Can SA keep up with the fourth industrial revolution?

With manufacturing output
continuing to slump, will South
Africa be able to keep up with
the new challenges brought
about by what a leading global
business consultant calls the
fourth industrial revolution?
This was one of the key
questions raised at the World
Economic Forum (WEF) Africa
2016 conference last week –
particularly after the release
of SA’s dismal manufacturing
output statistics.
With a 2% dip in
manufacturing output recorded
for the month of March –
mainly due to lower production
in the basic iron and steel,
furniture, motor vehicle and
food sectors – economists are
saying this suggests sluggish
demand in a vital economic
growth sector and may strain
trade and industry minister Dr
Rob Davies’ industrialisation
ambitions.
Johan Aurik, managing
partner for global business
consultancy AT Kearney,
wrote in an opinion piece on
the WEF Africa 2016 website
last week that the future of
manufacturing worldwide was
uncertain.
“The fourth industrial
revolution is under way thanks
to emerging technologies
such as mobile connectivity,
artificial intelligence, 3-D
printing and next-generation
robotics, with supply chains
and factory floors facing
significant transformation,” he
said. Africa, also influenced
by these factors, had its own
challenges which made it that
much harder to cope with the
transformation, he added.
“The fourth industrial
revolution will feature new
forms of collaboration that
will drive new value chains
and business models that
could leave traditional
industrial patterns in the dust,”
commented Aurik.
He pointed to the United
Nations’ projections that
Africa’s population would
double to 2.5 billion by 2050,
and the fact that the middle
class was rising along with
an increase in consumption.
“Africa has no alternative but
to develop a strong value-added
manufacturing base,” said
Aurik.
The continent had a long way
to go towards that, he noted.
And while around 30% of
China’s gross domestic product
came from manufacturing,
most African countries’ GDP
from manufacturing was less
than half or even a third of that.
According to Statistics South
Africa, 12.5% of SA’s GDP is
from manufacturing. Aurik
pointed out that by comparison
Nigeria’s share currently stood
at 9%, Kenya at 12% and
Zambia at 8%.
He said Africa had “ample
opportunities” to grow its
manufacturing base. “Local
beneficiation of resources in
oil and gas is one example
and of course the growth in
population will provide a boost
for direct consumer industries
such as food and beverage,
home and personal care,
clothing and even automotive,”
said Aurik.
Davies said South Africa’s
eighth Industrial Policy
Action Plan – launched early
last week – took into account
many of the challenges and
concerns highlighted by
Aurik. In a live interview
broadcast from the WEF in
Kigali, Rwanda on Thursday,
Davies said that South Africa
was “trying to industrialise at
precisely a moment when the
global industrial processes
are undergoing vast and rapid
changes”.
He added that there had
been progress, particularly
around modern investment.
He believes SA is “quite
capable” of leading the new
industrial processes but
that the sector does need to
operate on a much bigger
scale. “We need to get more
involved in innovation,
including the development
of our own innovation
and for that we have to, as
government and private
sector, create opportunities
for innovation.”
CAPTION
3-D printing is one of the emerging technologies that will change
the face of industrialisation.