Progress | Centre-left Labour politics

Labour renewal for the fourth industrial revolution

Just as the Labour movement was born in the giant factories of the Victorian age, so we will be reborn in the giant networks of fourth industrial revolution. These are the networks that connect hi-tech engineering firms, Uber drivers, ‘Mumpreneurs’, call centres and shopping centres, logistics hubs and incubators – along with public servants up and down the country. The simple truth is the economy is fast forwarding through change as profound as 20 years ago – and Labour will need new answers for new times.

The opportunity unfolding around us is immense. This week in Davos, the world’s elite will be debating what some call the second machine age – and others label the fourth industrial revolution. It’s character is defined by our ability to interconnect not just people – 30 per cent of the world’s population are now in reach of the cloud – but things, like cars or home appliances. Combine this with advances in quantum computing, robotics, energy storage, nano and biotech plus artificial intelligence and 3D printing. Some forecast unbelievable change that could mean the wipe out of five million existing jobs. First blue collar jobs went. Now, an awful lot of white collar jobs will be going the same way

It is going to be nice for some. These new, global digital product markets, often with near to zero marginal costs mean a fast track to billions for the lucky few.

But for millions of families it will mean life in what Charlie Leadbeater calls ‘the whirlpool economy’. They are surrounded by a digital banquet of unprecedented choices – yet they are cash strapped, insecure at work and, increasingly, living in a world cut deep by the most extraordinary inequality. In the United States, they call it the ‘gig economy’ – a place where workers have to top up pay on zero hours contracts in the ‘sharing economy’ selling their spare time, assets or products through AirBNB, eBay, Etsy, TaskRabbit or Uber. It is a profoundly insecure place to be; all too often a protection-free, hand to mouth way to live. It is near to impossible to accumulate wealth and assets – like skills, a decent pension or a home to call your own – many survive by the good grace of their credit card. That is why it may be a recipe for a world that is quite simply too unequal, too unstable and too unsustainable. And that is why this new world will need a renewed Labour party.

As Oxfam pointed out this week, global inequality is already unprecedented. Indeed, 62 people now own the same wealth as half the world. Yet that may well get worse, not better, as the fourth industrial revolution gets into gear.

So what does Labour do? I think Labour has to renew its offer with a simple idea. As Red Shift argued last week, we have to show how doing a few key things together helps all of us get on. We have to show how the ‘we’ helps the ‘me’. There are two big ways we need to do that.

First, we have to rewrite the rules for the way our economy works. As I have argued elsewhere, we have to change the rules for the Bank of England, the Treasury and our capital markets to encourage more patient, long-term investment in good jobs. We should change company boards so there are workers, with a long term view, at the helm. We have to transform support for entrepreneurs and transform technical education too.

Second we need to redefine and reinvent social security for new times. In a new world where gathering assets is harder for working families, we need to be debating ideas like lifetime savings accounts, co-financed by workers, government and business to help families save for student loans, retraining, a deposit for a home and a second pension.

I am confident we can get this right. Cooperation is part of the new zeitgeist. People believe more than ever, that they can achieve together more than they can achieve alone. The space is wide open for Labour to seize and own the future. Just as we did in 1945, 1964 and 1997.


Liam Byrne MP is member of parliament for Birmingham Hodge Hill. Liam’s pamphlet ‘Robbins Rebooted: How we make our living in the second machine age’ can be found here.

This piece forms part of today’s guest-edit of the Progress site by Stephen Kinnock MP, covering the discussions at Davos on the economy, business and the World Economic Forum’s central theme this year of ‘The Fourth Industrial Revolution’. Follow the guest-edit today here


Photo: Derek Gavey

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Liam Byrne MP

is member of parliament for Hodge Hill


  • I agree with a lot of this, but I wish there would be less homage to Uber etc as examples – most industries are undergoing huge change through technology and developing new business models.

  • Of course very few of lifetime innovations were well predicted at the time of their occurrence, so unlike this author the dogmatic assertion of the exact forms of this needs a dose of caution. But he is correct about the need for Labour to put itself at the forefront of decision making about how to deal with changes. Given the uncertainty about the actual implications of the future changes a reversal of Labour’s acquiescence to working people’s democratic deficit will be most important. In that respect heavy influence in company boards by the workers is well overdue. I welcome the changed mood that the new leadership is inspiring. The missing dimension here is the reinvigorated role of a national investment bank and of course the social ownership and control on its role.

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