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The world is going through a tech-fuelled productivity boom – Will South Africa be left behind?

Humanity stands at the cusp of a new industrial revolution that will lead to huge growth in global productivity, and the transformation has already begun.

How is South Africa going to face technological trends towards automation, fuelled by advanced data analytics and machine learning? Stated differently: How is South Africa going to meet the challenge and opportunity of this “Fourth Industrial Revolution” (4IR)?

That was the question asked at a recent seminar hosted by Nokia and the Embassy of Finland in Pretoria, which was attended by a wide range of industries and government departments. Executives from South Africa’s energy, transportation, and telecommunications sectors were present, as well as representatives from metropolitan municipalities.

Muneer Zuhdi, Nokia Bell Labs consulting partner for the MEA Region, noted that productivity gains during the information age have not lived up to the hype that preceded the mass adoption of the personal computer.

However, this is set to change dramatically in the age of the automation of everything.

He cited data from The Rise and Fall of American Growth by Robert Gordon, which showed that US growth in productivity peaked in the 1950s, and appears to have plateaued in the digital age — what is sometimes referred to as the Third Industrial Revolution.

Growth in Total Factor Productivity - Gordon

Zuhdi joked that perhaps the flat growth is because all the productivity gains the Internet brought in the 2000s was consumed by social media and cat videos.

Citing a report by McKinsey & Company, Zuhdi said that the flat trend is about to be broken by a huge a surge, with growth of up to 11% in the global economy predicted as a result.

Productivity boom

Industry Share of GDP % of private workforce Share of private sector IT investment Annual productivity growth
Digital industries — Tech, content, finance & insurance, professional & technical services 30% 25% 70% 2.70%
Physical industries — Manufacturing, construction, mining, utilities, healthcare, hotels, restaurants, transportation, wholesale and retail trade 70% 75% 30% 0.70%

Kamal Ballout, the head of transportation, energy, and the public sector for the MEA region at Nokia said that the coming productivity boom had huge implications.

Data from “The Coming Productivity Boom” by Michael Mandel and Bret Swanson showed that physical industries contribute a higher percentage to the GDP and employs more people. However, physical industries also had a much lower annual growth rate than digital industries.

A huge growth in productivity in a country’s physical industries could therefore mean a significant boost to its GDP.

Ballout said that this transformation is already happening and listed several examples, including a mine in Chile and the adoption of decentralised power generation by Swissgrid.

In the case of the Chilean mine, Ballout said that they had fully automated their 400-tonne haul trucks. This had the effect of not only increasing efficiency, but also decreasing wear and tear on the trucks.

“It turns out that machines are much better drivers than humans,” said Ballout. After automating the haul trucks, the mine found that wear on the tyres decreased significantly. On average, the trucks’ tyres now lasted several more months before they needed replacing.

Concern over jobs

The automation of tasks that machines can do better than humans raised concerns that increased adoption of robotics and machine learning would job losses in South Africa.

During a panel discussion at the event, the issue was discussed at length with attendees who voiced their concerns and asked questions of the panellists.

The panel consisted of:

  • Shady Makhlouf, the head of Nokia’s public sector segment
  • Brahim Ghribi, the head of MEA government relations at Nokia
  • Mark Walker, associate vice president for Sub-Saharan Africa at the International Data Corporation
  • Noel Watermeyer, senior manager of pre-sales engineering at Altron Nexus

Responding to questions around government regulation, Watermeyer said that there is a great need for training and up-skilling initiatives from government.

Walker suggested that government should offer incentives, such as tax breaks, to get companies to provide staff with training.

When a company wishes to adopt technology which would automate away certain jobs, there would then be a clear path for affected staff to gain the skills they need so that they are not left in the lurch.

After the panel discussion, the head of market solutions and business development for Southern Africa at Nokia, Jan Liebenberg, also showed examples of technologies that create jobs for lower-skilled workers.

One example is a system that allows an assembly-line worker to perform their task without needing to know technical details, such as the amount of torque to be applied to individual screws.

The system comprises of an augmented reality headset and torque screwdriver, where the headset helps identify which screw the worker is targeting with their screwdriver.

The system then automatically sets the torque on the screwdriver for each individual screw as the worker assembles the device they are working on.

It closes the feedback loop by tracking any reported manufacturing defects, and helping supervisors trace where they might make adjustments to improve quality.

Now is the right time for South African public entities and the private sector to take action in areas such as policy, investment, education, and re-training to embrace the Fourth Industrial Revolution and not be left behind.

Photos from the event

Photos from Nokia’s seminar on “Business and mission critical networks in the Fourth Industrial Revolution era”, hosted by the Embassy of Finland in Pretoria, are embedded below.

This article was published in partnership with Nokia.

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The world is going through a tech-fuelled productivity boom – Will South Africa be left behind?