Millions of jobs to be gained


As the world turns to advanced technology – accelerated by the coronavirus pandemic – South Africa needs to sort out its digital policy issues or risk being left outside a new world order.

The dramatic acceleration in digitisation triggered by Covid-19 lockdowns and social distancing will make millions of job losses across the world permanent, unless the global workforce rapidly acquires the skills needed to tackle new technologies.

Technology giant Microsoft has warned that the transition is essential to drive recovery from the worst global recession in at least eight decades, which may leave a quarter of a billion people unemployed this year. The pandemic has shone a “harsh light” on what was already a widening global skills gap, it says.

“Crises have a way of accelerating trends already in motion, and the Covid-19 pandemic has proven no exception. Our data shows that two years’ worth of digital transformation have been concentrated into the past two months,” it said on 30 June. The final weeks of March alone saw as much broadband traffic as could be expected in a full year, it added.

Technologies powered by artificial intelligence (AI) are ushering in an era of automation and disruption, which is now widely described as the fourth industrial revolution (4IR), incorporating cloud computing, robotics, advanced wireless technologies and the Internet of Things.

But even in developed countries, skills to address the transition are in short supply, partly because of a drop-off in corporate training investments over the past two decades.

In South Africa the problem is acute, given the lack of emphasis placed on technology in both public and private higher learning institutions.

Last year, the country was 49th out of 63 in the World Digital Competitiveness ranking, a benchmark introduced by the International Institute of Management Development. In a Global Skills Index compiled by software management company Consera, its overall data science proficiency is lagging well behind, with a ranking of 44 out of 60 countries.

This is alarming, given a domestic jobs bloodbath that economists fear could push SA’s official unemployment rate as high as 50%. There has been much talk by politicians of preparation for the 4IR, but a digital strategy has been slow to emerge and is likely to take even longer to implement, given the government’s poor track record of structural reform.

“It is now, more than ever, imperative for the SA government, private sector, non-governmental sector and citizens to work together to upskill people for a disruptive, digital future,” says Barry Vorster, lead for HR technology, transformation and culture at PwC.

“The old approach to a nation’s prosperity was to implement economic interventions in the hope that these stimulate job creation and growth. Today, our approach should be to equip people with the skills they need to innovate and thereby create jobs and prosperity, measured in both financial and human capital.”One of the big obstacles to the introduction of new technology in SA has been concern over the inevitable job losses as manual skills and occupations become obsolete and labour intensity declines. But the fallout of Covid-19 has made the transition impossible to postpone any further, and failure to do so will make more businesses uncompetitive, worsening unemployment and making future job creation even more difficult.

“Digitisation and technology are a double-edged sword for a country like SA,” says Dobek Pater, director

of business development at ICT consultancy Africa Analysis.

“We’re going to see greater automation in business on the one hand, which is going to lead to job losses. On the other hand, digitisation creates a lot of new job opportunities; both in the country and working globally from the country. But if you don’t have the technology and skills in place, they are just not accessible.”

Microsoft predicts that over the next five years, the global workforce can absorb 149m new technology-oriented jobs, in industries ranging from food production to healthcare and manufacturing.

There will be an explosion of work in software development, data analysis, machine learning, cloud and data roles, and cyber security.

SA has not been a complete outlier in digital transformation. John Purchase, CEO of Agbiz, says that farmers have been using satellites and drones to monitor crops and orchards for years, while precision farming is increasingly being used to drive efficiency and sustainability of production.

Many supply chains are becoming digitised as traceability becomes imperative for biosecurity, food safety, and consumer choices – SA’s wool industry is fully digitised and all lots traded are now traceable using blockchain technology, he says. The industry was invited by the EU last year to share the technology and concepts it has developed.

None of this has hampered job creation within the sector. In the past eight years, employment in both primary agriculture and agro-processing has increased by about 20% – despite severe droughts and prolonged uncertainty over land expropriation.

“Since we are a net exporter of nearly half of what we produce, we need digitalised and efficient value chains to stay ahead of the curve and remain globally competitive,” Purchase says.

Financial services and insurance companies are among those that have embraced new technology. But within the government, only the SouthAfrican Revenue Service (Sars) is digitised, with home affairs receiving some support through domestic banks.

Even with minimal skills, there are ways inwhich South Africans can join the digital economy, according to a report called South Africa in the Digital Age (SADA), which was compiled by Genesis Analytics and the Gordon Institute of Business Science and released in January.

It identified global business services (GBS), which already employs 250 000 South Africans, more than double those employed in the automotive sector. Of those, 50 000 already serviced offshore demand and the jobs were growing at 24% a year, it said.

With the right policy and business environment, another 100 000 GBS export jobs could be generated by the end of 2023 and half a million by 2030, the report said. An SA matric qualification was enough to qualify if backed by smart and effective training at scale.

Growth in digital platforms for consumer-facing industries was another promising avenue for job creation as so far they were catering for middle- and upper-income consumers, and could be developed for relevance to low- income consumers, which would in turn boost demand for low-skilled services, the report said.

It pointed out that affordable access to both mobile and fixed data was crucial – an issue which has festered for a decade as policy paralysis and mismanagement blocked the allocation of new spectrum for cheaper and broader connectivity.

In response to a government directive, the Independent Communications Authority of SA issued new spectrum temporarily – and for free – in April to meet a surge in demand for data generated by remote work during lockdown. Demand is unlikely to return to pre-Covid levels when SA’s lockdown is completely lifted, but withdrawing the spectrum would hurt business activity and, so far, there is no plan in place to resolve the dilemma.

Another broad question is whether layering advanced technologies over the existing structural inequality in SA will exacerbate existing social, economic and political inequalities, warned a draft paper released by the National Planning Commission in July. While preparing for “inevitable technological developments” was an important aspect of developing a forward-looking digital policy, the conflation of that policy with social and economic transformation was “problematic”, it said.

Read more
This article originally appeared in the 27 August edition of finweek. You can buy and download the magazine here or subscribe to our newsletter here. 
finweek, august

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