure of a large number of companies is managed and distributed by a single cloud-computing provider, the damage inflicted by hackers could be significantly greater than an attack on a single company.”
Emerging markets more the most exposed to attacks — “Without strong international and institutional frameworks governing the protection of data, cyber security, and internet privacy, access to the full benefits of extreme connectivity may be stymied.
Terrorists or dissidents are able to greater publicise their actions — “Extreme connectivity is also fostering geopolitical tensions. It increases the ability of diverse groups to organise protests and offers the potential for greater publicity to violent extremists.
Therefore “extreme connectivity has the potential to aid violent extremists” — UBS argued that this allows extremists to enhance its recruitment drive as well as generating publicity and propaganda, using the example of ISIS (also known as the Islamic State, ISIL and Daesh.)
Greater automation and use of technology will kill off lots of human jobs and therefore create greater economic inequality — UBS warned that automation threatens lower-skilled (and usually lower paid) workers’ jobs meaning that this could cause heightened political tensions due to “increasing economic inequality.”
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