SA needs advanced industrial relations, fast | Fin24

SA needs advanced industrial relations, fast

Jun 06 2016 12:16
Andile Ntingi

The world economy is on the brink of the fourth industrial revolution, but the key actors in South Africa’s industrial relations are paying little attention to the disruptive technological advancements that are unfolding.

Our industrial relations are many decades behind and in desperate need of a serious overhaul to limit a potential jobs bloodbath that will emanate from the fourth industrial revolution, the hallmarks of which are rapid and unprecedented technological advancements that are seeing machines and software applications replacing humans in the production and distribution of goods and services.

Not only jobs will evaporate, but also companies. Organised business, labour, government and civil society will have to rise above their differences and work together if we are to respond effectively to the threats and opportunities posed by the fourth industrial revolution.

At this juncture business and labour do not see eye to eye and are distrustful of each other. Workers feel that their leaders have abandoned them and are no longer representing their interests – resulting in workers going on wildcat strikes that trade unions (and employers) are unable to control.

The Marikana strike in the platinum belt in 2012 is a case in point, where a standoff over wages turned into a massacre that claimed more than 40 lives in August 2012.

The problem of fractured industrial relations is also compounded by the split in South Africa’s main labour federation, Cosatu, which has led to a breakaway faction embarking on forming a new federation competing head-on with Cosatu for members.

The proposed new labour federation, led by former Cosatu general secretary Zwelinzima Vavi and Numsa general secretary Irvin Jim, will likely pose more challenges for employers as it’s likely to be more militant and will demand higher wages to lure workers away from Cosatu.

This will likely lead to more retrenchments and a surge in unemployment.

The fourth industrial revolution will only pile on more misery by threatening jobs and keeping jobseekers out of the market, particularly low-skilled jobseekers.

Klaus Schwab, founder and executive chairman of the World Economic Forum, warned in an article published in January that the fourth industrial revolution could increase “inequality” and “social tensions” as machines displace labour.

“This will give rise to a job market increasingly segregated into ‘low-skill/low-pay’ and ‘high-skill/high-pay’ segments, which in turn will lead to an increase in social tensions,” said Schwab.

“In addition to being a key economic concern, inequality represents the greatest societal concern associated with the fourth industrial revolution.

“The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital – the innovators, shareholders, and investors – which explains the rising gap in wealth between those dependent on capital versus labour,” wrote Schwab.

He goes on to argue that technology is one of the main reasons incomes have stagnated, or even declined for the majority of the populations in high-income countries because demand for highly skilled workers has increased while demand for workers with less education and lower skills has receded.

In SA, we are already feeling the effects of the fourth industrial revolution.

The violent confrontations between Uber drivers and traditional cab drivers in Johannesburg recently is an indication that technological advancements are threatening the survival of old business models.

Advanced automation and artificial intelligence are becoming pervasive.

Self-driving cars and drones that deliver medicine and goods to consumers are already with us and will eliminate some suppliers in the value chains of industries. Often no human involvement is needed.

With a huge army of unskilled and low-skilled labour, SA is vulnerable to rapid automation of production and distribution processes.

A new form of advanced, mature industrial relations is needed fast. We need industrial relations that are based on social corporatism in which the state acts as a facilitator of class compromise or co-operation between business and labour.

Social corporatism exists in Sweden, Norway, Iceland and Finland where a big welfare state exists in an environment anchored on a social pact between capitalists and workers, forcing neither of the interest groups to act in a zero-sum game of sabotaging their economies.

These Nordic countries have efficient governments, high standards of living and are considered the most equal societies in the world.

A less extensive model of social corporatism is found in Austria and Germany, the so-called Rhine capitalism, where the bourgeoisie and the proletariat have such a cosy relationship that it has allowed Germany to become Europe’s wealthiest economy and a leading industrial exporter.

Germany’s industrial relations are so mature that during the economic recession between 2008 and 2009, German industrial workers agreed to take wage cuts or reduce working hours to help their employers ride out the economic slump.

As a result, Germany’s manufacturing sector was saved while the world economy wallowed in a recession.

Andile Ntingi is CEO and co-founder of GetBiz, an e-procurement and tender notification service.

This article originally appeared in the 2 June 2016 edition of finweek. Buy and download the magazine here.

industrial  |  technology  |  business  |  jobs  |  labour