President Cyril Ramaphosa may have only mentioned the phrase Fourth Industrial Revolution (4IR) twice in his State of the Nation Address last week, but the tech revolution and its impact on the economy was the golden thread throughout his speech
The state will now focus on seven priorities. They include economic
transformation and job creation, education and skills, and consolidating the social wage through reliable and quality basic services.
It’s hardly surprising. The African National Congress has been punting 4IR as key to economic growth and job creation. And evidence from elsewhere in the world shows that if done correctly, the benefits of 4IR are enormous across society.
South Africa is not close to reaching its goals for 2030 contained in the National Development Plan. And as Ramaphosa correctly states, extraordinary measures and prioritisation are key to realising Vision 2030. The state will now focus on seven priorities. They include economic transformation and job creation, education and skills, and consolidating the social wage through reliable and quality basic services. He believes that if these goals are pursued, within the next 10 years, no South African will go hungry, the economy will grow at a much faster rate than the population, two million more young people will be employed, education will improve, and violent crime will be halved.
“We are going to substantially expand the agriculture and agro-processing sector by supporting key value chains and products, developing new markets and reducing our reliance on agricultural imports,” he says.
A 4IRSA food, agriculture and agro-processing workshop held in May agreed that this sector was key to economic growth and there was low hanging fruit, unlike some other industries.
One way the government is helping is by prioritising funding for emerging farmers. Once on their feet, the impact will be vast. Not only will rural populations benefit, but there will be a skills transfer that the country is in dire need of. It will also help black farmers enter the commercial space.
“We must be a country that can feed itself and that harnesses the latest advances in smart agriculture.”
Ramaphosa says the government wants the economy to grow at a rate far greater than the population. He admits this is no easy feat – SA Reserve Bank now projects that growth in 2019 to be lower than expected.
One reason is the continuous interruption of power supply from Eskom. While plans are afoot to bolster the utility, the president says: “We must increase the contribution of renewable and clean energy to our national energy mix and explore the potential of the hydrogen economy.”
This will be discussed at the Digital Economy Summit that his being hosted by 4IRSA in July. Economic sectors that have the greatest potential for growth will be prioritised. Master plans are being developed with business and labour in industries like clothing and textiles, gas, chemicals and plastics, renewables, and steel and metals fabrication sectors.
The mining industry will also play a role. Ramaphosa says a market needs to be developed for South African minerals through targeted beneficiation, reduced costs of inputs, and increased research and development. 4IR will be key in this area. Just one example is how new technology enables mining to happen at a much deeper level.
“We want a South Africa that doesn’t simply export its raw materials but has become a manufacturing hub for key components used in electronics, in automobiles, and in computers,” he says.
The president also believes the country can be at the forefront of green growth, low-carbon industrialisation, pioneering new technologies and “taking quantum leaps towards the economy of the future”. Digital hubs will be built and the township economy will get more support. Research is already indicating how digitisation in townships is pumping millions into the economy and creating jobs.
He says the government is urgently working on a set of reforms to improve the ease of doing business by consolidating and streamlining regulatory processes, automating permit and other applications, and reducing the cost of compliance. Ramaphosa says to be internationally competitive and attract investment, the high cost of doing business, and complicated and lengthy regulatory processes need to be addressed.
According to the World Bank and the World Economic Forum, governments which embrace the tech revolution have seen an increase in business because services are streamlined which helps decrease red tape.
TECH AND DATA
The president says the country will expand its high-tech industry by ensuring that the legal and regulatory framework promotes innovation, scaling up skills development for young people in new technologies, and reducing data costs. There has been an outcry over data costs across the board. By lowering costs, not only will more people be connected, but research has shown that in a number of African countries more business is happening over mobile phones.
“To provide impetus to this process, within the next month, the Minister of
Communications will issue the policy direction to Icasa (Independent
Communications Authority of SA) to commence the spectrum licensing process. This process will include measures to promote competition, transformation, inclusive growth of the sector and universal access.” says Ramaphosa.
A 5G spectrum is critical if South Africa wants to compete and add value to tech development such as Artificial Intelligence. 5G is expected to bring speeds five times as fast as the current 4G network.
By lowering data costs, there will also be greater opportunities for youngsters to have access to tools that will get them into the job market. The country’s youth unemployment rate is above 50%. Many cannot even apply for jobs because they do not have data to look for work or find agencies that can assist them in gaining skills. The state also plans on supporting tech-enabled platforms for self-employed youth in rural areas and townships.
“We are already working with the private sector to create pathways into work for young people through scaling up existing pathway management networks. These are networks that allow young people who opt-in increased visibility, network support, and opportunities to signal their availability for jobs and self-employment,” he says.
“These sectors include global business processing services, agricultural value chains, technical installation, repair and maintenance and new opportunities provided through the digital economy and the Fourth Industrial Revolution.”
One of the most important challenges facing the country is that youngsters are not being prepared for the jobs of the future. Subjects such as coding and data analytics are now being introduced at the primary school level. Ramaphosa ended his speech by asking when last South Africans had dreamt of building a megacity? This has not happened in 25 years.
“Has the time not arrived to build a new smart city founded on the technologies of the Fourth Industrial Revolution? I would like to invite South Africans to begin imaging this prospect.”
By: Amy Musagrave