Before considering the implications of 4IR, it’s worth looking back in time to the preceding three revolutions. For the purposes of this column, let’s agree to characterise the First Industrial Revolution (1IR) as a time when agrarian, rural industries urbanised and made quantum shifts from hand production to mechanisation. The Second Industrial Revolution (2IR) resulted from the development of technologies associated with electric power. More recently, the Third Industrial Revolution (3IR) heralded transitions of workplaces on the back of digital technology.
Humankind has lived through many revolutions beyond those industrial, but what stands out about 4IR is the velocity, uncertainty and impact of technological shifts that are in the early phases of presenting broad ramifications for the ways we live (not to mention work). The vexing thing about 4IR for established business is the speed at which it’s emerged post 3IR. Given that 3IR only really started affecting industry in the 1980s, the majority of companies (excluding the so-called platform economies such as Uber, Amazon and Alibaba) are still in early to middle phases of integrating digitisation with pre-digital formats and responding to the opportunities and threats that have resulted from the rapid adoption of the Internet and associated technologies across the globe.
I was recently invited to be part of a panel at a conference held by the Gauteng government that focused on the implications of 4IR on township economies. Those of you that scrutinised the recent Gauteng State of the Province Address and associated budget addresses of Premier David Makhura and MEC Barbara Creecy, respectively, will know that strengthening township economies is integral to the Gauteng strategy. MEC Creecy’s speech reminded us that despite the significant economic contribution of Gauteng (around 10% of Africa’s GDP depending on our fluctuating rand), one in three residents officially lives in conditions of poverty, and of the economically active population, a third are currently unemployed.
Global consulting firms are eagerly competing to offer thought leadership and advice to large companies about how to shift their embedded business models in order to remain competitive as 4IR becomes mainstream. But much of the wisdom (and for sceptics, the hype) is emanating from countries that completed their transition to 2IR in the early part of the last century. On balance, their citizens have the education and economic means to make the transition to knowledge workers that the embracement of technology and digitisation characterised by 3IR demands. The core question that we now face is “What does 4IR mean for countries with high unemployment and inequality where, although the rump of populations may increasingly access the digital world through mobile technology, they woefully lack the skills to create or occupy jobs in 3IR, let alone 4IR?”
That business and government cannot lag behind in the race for success in 4IR is not up for debate. The rise of global platform economies such as Uber and Amazon on the back of 3IR suggests that revolutionary spoils will go to early movers that can scale rapidly. But context matters. So does our definition of success. The implications of conceptualising how to survive and thrive in 4IR in economies that serve citizens who, in many cases, have not even benefitted from the electrification associated with 2IR need to be understood. The early use of 4IR to deliver goods and services to the disenfranchised shows promise, particularly in the health sciences and agricultural arenas. At the same time, the implications of job destruction may have sounded attractive when Keynes predicted the rise of a leisure society. But leisure as a choice is a very different thing compared to redundancy for breadwinners that support extended families. It’s not only government that is going to need to ponder on how 4IR meets township economies. The strategic shifts that business needs to make to remain competitive are going to challenge the core of what it means to truly value “our people”.