Don’t be daunted by the 4th industrial revolution

South Africa must seize the opportunity.

That Telkom CEO Sipho Maseko’s call for a sharper national focus on the fourth industrial revolution was well received by the state should come as no surprise. As Maseko observed in his open letter earlier in June, the contraction of the South African economy in the first quarter of 2018 “should jolt us into action”.

The state is desperate for solutions to SA’s twin problems of low growth and high unemployment and is more willing than ever to engage with business and labour to find joint solutions. Left ignored the fourth industrial revolution (4th IR) has the potential to erode SA’s competitiveness and eat into her fragile work-force.

So I like his idea of a summit that culminates with a sector-by-sector list of practical suggestions on what to do and how. To a man and woman South Africans are sick and tired of talking. They want action. From an outsider’s perspective there seems to be so many opportunities for easy wins. For instance government’s attempts to move from analogue to digital broadcasting have been woeful. The state has missed multiple deadlines and spent billions on the move. As a consequence, spectrum, which among other things is well
suited for delivering affordable mobile broadband in rural areas and enabling tech innovation, cannot be freed up.

Yet despite government, SA’s citizens are forging ahead in the IT space: Cape Town has many more active entrepreneurs than the average rich-world city and both Cape Town and Johannesburg are internationally recognised as fintech hubs, according to an article by Standard Bank CEO Sim Tshabalala .

Aside from concrete action steps, when such a summit comes, I’d like to suggest that the participants shelve any tendency towards protectionist thinking. Of course it is understandable that any discussion of the 4th IR creates fear. The fusion of technologies that is blurring the lines between the physical, digital, and biological spheres – and the speed at which change is happening – is daunting. According to
the World Economic Forum the speed of current breakthroughs has no historical precedent. Moreover, it is disrupting almost every industry in every country.

So yes some jobs will disappear (up to 66% in developing countries by some estimates), but others will grow and jobs that don’t even exist today will become commonplace.

This is why Maseko’s call to action must be heeded: South Africa should have at least a basic strategy to ensure that we benefit from the coming changes – and I mean everyone – not just the skilled elite. The transition requires careful handling with business, labour and government focused on the same goal: providing support and assistance to those already in the workplace and creating a generation of workers capable of critical thinking.

I’m not being deliberately naïve here. I recognise that transformation of one of the world’s worst education systems will take a generation or more to achieve. Which is, of course, no reason why change should not begin and no reason why we should not have a vision for the future.

I’m also aware that South Africa has done terrible harm to her mining and manufacturing industries, but again, this does not have to be a foretaste of the future. Instead we need to draw on strengths that we don’t always fully appreciate having. In the article mentioned above, Tshabalala points out that South Africa has a sophisticated financial system, solid infrastructure and (some) supportive polices for encouraging investment in a range of industries.

Innovation is the name of the game. He cites an interesting fact: While SA firms spend seven times less than American companies on R&D between 2009 and 2014 was about four times higher than in the United States, and eight times higher than in Taiwan. Thus by increasing R&D South African
manufacturers have an opportunity to maximse profits, he says.

Wim Naudé, the Dean of the Maastricht School of Management, also argued recently that the 4th IR offers opportunities for “new forms of manufacturing that would trigger a period of valuable growth”.

According to Naudé these new forms of manufacturing include “more competitive small-scale manufacturing through additive manufacturing, mass customisation, cheaper automation and cheaper input costs”.

It sounds right up South Africa’s street. What we need is to think differently and come to grips with the fact that the world is fundamentally changing. We cannot miss this opportunity.

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.



You must be signed in to comment.




The Budget Speech explained
Moneyweb’s 2020 national budget offering, including infographics and audio ratings, as well as past budget coverage....

The Investor Issue 48
Separating out the noise from useful information in the markets is not easy. The trick to staying the course is to keep an eye on ...

The Investor Issue 47
Some people intuitively understand that investing for future gain is a long-term process that cannot be rushed. The management of ...

The Investor Issue 46
While US innovation soars and its tech listings continue at a ferocious pace, SA has no real plan for how to embrace the 4th Indus...

The Investor Issue 45
As the investment world falls more and more in love with the simplicity that ETF investing offers, index providers are realising t...

The Investor Issue 44
Company financial statements are the last line of defence for investors wanting to protect their investments. But these cannot alw...

The Investor Issue 43
What makes one CEO great and another mediocre? The Moneyweb Investor ponders this and other leadership questions in the latest iss...

The Investor Issue 42
Stagnant economic growth and questionable economic policy is hampering the development of mid-sized - and investible - businesses ...

The Investor Issue 41
If you are one of those people who invests more energy into your credit card or medical aid rewards programme than you do your ret...

The Investor Issue 40
Volatility in global markets is higher than it has been in years, giving investors the jitters. Some 'experts' are suggesting a re...

The Investor Issue 39
From lessons from Buffet to building your own crypto-portfolio (a risky endeavour by anyone's standards), this issue of The Moneyw...

The Investor Issue 38
They say the art of investing is to ignore the short-term noise and focus on attaining long-term goals. That's true, but that does...

The Investor Issue 37
Getting the economy on the correct footing requires that everyone pulls their weight. Our writers this month have gone above and b...

The Investor Issue 36
The past year is littered with train wrecks like Steinhoff, SAA and Eskom. But there is real sense of ‘back to business’ in So...

The Investor Issue 35
Stock markets are soaring, but productivity is not. Innovation continues, but leads to fewer new jobs. And the great and the good ...

The Investor Issue 34
South Africans are fed up with corruption, or anything that has even a whiff thereof, as JSE rockstar Naspers is currently experie...

The Investor Issue 33
As the year races towards its close, investors will be forgiven for feeling a little breathless. The British WWII propaganda phras...

The Investor Issue 32
Anyone would think that getting an economy moving is rocket science. It's actually not. It requires single-minded commitment. Whil...

The Investor Issue 31
We examine the opportunities of forex trading, the best unit trusts, e-commerce at Richemont and more. ...

The Investor Issue 30
Despite what the astrologers say, there are no shortcuts when it comes to successful stock picking. Fundamental analysis counts. T...


Follow us:

Search Articles:
Click a Company: