Jun 25 2020
The word ‘industry’ was once synonymous with manufacturing, while the term ‘industrial revolution’ inferred significant technological innovation.
For a long time, the word ‘industry’ was synonymous with manufacturing, while the term ‘industrial revolution’ inferred the advent of a significant technological innovation.
However, the term ‘industry’ now applies to any economic activity that isn’t DIY (do-it-yourself) or otherwise not counted in a nation’s economic National Accounts, but is a DIFM (do-it-for-me) activity. In Australia, there are now 509 classes of such industries in the ANZSIC system as promulgated by our ABS.
In turn, this classification enables us to define a new revolution, or, more appropriately, a new age of progress. Basically, any revolution or age begins with a significant new round of outsourcing (DIY to DIFM) that leads to a raft of new industries, as outlined in the chart below.
So, when we hear the new Digital Era described as the 4th Industrial Revolution, it is nothing of the sort, as we will explain shortly. That concept misses the whole point of new ages and new revolutions.
The next two charts trace the evolution of the new ages over the past several centuries, and the resultant growth in our standard of living. In the first exhibit, the colour bands refer to the five sectors of the economy: primary, secondary, tertiary (commerce); quaternary (information and/or finance dominated); and quinary (personal and household services).
In turn, this leads back to the supporting utilities (ubiquitous technologies and systems), as summarised through each new age or ‘revolution’.
Perhaps surprisingly, the size of the current utility (ICT, Stage II Digital Era) is not big, as shown in the chart below. None are. At $153 billion, the current utility accounts for just 2.7% of the nation’s revenue. However, like all preceding utilities in previous ages of progress, it packs a wallop and is a vital catalyst and support to all of the nation’s 509 classes of industry and the nation’s 10 million households.
For a printable PDF of this release, click here.