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The 4th Industrial Revolution in South Africa

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Wednesday, 22 January 2020
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The 4th Industrial Revolution in South Africa

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Are We Ready?

The question of whether South Africa is ready for the Fourth Industrial Revolution (4IR or Industry 4.0) is a hot topic. 4IR has been hailed as a transformative moment in an economy. Cyril Ramaphosa has asserted that the Fourth Industrial Revolution is the answer to South African economic woes and widening inequality gap. But what is the Fourth Industrial revolution, and more importantly is South Africa ready to embrace 4IR?

What exactly is the Fourth Industrial Revolution?

In order to understand what the fourth revolution is, it is useful firstly to understand the previous three. The First Industrial Revolution, in around 1780, harnessed the power of steam and water to mechanise production. The Second Revolution in circa 1870 utilised the development of electricity to transform the mechanisation process onto a mass scale. The Third Industrial Revolution from about 1969 harnessed the power of IT (information technology) and the internet to digitise services, production and distribution.

The Fourth Industrial Revolution is a grand plan for countries around the world that are digitally-ready to harness the power of Artificial Intelligence (AI) and robotics to propel their economies forward. Noteworthy is that 4IR does not involve any of the technologies in isolation. It is a fusion of digital devices, smart factories, human brain modifications, gene editing, intelligent robots, and autonomous vehicles (to name but a few).

The concept originates from 2011 from a high-tech strategy of the German government that sought to promote the digitisation of manufacturing. It was laterreinvented by Klaus Schwab of the World Economic Forum (WEF), as 4IR where technologies and biological advances were presented as having the potential to advance digitally-ready countries into a new era of, previously unheard of, economic prosperity.

How does South Africa fit into 4IR?

In July 2019 the first Fourth Industrial Revolution (4IR) Digital Economy Summit was held in South Africa. Here President Cyril Ramaphosa positioned Industry 4.0 as an opportunity for South Africa to harness R5-trillion in value over the next decade- approximately the size of SA’s current GDP. He was reported as saying that businesses can “unlock economic potential and create a Silicon Valley” in South Africa. To realise this, he has set up a 30-memebr commission to provide advice to government on how government strategies and policies could support this endeavour.

Ramaphosa’s enthusiasm has seen 4IR sung as the new anthem for the rescue from the economic crisis facing South Africa, the veritable hero that could jettison the country out of its economic gloom. However the questions remain: is Industry 4.0 all it’s cracked up to be, and moreover is South Africa ready to harness such technologies to the benefit of the population?

Is South Africa ready for Industry 4.0?

At the very same summit at which Ramaphosa sung the praises of Industry 4.0 in July 2019, keynote speaker, US-based geopolitical forecaster and strategist George Friedman, suggests that 4IR may not be the economic messiah for South Africa. His unpopular opinion is that South Africa would be better served by focussing on a low wage labour model and export it, following the model used by China in order to build the economy before moving to 4IR.

Instead of trying to skip the phases that developed economies such as the US, China and Japan underwent, SA needs to place far more emphasis on a low-wage export system, Friedman said. His belief is that so much of the South African population is impoverished and lacks access to technology, that it will not fully reap the benefits of 4IR- or indeed that it may greaten inequality in the population.

Many also argue that a look back at the previous three industry advances shows that they did not necessarily advance the prosperity of the working classes and poor, instead they were largely to the advantage of big capital- and that South Africa’s alienated poor run the risk of being no different.

In a survey run by Deloitte’s, 100 South African executives were polled- along with others around the globe- about their view on the promise of 4IR and their companies’ readiness to embrace it. Only 4% of SA executives polled- versus 14% globally- were confident about their business’s readiness to embrace Industry 4.0. A staggering 73% of SA executives felt that 4IR technology would replace human workers rather the complimenting them, as opposed to 47% globally. While 86% of global executives believed that they were doing well at preparing their workforce for Industry 4.0, only 63% of South African executives agreed.
Many worry that South Africa’s lack of infrastructure, skills base and low levels of digital literacy would hamper the ambitious plans held by Ramaphosa and his commission.

Global analysts warn of the allure of the 4IR cure-all. They suggest that through all of the hype of Industry 4.0 and the speed at which technology is being harnessed globally safeguards and proper infrastructural support seems to be lacking- particularly in developing and under-developed countries. As Karen Allen writes for the Guardian UK “the dash to digitise comes with potential pitfalls –vulnerabilities that make the continent particularly exposed to data manipulation and cyber-attacks, even before a fully automated revolution such as the internet of things and artificial intelligence become a daily reality.”  She cites the ransomware attack of City Power Johannesburg in July 2019 as just one example of the continent being under attack before it has even got on its feet with 4IR. Another she uses is that of the Cambridge Analytica Facebook scandal where it was revealed that 60,000 South African internet users information and security had been compromised, and where Kenya had been used as a testing ground for the company’s many dubious strategies.

4IR is not all bad and has certain tremendous economic advantages when used and supported correctly in an economy, helping to secure and exploit competitive advantage in the global marketplace. There is no doubt that harnessed correctly the Industry 4.0 wave could jettison parts of the South African economy forwards. The questions remain of whether this benefit would be felt by all South Africans or just an elite few, and also whether South Africa is- technologically speaking- trying to sprint before it can crawl.



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