Professor Lee Hyo-soo is developing an industrial revolution theory based on the creative evolution of general-purpose technology, and suggesting a new stage of economic development based on the theory of industrial revolution. According to Lee Hyo-soo's fourth industrial revolution theory, the fourth industrial revolution is caused by the interaction of four gears: (1) knowledge convergence ecosystem, (2) general-purpose technologies(GPTs), (3) start-up ecosystem, and (4) open platform. The stage of economic development is being implemented from an industrial economy to a creative economy, as the fourth industrial revolution reveals a new economic paradigm that is competitive. Since creative economy is an economy in which creative knowledge is a key production component, it should innovate educational markets, labor markets and employment relationships to maximize the production and utilization of creative knowledge.

1. ⓒ Prof. Hyo-Soo Lee2018-08-25 1
Hyo-Soo Lee, Ph.D.
Professor Emeritus of Economics, Yeungnam University
13th President, Yeungnam University
The First President, Daegu Creative City Forum
ILERA World Congress 2018
The Future of Work in the
Fourth Industrial Revolution

2. ⓒ Prof. Hyo-Soo Lee2018-08-25 2
I. Introduction
II. 4th Industrial Revolution and Transformation of the Labor and
Employment Relations?
III. 4th Industrial Revolution and Changing Work Environment
IV. Effects of the 4th Industrial Revolution on the work world
V. PDR Systems Theory as an Analytical Framework of Employment
Relations
VI. New Employment Relations in the 4th Industrial Revolutions
VII. Conclusions
The Future of Work in the Fourth Industrial Revolution

3. ⓒ Prof. Hyo-Soo Lee2018-08-25 3
<Figure 1> Lee’s Theory of the Industrial Revolution
Source: Lee, Hyo Soo, Creative Economy (in Korean), Maeil Business Newspaper, 2014, pp.57-61.
Creative
evolution of
GPTs
• Creative Evolution of General Purpose Technologies(GPTs)
• Chains of Creative Changes by the GPTs Creative Evolution
• Diffusion of Creative Changes
• Dramatic Changes of Productivity & Production System
• Dramatic Changes of Industry Structure & Consumption Pattern
• Emergence of New Economic Paradigms for Competitive
advantage
• Shift of the Stages of Economic Development
Butterfly
Effect
Industrial
Revolution
Shift of
Economic
Paradigm

4. ⓒ Prof. Hyo-Soo Lee2018-08-25 4
<Table 1> Lee’s Theory of Economic Development Stages
Creative evolution of
GPTs Industrial Revolution
Stages of Econ.
Development
* Iron/Tool Development
* Crops & Cattle
The 1st Industrial Rev.
Agricultural Rev. 1.0
The Iron age
The middle ages Agricultural
Economy
* Ley(New) farming Agricultural Rev. 2.0 the UK, 17th C.
* Steam engine
* Mechanical inventions
The 2nd Industrial Rev.
Industrial Rev. 1.0
The UK
1760-1830 Industry
Economy* Mass Production System
* Electricity Industrial Rev. 2.0 The US, early 20thC.
* Computer
* Internet
The 3rd Industrial Rev.
ICT & Knowledge Rev.
The US
The late 20th C.
Knowledge
Economy
* Knowledge
convergence ecosystems
* GPTs(AI, IoT, AR, 3D )
* Open platform
The 4th Industrial Rev.
Creative Rev.
The US
The early 21th C.
Creative
Economy
Source : Lee, Hyo-Soo (2014), Creative Economy (in Korean), Maeil Business Newspaper (MK publishing), p.62.
❖ The 4th Industrial Revolution: Lee, Hyo-Soo(2014) & Klaus Schwab(2016)
Lee, Hyo-Soo (2014), Creative Economy ; Klaus Schwab(2016), The Fourth Industrial Revolution, WEF.

5. ⓒ Prof. Hyo-Soo Lee2018-08-25 5
Creative Economy!
Why, How & What ?
The Rise of Creative Economy and
The Fall of Industrial Economy
The Creative Economy is a New
Economic Paradigm and a New Stage of
Economic Development by the Fourth
Industrial Revolution, regardless of a
Government’s Policy Option and Naming.

6. ⓒ Prof. Hyo-Soo Lee8/25/2018 6
<Figure 2> Lee’s Theory of the 4th Industrial Revolution
(4 Gears for the 4th Industrial Revolution)
• Accelerators
• IP Markets
• Venture capital
• Sharing economy
• Network economy
• Croud / Cloud
• AI
• IoT/IoE, VR/AR
• Blockchain/BMI
• 3D printing
• Search engine
• Super-intelligence
• Hyper-connectivity
• Big data
Knowledge
Convergence
Ecology
General
Purpose
Technologies
Start-up
Ecology
Open
platform
• Search engine
• Super-intelligence
• Hyper-connectivity
• Big data
Knowledge
Convergence
Ecology
General
Purpose
Technologies
Start-up
Ecology
Open
platform
Source: Lee, Hyo Soo, Creative Economy (in Korean), Maeil Business Newspaper, 2014, pp.103-128

7. ⓒ Prof. Hyo-Soo Lee2018-08-25 7
Major Impacts of the 4th Industrial Revolution on the work world (A)
A. Will Jobs Increase or Decrease? /Technical Unemployment?
❖ GPTs : Creative destruction
➢ Job Creation Effects / Job Destruction Effects
❖ JCE > JDE until the 3rd Industrial Revolution
❖ JCE < JDE in the 4th Industrial Revolution
➢ JCE : 1) New industry creation, 2) productivity effect
➢ JDE : Labor saving technology
❖ What is the major difference of the impact on the jobs between
the 4th industrial revolution and the previous industrial revolutions?
1) Super-intelligence and hyper-connectivity
2) atypical jobs and independent AI
3) typical jobs and human-dependent automation

8. ⓒ Prof. Hyo-Soo Lee2018-08-25 8
Major Impacts of the 4th Industrial Revolution on the work world (B)
B. The Great Changes of Occupational Structures
❖ White-/Blue-collar Jobs ⇒⇒ Creative / Non-creative Jobs
❖ Many parts of traditional jobs for white-collar and blue-collar
workers are non-creative jobs. These non-creative jobs will be
taken over by the various intelligent robots because the robots
have competitive advantage over workers in productivity and
efficiency. The robots do not raise labor issues, working for 24
hours.
❖ The classification between creative and non-creative jobs is more
important than classification between white-collar and blue-collar
jobs, because many non-creative jobs gradually will be taken by
the intelligent robots.

9. ⓒ Prof. Hyo-Soo Lee2018-08-25 9
Major Impacts of the 4th Industrial Revolution on the work world (C)
C. Decreasing the Quality of Employment, and Increasing Polarization in
the Labor Market
❖ White-collar workers, Blue-collar workers, casual workers
❖ Creative workers, Non-creative workers (skilled/Non-skilled
workers)
❖ Decent jobs decrease as the most routine jobs in production,
service, and administration are automated.
❖ Gig jobs for the cheap labor
❖ Creative workers and non-creative workers will be polarized in
the labor market. This will lead to a collapse of the middle class.

10. ⓒ Prof. Hyo-Soo Lee2018-08-25 10
Major Impacts of the 4th Industrial Revolution on the work world (D)
D. Ever-changing Job Contents and Fast Retraining
❖ One of the most important features of the fourth industrial
revolution is that job contents have been changed continuously
because of frequent creative destructions by fast technical
progresses.
❖ Workers should learn new knowledge and skill to understand
new jobs and the changed contents of the existing jobs.

11. ⓒ Prof. Hyo-Soo Lee2018-08-25 11
E. Employment Relations should be renovated because
of the shift of the economic development stage.
❖ New Employment Relations?
Major Impacts of the 4th Industrial Revolution on the work world (E)

12. ⓒ Prof. Hyo-Soo Lee2018-08-25 12
<Figure 3> PDR Systems Theory as an Analytical Framework of
Employment Relations
Source: Adapted from Lee (1996a; b, 2001)
❖ The humanware is the key driving force of the PDR systems.
❖ The humanware is the ware that converts human resources into
creative resources.

13. ⓒ Prof. Hyo-Soo Lee2018-08-25 13
1. The 4th
Industrial Revolution and Strategies for Competitive Environments
• Super-intelligence, Hyper-connectivity, High uncertainty, Rapidchange
• Open innovation, Open platform, Sharing economy, Networkeconomy
• Creative evolution, Creative change
2. Actor’s Value & Power Position
• VIP leadership, Talentism, Positiveindustrial relations
• Unbalanced power position, Creative class
3. PDR Systems
1) Production System
• Creative humanware: Y-type talent, Collective creativity
• Innovative software: Network organization
• Intelligent hardware: Smart factory
2) Distribution System
• Performance based wage system
• Attractive fringe benefits
• Various opportunities
3) Rule-making System
• Empowerment
• Self-management
• Corporate culture of trust
4. Performances
• Mutual gains (Productivity / Workers’ quality of life)
<Table 2> PDR Systems in the 4th Industrial Revolution

14. ⓒ Prof. Hyo-Soo Lee2018-08-25 14
What is the Policy Options on the work world?
❖ Flexicurity and Fair Opportunity for All Citizens
We will be in trouble more and more by the potentially
contradictory issues of ‘flexibility’ and ‘polarization’ in the
labor market.
There is no choice but to enhance labor market flexibility to
survive in the rapid-changing global market.
The problem is that the polarization of both employment
and wage has become more serious in increasing flexibility,
which leads to the collapse of middle-class.
What is the solution? ⇒⇒ NESAP, RESAP

15. ⓒ Prof. Hyo-Soo Lee2018-08-25 15
An urgent issue with the future of work is to find a way to preserve
or increase decent jobs in an era of the fourth industrial revolution.
There is a high risk of getting into a low road leading to the collapse
of the middle class in the transition period.
We need to establish an open platform such as ‘N(R)ESAP model’
(Figure 4) to make a high road and to shape the future of work in a
right direction.
The platform consists of three levels: (1) NESAP in the national
level, (2) RESAP in the local level, and (3) Employer and Employees
partnership for PDR Systems in the firm level.
What is the solution?
NEASAP, RESAP and Innovative PDR Systems

16. ⓒ Prof. Hyo-Soo Lee2018-08-25 16
<Figure 4> National (Regional) Economic & Social
Advancement Partnership (NESAP / RESAP) Model
Note: Adapted and modified from Lee (2008)

17. ⓒ Prof. Hyo-Soo Lee2018-08-25 17
Concluding Remark (1)
In this paper, we discussed 5 major issues regarding the future of
work in the era of the 4th Industrial Revolution:
(1) the outbreak of the fourth industrial revolution and its impact on
the world of work,
(2) declining jobs and increasing technological unemployment,
(3) re-classification of occupations from white-collar/blue-collar
workers to creative/non-creative workers,
(4) polarization of labor market and the collapse of the middle class,
(5) re-structuring of PDR systems for mutual gains in employment
relations,

18. ⓒ Prof. Hyo-Soo Lee2018-08-25 18
Concluding Remark (2)
❖ Will you work with artificial intelligence? Or will it be
replaced by artificial intelligence?
➢ The future of the work depends on actors’ strategic choices
on PDR systems.

19. ⓒ Prof. Hyo-Soo Lee2018-08-25 19
We can make a production software system such as job design
and job structure in the perspective of AI (Artificial Intelligence) as
an intelligence assistance (IA) or an independent actor (‘IA’).
AI as an intelligence assistance will change job contents but
provide new jobs for people. However, AI as an independent actor
will destroy lots of jobs against people.
The former is the high road that provides complementary
relations between people and artificial intelligence, while the latter
is the low road that means replacement of jobs by AI.
➢ The road will be determined by the design of the PDR systems.
Concluding Remark (3)

20. ⓒ Prof. Hyo-Soo Lee2018-08-25 20
References
• BMAS, White Paper Work4.0, 2017.
• Lee, Hyo-Soo, Economics of Talentism-Labor Market and Employment
Relations, Topbooks, 2015. (in Korean)
• Lee, Hyo-Soo, Creative Economy, Mail Business Newspaper, 2014.(in Korean)
• Lee, Hyo-Soo, Y-talents, Mail Business Newspaper, 2012. (in Korean)
• Lee, Hyo-Soo, “RESAP model: Vision and Strategies for the Knowledge
Economy, Korea: Proposal for a New Type of Partnership”, More than Just Jobs,
OECD, 2008, pp.227-247.
• Lee, Hyo-Soo, “The Interaction of Production, Distribution and Rule-making
Systems in Industrial Relations”, Relation Industrielles / Industrial Relations, Vol.
51-2, 1996.
• Stefen Hail and Ryo Takahashi, “These four technologies will shape the
creative economy for better or worse”, World Economic Forum, 2017. 5.

21. ⓒ Prof. Hyo-Soo Lee2018-08-25 21
Thank you!
http://blog.naver.com/hyosleegiu
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