Transitional society in modificatory conditions and challenges of fourth industrial revolution

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Transitional society in modificatory conditions and challenges of fourth industrial revolution

N.M. Kovtun, N.V. Ventsel

Abstract

The object of this study is the impact of the Fourth Industrial Revolution (Industry 4.0.) on social life and modernization processes in Ukraine. The prognostic analysis of the Fourth industrial revolution consequences for modern Ukrainian society is the purpose of this research. The article deals with the obvious consequence of Industry 4.0 elements (such as the Internet providing, robotics, and digitization) implementation in both the countries of the center of the «World-system» as well as transition societies. It's the threat of mass increase in unemployment, the spread of spontaneous forms of population migration, incessant marginalization of social life and urbanistic environment threats deepening. It is proved in this research that it's the richest and most intellectual part of society who gets benefits and is able to take full advantage of the latest technologies from the implementation of Industry 4.0 results.

At the same time low-skilled workers will face the threat of job loss and permanent job searching process due to the implementation of the Fourth Industrial Revolution achievements. To our mind, massive increase in unemployment in Ukraine as well as other Central and Eastern European countries due to Industry 4.0 will turn into a serious source of social protests and instability, causing unprecedented challenges for the social life. It is stated in the research work that in a situation of economic backwardness, obsolescence of _fixed industrial assets, merging of authorities with oligarchy, and the spread of corruption, the over-rapid implementation of Industry 4.0 elements in transition societies can lead to social disintegration processes increasing. Thus, the key criterion for the implementation of Industry 4.0 in transitional societies should be matching public needs with the interests of a particular citizen. We consider that the research of its impact on symbolic production and exchange, the way of everyday life, and the transformation of the urban environment in the Europe, in particular the countries of Central and Eastern European community, is particularly important. It's necessary because the marginalization of a large part of the population, social pessimism and high migration expectations diminished critical thinking and developed of fascination with historical mysteries, myths or plots of TV programs, and etc.

Keywords: Modernization Projects, Industry 4.0, Symbolic Production and Exchange, Social Activity, Urbanized Environment, Central and Eastern European Countries

Анотація

Суспільство перехідного типу в умовах модернізацій них викликів четвертої індустріальної революції

Н.М. Ковтун, Н.В. Венцель

У статті проаналізовано вплив четвертої індустріальної революції (Industry 4.0) на соціальне життя і модернізаційні процеси в Україні, як об'єкт дослідження. Прогностичний аналіз наслідків четвертої промислової революції для сучасного українського суспільства є метою даного дослідження. У статті розглянуто вагомі наслідки впровадження елементів Industry 4.0 (інтернетизації, роботизації, діджиталізації) як у країнах центру «світ - системи», так і в суспільствах перехідного типу. Встановлено, що є загроза масового зростання рівня безробіття, розповсюдження стихійних форм міграції населення, невпинної маргіналізації суспільного життя, поглиблення загроз урбанізації.

Доведено, що від впровадження результатів Industry 4.0 переваги отримає найбагатша і найбільш інтелектуальна частина суспільства, яка уповні зможе скористатися новітніми технологіями. Натомість малокваліфіковані працівники через впровадження досягнень четвертої індустріальної революції постануть перед загрозою втрати робочих місць і перманентного пошуку роботи.

Вважаємо, що масове зростання безробіття в Україні та інших країнах Центральної і Східної Європи внаслідок четвертої промислової революції стане важливим джерелом зростання суспільних протестів і нестабільності, створюючи безпрецедентні виклики для соціального управління. У дослідженні встановлено, що в ситуації економічної відсталості, застарілості основних виробничих фондів, зрощенні владних структур з олігархатом, поширенні корупції надмірно швидке впровадження елементів Industry 4.0 у суспільствах перехідного типу може призвести до посилення дезінтеграційних суспільних процесів. Отже, ключовим критерієм впровадження Industry 4.0 у перехідних суспільствах має стати узгодження суспільних потреб з інтересами конкретного громадянина. Ми вважаємо, що дослідження її впливу на символічне виробництво й обмін, спосіб повсякденного життя в європейській спільноті, зокрема в країнах Центральної та Східної Європи, будуть особливо важливими. Це потрібно тому, що маргіналізація значної частини населення, соціальний песимізм і високі міграційні очікування зменшили критичне мислення й розвинули захоплення історичними таємницями, міфами чи сюжетами телепрограм та ін

Ключові слова: модернізаційні проекти, Industry 4.0, символічне виробництво та обмін, соціальна активність, урбанізоване середовище, країни Східної та Центральної Європи

Main part

Introduction of the issue. In recent years the acceleration of the modern «World system» development has been accompanied not only by the globalization processes activation, but also by the rapid Fourth Industrial Revolution elements introduction in the countries of the center of the «World system». The relevance of Industry 4.0 social impact research in Central and Eastern Europe is caused by the complexity and repeated failures of modernizing processes in their economy at the beginning of the 21st century. They touched many spheres of social life, painfully affecting public sentiment, intellectual practices and social expectations. The marginalization of a large part of the population, social pessimism and high migration expectations, diminished critical thinking and fascination with mysteries in the national cultural heritage etc became a «business card» in people's daily lives. For example, Ukraine still has significant economic and technological backwardness from developed countries, and that has a very negative impact on public life in the post-totalitarian period. And public challenges for Ukraine are only increasing in the conditions of Crimea annexation by Russia and military actions in the east of the country.

Current state of the issue. The research of its impact on symbolic production and exchange, the way of everyday life, and the transformation of the urban environment in the European community, in particular the countries of Central and Eastern Europe is particularly important. Some aspects of Industry 4.0 results impact on solutions to the problem of confrontation «center-periphery» have become the subject of scientific interest of philosophers, sociologists and others. We should emphasize comprehensive research work made by an international group of scientists led by M. Piccarozzi and B. Aquilani [1] which provides a thorough analysis of the scientific literature devoted to the Fourth Industrial Revolution problems analysis. However, in the socially philosophical paradigm still lacks systematic studies of both the specifics of Industry 4.0 elements implementation in Ukraine and the probable social consequences of the fourth stage of industrialization for Central and Eastern European countries.

It should be mentioned that since the beginning of industrialization process the social and economic development of the countries of the world-system has been heterogeneous and remains the same. It's been confirmed in the last decades that the technological abyss between the core countries (kernel countries), countries of semi-periphery and periphery of the world - system have been irreversibly growing. Although these countries are still in various stages of social development, they are automatically involved into Industry 4.0 innovations due to globalization processes. According to one of the promoters of the Industry 4.0, K. Schwab's concept proclaimed back in 2011, total automation of production, lines and products, interacting with each other and with consumers within the concept of the «Internet of things» is peculiarities of the Fourth Industrial Revolution [2]. The concept of the «Internet of things» provides the production of products focused on a specific consumer and exclusively for his needs. In addition to the robotics and the Internet providing of manufacturing and services, digitization of various spheres of production and service is Industry 4.0's attribute. All three compound parts of the Fourth Industrial Revolution will have far - reaching consequences in the future; the main ones are the threat of mass unemployment, spontaneous social activity growth, marginalization of a large part of the population, unpredictable migration processes and the irreversible transformation of a human being urban environment.

Developed countries of the world, kernel countries (the «Golden Billion») first of all, and some semi-peripheral countries are already taking advantage of production based on the technologies of the Third Information and Fourth Industrial Revolutions. Due to that they successfully export hightech goods and services, including computers, the latest gadgets and mobile phones, software etc to the poorest countries while earning extremely high financial returns. At the same time «Third and Fourth World» countries still use the traditional technologies of the First and Second Industrial Revolutions and remain a source of cheap labor and raw materials for developed countries.

The outline of unresolved issues brought up in the article. The analysis of the probable consequences of the Fourth Industrial Revolution results implementation in modern scientific literature has not yet acquired a systematic character.

The purpose of the research work is a prognostic analysis of the Fourth Industrial Revolution consequences for modern Ukrainian society.

Results and discussion. However, the implementation of the Third and Fourth Industrial Revolutions results, even in the countries of the center of the world system, particularly in terms of productivity growth, has not only reduced the employment of low - skilled workers, but also highly qualified engineering but also highly skilled engineering workers and employees [3]. So, on the one hand, the dismissal of millions of workers in various industries in developed countries is a direct consequence of Industry 4.0. However, on the other hand, we should mention that the first and second industrial revolutions (electricity, radio, telephone, airplane, etc.) accelerated economic growth in future perspective as well as and qualitatively changed for the better life of a large part of the world population.

In a situation of acceleration of nonlinearity of the modern world-system development, developing countries find themselves in a situation when their economic and social structures combine elements of pre-industrial, industrial and post-industrial society. Many of them do not yet have industries that witness their passing second and third industrial revolutions. However, they have already faced the necessity to adapt to the Industry 4.0 conditions. It is in this situation that Ukraine found itself, as it inherited the industrial-agrarian economy after the collapse of the USSR.

At one time, the achievement of the Third and Fourth Industrial Revolutions led to a dramatic reduction in mortality in the center and the semi-periphery of the world-system. However, in developed countries of the West the processes of emancipation and liberalization of legislation concerning family values became the basis for the fall in fertility. Long-term population decline in the kernel countries of the world system (Germany, France, Japan, etc.) is going on alongside with rapid population growth in the periphery countries, especially in the poorest countries in Africa and Asia, which in the 21st century suffer from food shortages. For example, in such circumstances, Ukraine has a real opportunity to improve the development of the agricultural sector and increase the employment rate of the population introducing the achievements of the Third and Fourth industrial revolutions into the processing industry. According to the Government in 2018 the agricultural sector accounted for almost 17% of Ukraine's GDP, bringing about 38% of the state's foreign exchange earnings [4: 11]. Consequently,

the positive dynamics of agricultural sector in GDP plane opens the way for Ukraine to become a food exporting country to the periphery countries and provide the domestic market consumption. This is the reason for some experts speak about prospect of agrarian segment of Ukraine's development in case of advanced innovative technologies implementation. It must first of all happen in production of high-efficiency varieties of cereals, as from the midtwentieth century they started to grow actively in the countries of the semi periphery (India, Mexico) and periphery (Colombia, Pakistan) [5; 6]. However,

Ukraine has not still been able to accelerate the pace of agriculture technological upgrading, even to some extent using the achievements of the third digital revolution.

Within social life modernizing process in the countries of Central and Eastern Europe it should be taken into consideration that the orientation of the economy on the agricultural industry, even if it is high-tech, in the long run, threatens to end up in the poverty trap. Exports of agricultural products and raw materials at low prices are the production of low value-added goods; and in the future perspective that will only preserve the backwardness of such a country. This is caused by the fact that agrarian-oriented countries have to import high-tech expensive products (technology, communication technologies, software, etc.) with high added value. As a result, they have a negative external economic balance and, as a consequence, a decline in the domestic consumption market and further impoverishment of the population. Well - known Spanish sociologist M. Castells once pointed to these circumstances of the developing countries modernization. He suggested that the latest technologies, production systems and the latest organization of world trade would lead to the elimination of the traditional agriculture, which employs about two-thirds of the world's population. In this regard, we will face the massive «exit» of rural workers from agrarian regions and their co-optation into the shadow economy of overpopulated metropolises which already are on the brink of environmental disaster [7]. In other words, as a result of industrialization, there is a regular increase in migration sentiment of a large part of society, social life marginalization, and the increase of environmental threats, especially in urbanized industrialized regions. However, exacerbation of environmental problems in the countries of periphery of the world - system can be caused not only by spontaneous social activity such as migration processes, but also by the rapid introduction of the latest technologies into the manufacturing and light industries.

It should be noted that even before the beginning of the Fourth industrial revolution, the countries of the center of the world system began to transfer harmful production to the periphery countries. Thus, in recent years, several dozen fur factories have been transferred from the EU to the territory of Ukraine. In addition to serious reputational damage, these industries cause damage to the state through pollution of its land and water resources. According to unofficial data, there are already thirty seven fur factories operating in Ukraine. Instead, fur farms are completely banned in the UK and Austria. Since 2019 Serbia has banned the breeding and killing of animals for fur production. Denmark, Belgium and Estonia are on the way to complete abandoning fur farms [8]. In general, in Spain, Germany and Sweden, most of these enterprises have already closed.

To our mind, in this situation the strategy of transforming already existing livestock enterprises and poultry farms into eco-farms would be the most promising for Ukraine. As to the field of fur production a strategy for adapting Ukrainian environmental legislation to the legal norms of the countries of the world system center is expedient for Ukraine [9: 84-89]. In general, the development of the agricultural sector and processing industry in Ukraine can be a promising factor of economic growth not only through the effective implementation of Industry 4.0, but also through the implementation of a transparent and effective national environmental policy.

In the context of the Fourth Industrial Revolution requirements in the countries of the world-system center the amount of money spent on the development of renewable energy sources (wind, sun, water, geothermal energy) is increasing every year, the newest technologies of industrial and housing construction which focus on energy saving are being developed [10]. For comparison, in Ukraine 50% of electricity is generated by nuclear power plants that cannot provide energy demand for electricity of the whole country during winter loads and during the heat of summer.

When almost all TPPs in the world have switched to gas consumption, most of Ukraine's thermal power plants still use anthracite coal. The supplier of this type of coal was the Donbass mines, which have been in occupied territory since 2014. In this regard, Ukraine has to import coal from abroad. However, not only high cost of imported coal requires overcoming Ukraine's energy dependence on non-renewable hydrocarbons, but also a significant number of mines, their environmental hazards and technological backwardness do. These problems are only exacerbated by the coal industry monopolization by oligarchic clans, interested, first and foremost, in personal enrichment rather than the introduction of the latest production technologies.

Similar trends can be observed in the metallurgical industry, which accounts for a significant share of Ukraine's exports. Back in 2014, well-known Ukrainian economist Bohdan Danylyshyn while exploring the probable impact of the Third Industrial Revolution on Ukraine stated: «If Ukraine does not want to remain a raw material appendage of the world, we must radically change the situation in the metallurgical sector. In the future, global industry and infrastructure will not need as much metal. Modern metallurgical industries will cope with the global demand for it. And backward inefficient enterprises will die» [11]. The validity of this position is fully confirmed by the situation with the export of Ukrainian metal products over the past two years. In particular, with the aim of introducing temporary protective measures the European Commission has restricted exports to the EU countries of 11 types of Ukrainian metal products, and 17 types of metal products have been investigated in 2018 [12]. Among the products of Ukrainian enterprises, which were restricted, are: stainless steel fittings, cold-rolled and hot - rolled sheets, stripes, bars, billets, etc. These types of metal products are manufactured on the basis of outdated technologies introduced after the Second Industrial Revolution. Instead, in the countries of the center, thanks to the latest technologies of Industry 4.0, there is an irreversible trend of moving from the use of heavy metal billets in favor of high-tech production of parts from the latest synthetic materials (biodegradable, bioFila, carbon fiber, conductive, magnetic, and metal) on 3D printers.

A key indicator of the ability of modern society to adapt to the demands of the Fourth Industrial Revolution is the level of competitiveness, innovation and productivity of its economic sphere. In the Global Competitiveness Index 2017-2018 Rankings, Ukraine ranked 81st out of 137 countries and other territories in terms of competitiveness, rising from 85th place in 2017 [13]. However, by April 2019, Ukraine had dropped to 83rd in the global competitiveness index ranking [14]. Based on the indicators taken into account in the process of calculating the Global Competitiveness Index, Ukraine belongs to the second group of countries in which economic growth depends on improving the efficiency of markets and the level of education. At the same time, Poland, which is ahead of Ukraine by 42 positions and takes 39th place, belongs to the 3rd group of developed countries, whose economic development depends on the level of innovation. It should be noted that our country has considerable potential in improving the level of innovation. This is particularly evidenced by the fact that in Ukraine the volume of export of IT industry, as estimated by the IT-Ukraine Association, grew from $ 3 billion up to $ 3.6 billion in 2017 [15]. The significant potential for the development of innovative production is evidenced by the fact that Ukraine remains one of the few space nations capable of producing high-tech missiles. In particular, for the first time in the history of independent Ukraine in August 2019, a successful fire test of a launch vehicle was carried out [16]. However, despite the presence of promising industries for the development of high-tech exports, today, Ukraine alone is not able to overcome the lag in scientific and technological development and quickly move on to the fourth industrial revolution.

This situation is a direct consequence of the structural social and economic crisis in Ukraine and the low well-being level of the majority of its population, which reduces the domestic consumption market and also creates obstacles to use of Industry 4.0 results. As a result of it there is significant increase in migration flow of intellectual elite and youth from Ukraine to the countries of the center and the semi periphery of the world-system; and that causes stagnation of the scientific field and general social and humanitarian degradation of Ukrainian society. Ukrainian enterprises that do not have the latest technologies, proved to be uncompetitive not only in the external but also in the internal market, which led to a regular increase in unemployment in Ukraine. Over the last five years, the unemployment rate in the country has increased from 7.7% (including Crimea, Sevastopol and part of Donbass) to 9.1% (excluding Crimea, Sevastopol, Donbass)

[17] and according to UN experts Ukraine is in the list of countries in which the number of migrants is from 2.5 to 5.0 million people

[18] Therefore, without significant foreign investment, aimed at increasing the competitiveness of Ukrainian enterprises, and, consequently, reducing the number of unemployed, it will not be possible to make the transition to Industry 4.0 in Ukraine.

At the same time, over the last five years, the share of professional, scientific and technical activities in the structure of valueof final products (GDP) produced in Ukraine, is still a small percentage (Table 1)

Table 1. Dynamics of the Structure of Gross Domestic Product of Ukraine by Segments of the Economy as a Percentage of GDP