Budget 2023
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Tito and the fourth industrial revolution

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In January, Finance Minister Tito Mboweni said SA would need to gear up for the Fourth Industrial Revolution and that this would inform some of the decisions taken in the Budget. True to his word, while tabling his Budget speech, he stressed the need to invest in tech and digital skills, as well as revamping historically disadvantaged schools.

Government will also be rolling out a maths, science and technology grant. 

But what exactly is SA upskilling for? If you're still confused about what exactly 4IR is, Fin24 has you covered.

What is the fourth industrial revolution?

Very simply, it's the fourth major industrial era since the initial Industrial Revolution of the 18th century.

It's defined by blurring lines between the physical and digital worlds, says Devon McGinnis of Salesforce - "a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies. It’s the collective force behind many products and services fast becoming indispensable to modern life."

If your response to all that was "eh?", don't panic yet. McGinnis explains further:

"Think GPS systems that suggest the fastest route to a destination, voice-activated virtual assistants such as Apple’s Siri, personalised Netflix recommendations, and Facebook’s ability to recognise your face and tag you in a friend’s photo."

So it's basically machines taking over some of the work we can already do, and some of the work we can't? How's this different to the previous Industrial Revolution?

Digital technology expert Simon Carpenter - formerly chief technology advisor for SAP Africa - believes that while the previous industrial revolution gave rise to certain imbalances, injustices and inequalities, 4IR will give humanity the opportunity to correct some of these, as well as giving Africa an important chance to build globally competitive economies.

But there's a second important difference, he says.

"Whereas the plough, steam-engine and production technologies of yesteryear augmented our physical capabilities, this new Digital Revolution – with its data generation, information processing and communication technologies – is about augmenting our mental capabilities."

Should we panic about job losses?

PwC estimates that up to four out of every 10 jobs in the US are at risk of automation, and it's been said that students are being prepared for jobs that will no longer exist.

But Carpenter believes a bigger cause for concern is those who are not being prepared for the job market at all - and this is the most urgent area to address.

"With an estimated 122 million people expected to enter the African job market by 2020, and the continuing shortage of STEM*-related skills among the continent’s youth, there is reason for concern in both the public and private sectors."

He also notes some jobs are at greater risk than others of automation. Call centre staff, insurance underwriters, tax advisors, accountants and legal secretaries are 98-99% likely to be computerised, according to Oxford University.

"The world of work now faces unprecedented disruption," says Carpenter.

* STEM stands for Science, Technology, Engineering and Mathematics

What are the risks locally?

According to the World Economic Forum, 41% of all work activities in SA are susceptible to automation, compared to 44% in Ethiopia, 46% in Nigeria and 52% in Nigeria.

The WEF also expects job creation alongside, but there will be a change in "quality, location, format and permanency" of these jobs.

Presently fewer than 1% of African children leave school with basic coding knowledge, Carpenter says, warning that the continent's youthful workforce – the largest in the world – must therefore be equipped with 21st century skills to participate in the digital economy. It is this need that government is hoping to address by providing funding for maths, science and technology education.

4IR glossary


What do a) governments b) educational institutions and c) businesses need to do to prepare the workforce for this change?

"Unless we drastically accelerate STEM skills development, Africa will be left trailing in the dust of global progress for decades," says Carpenter.

"New skills such as computational biology, data science, and algorithmic programming will replace huge numbers of middle-class occupations. Without a solid grounding in science, technology, maths and engineering, young workers will not have the skills needed to survive – and thrive – in tomorrow’s economy."

Carpenter believes educational reform is urgently needed, but may take years or decades. Therefore, the responsibility falls on all stakeholders to enable skills development in STEM fields in order to take advantage of the opportunities presented, he argues.

So it's all doom and gloom then?

No, says Carpenter. " While technology poses risks, its potential benefits are immense.

"The same machine learning technology that is making many jobs irrelevant could be deployed to understand how children learn at an individual level, allowing educators to tailor the classroom experience and curriculum to maximise each unique child's talents," he says. 

He believes technology should be channelled to build skills and accelerate educational reforms. Teachers can use gamification, video content, augmented and virtual reality, and social media to transform learning and teaching.

Corporates can also help, he adds. Initiatives such as SAP Skills for Africa and Africa Code Week - which trained 2.3 million youth across 37 African countries in 2018 - are a "good blueprint", he says.

What can ordinary people do to best prepare themselves for this change, especially in a competitive job market?

Constantly brush up on skills, says Carpenter. "In the 1950s, the half-life of what you learned at university was as much as 30 years. Today, it's closer to 5. If you want to work for what we now consider to be a normal working life of 40 years, you need to keep learning or face irrelevance."

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