BUSINESS DAY/ 8 NOVEMBER 9.41 / DEVLIN BROWN
Short term, SA has no choice but to do everything possible to prevent job losses and carve out new job paths
“The number of new jobs and people who will be employed is going to be phenomenal and unprecedented in the history of our country.”
In the context of the social, economic and political climate in SA, President Cyril Ramaphosa could not have uttered more emotive words after his much-publicised investment conference.
Unemployment is at eye-watering levels and the metaphorical elastic band between the rich and poor is being stretched so far one shudders at how devastating the fallout will be if it eventually snaps.
Companies at Ramaphosa’s investment conference have signalled a solid belief in SA’s ability to veer off its collision course with the iceberg we all saw coming half a decade ago, and become prosperous. This is vital for SA and should be applauded.
However, South Africans are the world champions at ignoring warning signs. Despite our immense achievements we tend to only wake up when media hype followed by political hysteria snaps us into reality. We were forewarned about the load- shedding crisis a decade ago. The mess being exposed at the state capture commission was foretold. At our current activity levels, what are the odds of the looming water crisis becoming a reality?
A jobs catastrophe is on the horizon unless the country puts into meaningful action the airy-fairy discussions about Industry 4.0. The instinct is to brush it aside and say technology is not at a threatening level yet. Of course, just like the lights were on in 1999.
SA is part of a hyper-competitive global marketplace, and so it has no choice but to keep up with the rest of the world in incorporating technology into business processes. All companies know this and most are doing it, including those that pledged at the conference.
Innovation in cloud computing, automation, the internet of things (IoT) and fintech, among much more, is happening at lightning speed. Internationally and locally there are examples in mining, agriculture, logistics, manufacturing and others that make massive improvements to competitiveness.
Proponents of the positive effects of the unprecedented J-curve in the world’s current technological explosion admit there will be a short-term displacement of jobs. This is as companies, many of which are operating on exceptionally tight margins, are forced to lower costs and increase efficiency to remain competitive. This is not unlike the advent of organised agriculture or the industrial revolution. There are short-term job losses, followed by a realignment of the economy. A 100 years ago a third of Americans worked in agriculture, today the figure is 2%.
Today and tomorrow’s advancements in automation mean changes in entire value chains, cutting out inefficiencies, human fatality and error, and costs. The cold reality is that most businesses have a conscience but they also have an instinct to survive.
The theory goes that as companies become efficient and competitive, and then profitable and start to grow, they inevitably hire more people to facilitate this expansion, most likely in roles working alongside technology. These jobs will require people with a strong Stem-based (science, technology, engineering and manufacturing) educational background.
SA has a Gini coefficient that consistently places it as the most, or one of the most, unequal societies in the world. One of the possible effects of a rapid uptake in technology and automation will be an increase in this income gap: unskilled and semiskilled workers could be displaced, and new jobs that require Stem skills should replace them.
How do the poorest enrol in studies to learn new skills? This is precisely why on-the-job upskilling and training is so vital now. SA has a very large unskilled workforce, and just behind them are almost 40% of the population with no jobs. Automation presents a short-term and long-term problem.
Short term, the country has no choice but to do everything possible to prevent job losses and try carve out new job paths.
The long-term problem is fixing our dysfunctional educational system and developing workers with skills of the future. Business has to play its part with internships and meaningful investment in the youth. Every effort must be made to retain skills in the country, and regulations adjusted to make it attractive for skilled foreigners to work in SA, with the proviso they pass on their skillset to locals. Policy certainty, devoid of populist distraction, is vital.
Most importantly, the country needs a coordinated series of conferences and workshops that bring together technology thought leaders, academics, industry leaders and education representatives that plot out a long-term plan for how to prepare the country for new jobs. Of course there will be jobs in 20 years we haven’t even imagined yet, but we are not in a position to simply wait and see, and be surprised.
Automation is inevitable to stay relevant and competitive in the global economy, and if a short-term effect is an increase in the gap between the rich and the poor, how does that play out socially and politically in SA? It provides fertile ground for dangerous populism.
The alternative is building on Ramaphosa’s investment drive and starting to plan for the new economy now. Imagine load-shedding didn’t happen. Imagine there was no state capture. Imagine SA in 20 years with vastly reduced inequality because of a workforce that has been equipped for the realigned economy.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER