One of the biggest challenges in South Africa's transition into the Fourth Industrial Revolution is organised labour's pleas to protect jobs, which cannot be done, Reserve Bank Governor Lesetja Kganyago has said.
Kganyago was on Friday speaking at a WEF panel discussion on the economic outlook for Africa. Over the past three days this week, business leaders and government officials converged in Cape Town to discuss economic issues. The forum is themed around inclusive growth in the Fourth Industrial Revolution.
Sharing his views on 4IR Kganyago said he sees "lots of light", especially in light of efficiencies which may be achieved through it.
However, conversations with organised labour as economies transition will be key. "Many of them are in denial, and they think you can fight this Fourth Industrial Revolution instead of asking how to embrace and engage with it differently."
Governments must think of the revolution as a major structural reform programme, he argued.
'There will be some losers'
"As a whole we will be winners, but there will be some losers. We need to consider how we will take care of the losers," he said. "The logic being advanced by organised labour is to protect jobs … You can't protect jobs. It is just the wrong approach. We can protect people and that is what we must focus on."
The governor said people will be protected by reskilling them so that they can transition to the jobs of the future.
"If our focus is to protect jobs, then we are going to fail. We can protect people and that is what we need in order to make the transition," he said.
Efficient payment systems
"I think what is understated is the impact that it would have on the efficiency with which governments can deliver public services," Kganyago said.
As an example of how digital changes have created more efficiencies, Kganyago shared more on a pilot project the Reserve Bank ran with block chain to process transactions.
The Reserve Bank introduced block chain into the country's payment systems space – which ordinarily clears "a couple of trillion rands a day", according to Kganyago. Block chain technology, however, allowed the same amount of payments to be cleared within 90 minutes, he said.
"Now think of the efficiency gains of that, and what it will actually mean. That was just the wholesale market. But if we roll out to the rest of country, think of how quickly people will be able to move money and the reduced risk in the payment space," he said in his closing remarks in the panel discussion.