South Africa needs to embrace the digital economy that will help train and empower citizens as country leaps into the fourth industrial revolution, argue David Mohale, Tembile Yako and Sanele Zondi
The outbreak and spread of the Covid-19 coronavirus globally has forced the somewhat delayed but necessary re-examination of society.
The current talk about the fourth industrial revolution and its implications on social organisation of society has not entirely succeeded in forcing technological innovations for accelerated inventions with the intention of improving economic performances of nation states and at global level, especially in Africa.
Notwithstanding its fatalities, Covid-19 has necessarily upended operations at individual, organisational and societal levels.
This has consequently forced companies to appreciate not only the efficiency, but also arguably the primacy of digitisation in this new spatial domain for humankind.
For this reason, we argue that data should be significantly subsidised precisely because the internet is the highway to the future.
Nothing in the past century has ravaged the world much more than the coronavirus epidemic has, with the exception of maybe World War 2.
There is near global consensus that the death toll during World War 2 was between 70 million and 80 million, which at the time accounted for about 3% to 4% of the world population.
The total number of civilians and military personnel who died directly from the war is estimated to be between 50 million and 60 million from more than 30 countries.
The remainder died from war-related diseases and famine.
Last year, the International Monetary Fund had projected global growth to be 3.4%, given the US-China trade war, the impact of Brexit on the world economy and the US presidential election. The outbreak of the coronavirus has further strained the global economic outlook.
As a direct result of the coronavirus pandemic, the global stock market shed about $6 trillion (R114 trillion) in value in the week from February 23 to 28.
The 10 largest corporations on the S&P 500 index lost a combined $1.4 trillion in that same week.
Governments of many countries initially imposed bans on non-essential travel in an effort to contain the spread of the virus. In some instances, airports were completely shut down.
The daily exponential increase of infections and deaths necessitated the imposition of lockdowns within countries, with South Africa’s shutdown kicking in on March 27. These lockdowns had an immediate impact on the operations of all businesses regardless of size.
Businesses that had already digitalised their operations are least affected, at least from a “normal” operations perspective, as employees would have already mastered the art of working remotely.
On the other hand, businesses which have relied heavily on the traditional model of office work are feeling the pinch.
For instance, schools and universities in South Africa are currently grappling with a forced transition to online learning.
Initially thought to be a panacea, stakeholders woke up to the realisation that digitisation has its complexities, including but not limited to, the cost of data, reliability of connectivity and the number of students who have devices.
The pandemic came amid an accelerated changing world of work, transitioning towards digitisation and this may hasten the rendering of certain jobs and industries obsolete.
For instance, the 2015 World Economic Forum Future of Jobs report predicted that complex problem-solving, social and systems skills would be far more in demand this year compared with physical abilities or content skills.
Given the unemployment crisis in South Africa, we urgently need measures that will help us to adapt to the new reality predicated by the pandemic.
The pandemic has thrown the entire world into an abyss of the red ocean.
We argue that the clarity of thought and the quality of decisions on which factors to eliminate and reduce on the one hand, and which factors to raise and create on the other hand, will strategically position South Africa to craft its reliable pathway to the desired blue ocean out of this crisis.
Although there has never been consensus since human civilisation on the best approach to economic development – and we argue there shall never be – different schools of thought seem to agree that the 21st-century economy is bit driven.
Put simply, this means that value-addition and value-creation come from new ways of arranging information. The ability to arrange information stems from access to information.
This is where our central occupation is: how do societies ensure that the majority of citizens have access to information they so need to enhance their quality of life?
Some authoritative voices on economic growth models such as Peter Evans, have suggested that states that wish to register remarkable growth rates in the 21st century need to invest in human capabilities.
This is because growth has become more reliant on intangible assets in the era of the digital economy.
To their credit, the authors of the National Development Plan (NDP) recognised the importance of human capabilities as critical enablers for development. Granted, the NDP does not list data as one of them.
We argue that like land, capital and energy, data is now a non-negotiable cause (resource) for development in the context of access to information.
Chapter 2 of the Constitution embraces the “rising floor” concept – that is to suggest that the state has a moral obligation to lift its citizens to a particular minimum level of survival.
By now we know that South Africa is battling with what the NDP describes as the triple challenges of poverty, unemployment and inequality.
Recent data available from Stats SA further show that South Africa is a youthful country, and that more than 40% of young people are neither in employment nor in training, effectively constituting more than 58% of young people’s unemployment by the end of first quarter of this year.
We argue that young people are generally technologically savvy. As an advantage, the resolution to our resilient high unemployment partly lies in investing in cheaper data for access to information since it (data) represents a factor of production in the digital economy. In this context, access to data is essentially a human right.
The General Household Survey released by Stats SA in 2018 found that only 59.3% of South Africans have access to the internet. Of this number, 53% use mobile connections, thus underlying the importance of affordable and accessible data.
Most troubling with the survey was the revelation that only 9.5% of the South Africans have internet in their homes, with only 1.6% of Limpopo residents having connections.
Only 2% of rural households were found to have internet connection, with the remainder being in metropolitan and urban areas.
The survey also found that many South Africans mostly use internet cafés, educational facilities and workplaces to get connected.
Following the inevitable losses of many jobs due to the pandemic, South Africa faces the risk of reinforcing existing inequalities and marginalisation of the vulnerable groups if no action is taken immediately to lower the cost of data.
Lack of internet access means reduced chances when it comes to the emerging opportunities for participation in the economy. Data serves as a capability for human beings to pursue their economic activities and realise self-actualisation.
It is well known and beyond doubt that digital technologies facilitate the creation, storage, analysis and sharing of data and information which can be distributed and accessed effortlessly from anywhere.
Access to data, smartphones and the internet has also led to a massive growth of locally grown entertainment content which circulates on popular social media chat platforms such as WhatsApp.
This, therefore, shows the excellent potential of the internet as a catalyst for cultural development and entertainment.
Expensive data and slow internet connection – higher transaction costs – lower the productivity in the South African economy and serve as high barriers to entry.
Lower transactional costs would spawn new business models which can propel our economy into a localised digital economy and emergence of services that are better suited for our unique socio-economic conditions than the simple adoption of global solutions.
There is a need for increased government-industry collaboration in developing telecommunications infrastructure, particularly in rural areas. Government needs to fast-track the release of the broadband spectrum while the private sector needs to come to the party as well.
There should be clear indicators and milestones to measure progress in this regard, not the usual rhetoric.
Subsidy arrangements need to be considered for data, especially for those in rural areas. While in urban areas there is limited access to free Wi-Fi, innovative ways need to be found to also roll this out in rural areas.
Alternatively, while government is still finding the best ways of lowering data costs, there could be “data grants” whereby young unemployed people are given monthly data allocations to use for commercial enterprises.
The “zero rating” of educational and government information sites seen during this pandemic and previously during the #FeesMustFall campaign should be sustained and even expanded to improve access to knowledge and information for the poor.
South Africa has to accelerate social and economic inclusion by rapidly rolling out information and communications technology infrastructure to all its citizens in order to fully exploit the digital economy.
Mohale has a PhD in public policy (Unisa), Yako has an MPhil in future studies (Stellenbosch University), and Zondi has an MBA (Wits University) and is a postgraduate candidate in global business (Oxford University, UK).
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