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“YOU’LL never guess what we’ve just got at work!” It was the early 1980s and my father had phoned the child who shared his love of science fiction with exciting news.
“It’s called a facsimile machine. You should see it! The office in London puts a spec document on it and it prints out an exact copy here in Cape Town in minutes!”
Already decades old, fax technology was becoming commonplace then, as prices dropped. It seems pretty Stone Age now, but it was part of a wave of innovation that laid the foundations of the Fourth Industrial Revolution (the rapid fusion or blurring of technologies across physical, digital and biological worlds) currently sweeping the planet.
In his recent speech to the United Nations, President Jacob Zuma said it is “imperative that Africa and the Least Developed Countries, which were left behind in previous industrialisation processes, must not be excluded from the 4th or New Industrial Revolution” (who is his current speechwriter? Pat on the back to that person).
Yes; Africa, along with other Least Developed nations, has been mined for the resources that financed and underpinned the First Industrial Revolution (steam power), the Second (electricity), and the Third (digital), but experienced little of the benefits. And they are, to mimic another president, yuge: we can only see a shadow of their potential, but it leaves one breathless.
But I dislike the either/or narrative around things like this (you can see it strongly in discussions about artificial intelligence, for example): you’re either a panting groupie or a surly curmudgeon, for or against. Why can’t you be both – aware of both opportunity and risk?
Klaus Schwab, executive director of the World Economic Forum, is one enthusiast with a parallel unease about potential downsides: “… the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labour.”
The most critical factor of production in the market-coming-into-being will be talent (nurtured by access to quality education and high-end technology), rather than capital, he suggests. “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.” The social curse of inequality will grow.
“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.
"Technology is therefore one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries: the demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. The result is a job market with a strong demand at the high and low ends, but a hollowing out of the middle.”
The hollowed-out middle
In South Africa, what would that mean? We already have a notably hollowed-out middle; we look rather like an hourglass, with the impoverished masses filling the fat bottom of the glass, and the few wealthy in the little bubble at the top. About 80% of us don’t earn enough to file a tax return – and there’s not enough demand at the low end to provide jobs for all (over 36% of us don’t have work already).
That’s untenable for the fiscus and society. Forget the trickle-down myth; both the World Economic Forum and the International Monetary Fund (Staff Discussion Note from 2015, Causes and Consequences of Income Inequality: A Global Perspective) have joined other mainstream thinkers in noting that ‘trickle-down’ may sound great in theory, but it doesn’t work in fact.
Will the Fourth Industrial Revolution crank the gap wider? If we – that is, civil society, business and government – simply let it happen, as we did with earlier revolutions, yes, it almost certainly will. The results have been some glorious achievements, alongside broadening ripples of damage to humans and the ecology on which we depend.
But those revolutions were less thoroughly foreshadowed. This time around, we know that a profound shift is under way; we can take informed guesses as to how it will pan out. Why can’t we, especially in Africa, use this foreknowledge to pay careful attention to the risks and find ways we can leapfrog them to harness the benefits with the least possible harm?
The Fourth Industrial Revolution is widely described as ‘disruptive’ – it disrupts traditional industries and in so doing, births something new. The old models of business are so obviously not going to serve us in the years ahead – contracts of employment and pay-packets and notice periods and bonuses and the like.
The tandem rise of the gig economy (great for some, but meaning precarious work for many) will also feed both inequality and insecurity, bad for all of us. These familiar habits of thought and being need to be disrupted as well.
It’s imperative that civil society, policymakers and even business explore other ideas – from the basic income grant to the barter economy (which Greece learnt about during its crisis period), to participatory income, to a wellbeing economy and many more.
Step out of the trap of tired binary thinking (capitalist vs socialist) and start thinking in a really big and different way. Our brave new world demands innovation in how we make a living, pay for goods and services and share the benefits wrought by the brave new technology.
- Mandi Smallhorne is a versatile journalist and editor. Views expressed are her own. Follow her on Twitter.
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