The Fourth Industrial Revolution (4IR) is happening all around the world. And while the government believes South Africa is ready for this digital phenomenon, a closer look paints a different picture.
South Africa’s culture of innovation is being stymied by its lack of engineers, scientists and digital skills
While some government departments are ahead of others in preparing South Africa for 4IR, many have admitted that one of their chief concerns is that this is happening silos, they are not sharing information with each other, and there is a need for urgent collaboration.
President Cyril Ramaphosa tasked the Department of Telecommunications and Postal Services to start ensuring co-operation between the different departments. But the department has said this process has taken longer than initially expected to get off the ground.
In December 2018 he invited nominations for what will now be called The Presidential Commission on the Fourth Industrial Revolution. It was previously known as the Digital Industrial Revolution Commission.
Its job is to get ready South Africa ready 4IR and will be chaired twice a year by the president.
The Trade and Industry Department is expected to give an update to the World Economic Forum (WEF) in early 2019 on South Africa’s readiness for the 4IR. This comes a year after the forum released a report on 100 countries, including South Africa, on their readiness for the future of production.
The intention of the Readiness for the Future of Production Report 2018 is to catalyse multi-stakeholder dialogue that informs the development of modern industrial strategies. WEF says it is critical that leaders from both the public and private sectors work together to address key challenges, build on opportunities and define joint actions at national, regional and global levels.
The document serves as a stark reminder how far behind South Africa is ready for the future world of production, and the economic and social changes that will come with it, especially when compared to the other G20 countries. This is despite it having the biggest Growth Domestic Product in Africa.
The G20 countries displaying the lowest levels of readiness are Argentina, Brazil and South Africa, while those with the highest levels are Germany, Japan and the United States.
The WEF ranks countries based on two broad matrices: Structure of Production and Drivers of Production. It lists six main Drivers of Production and assesses readiness and potential based on each economy’s performance in these areas.
South African and 10 African countries chosen from across all the continent’s five geopolitical regions fall into the Nascent category – meaning they have a limited production base that exhibits a low level of readiness for the future through weak performance across the Drivers of Production component.
South Africa ranked 45/100 on its Structure of Production, and 49/100 on its Drivers of Production.
One reason for this is that according to WEF’s Global Competitiveness Index 4.0, the country ranks 85 out of 100 on adopting Information and Communication Technologies.
According to the document, South Africa’s manufacturing share of GDP has decreased since the early 1990s to approximately 12% today, while its services sector has expanded. Nevertheless, the country has the strongest Structure of Production in Africa.
Across the Drivers of Production component, the country’s performance is mixed. South Africa’s ability to innovate is one its greatest strengths due to a strong innovation culture, and entrepreneurial activity is supported by a sophisticated financial sector.
But human capital remains the most pressing challenge in preparing for 4IR because there is a shortage of engineers, scientists and digital skills.
“It will also be critical for South Africa to improve its institutional framework to effectively respond to change, offer a stable policy environment and direct innovation,” the report concludes.