Technology … feel it, it is here! So just get used to it
I was flabbergasted by the derision with which the call from the president to imagine a country where bullet trains pass through our cities was met after his state of the nation address. By contrast, there is broad consensus that by auctioning spectrum and reducing the cost of data, there would be a fillip to our economy. As a country, is our imagination bounded by our current morass?
In the 1800s, 90% of the US workforce was employed in farming. The advent of the Ford Model T allowed for mass employment on the factory floor; the proportion employed in farming dropped to 30% in the 1930s. Currently, only 2% of the US population work on farms and yet the level of productivity is such that the growing population can feed itself. And even in farming, technology is leading to disruptions, from machinery equipped with software that will find the best place to sow seeds to aerial imagery from drones helping farmers to identify tracts of land that have not been adequately irrigated. This is not science fiction but rather proof that even traditional sectors have been transformed by technology.
It is easy to plunge into a state of panic when it comes to the fourth industrial revolution. I was shocked to come face to face with the automated ordering system McDonald’s uses in its high-cost countries, at my local joint. Machines don’t need to repeat your order, they work 24/7 and don’t ask for a pay rise.
Netcare announced it is digitising its patients’ health records. Who can read a doctor’s note anyway? And what happens when a doctor is away? Already a Stanford study found that artificial intelligence (AI) software can review and diagnose skin cancer faster and more accurately than most doctors. Medicines in the US also now need an e-pedigree, which gives the complete history of a batch of drugs. Reimagine medicine!
Companies such as BHP Billiton have introduced driverless trucks controlled kilometres away from their Western Australian mines. With the EU introducing legislation about conflict minerals in 2021 and the US having enacted the Dodd-Frank Act, blockchain can be a useful tool to label and track raw materials all the way from the mine to the end product. This would benefit our mining industry and keep out minerals from nefarious sources.
Data gold mine
With 22-million smartphones in SA, we are producing a tremendous amount of personal data, which companies are exploiting using machine learning. Companies that can assist businesses to acquire, process and interpret this data have stumbled onto a gold mine. Think of Altron, led by former MTN executive Mteto Nyati. The company, focused previously on supplying generators and cables to Eskom, now has an internet of things division, which is growing at warp speed!
Retailers are now using their point-of-sale systems not simply to transact but to analyse customer behaviour. Again, think of Pick n Pay’s vastly successful Smart Shopper loyalty scheme as a huge influencing system to corral buyers back to their stores. And we also have Discovery, which plans to link medical data to driving behaviour and pretty soon to forecast your ability to service credit — something traditional banks have yet to master.
Digitally transformed businesses, such as Capitec, have reshaped their organisations around technology, being able to issue cards on the spot to a new client, while traditional banks would need a few days to renew a credit card to an existing clients. Even a start-up such as TymeBank acquired 400,000 customers without a single branch in a matter of months, putting further pressure on the big four banks to cut back on their costly branch footprint. How about the world of investments, you may ask? The AI funds are here, but I noticed that a well-known local AI fund underperformed its benchmark substantially since inception two years ago. Maybe machines are not so good at understanding human biases after all!
But disruption has an adjustment cost. Ask the taxi industry disrupted by Uber or the hospitality industry that has been faced with booking platforms that have put the power in the hands of the consumer. While rolling blackouts may sound like an old economy problem, three years ago the Ukrainian power grid was shut down after an e-mail attachment was used to introduce malware, which enabled hackers to take over servers.
Reimagining the future is a necessity, not a luxury. Over the coming months, our R1-trillion behemoth, Naspers, will be listing its internet assets in Amsterdam. Already it has cut the cord with a large chunk of its traditional media business and curtailed its ties to its pay-TV business. It is therefore essential that the super-computer, with over 1-billion mini processors, receives the right training in coding from the outset, from Grade R, as the minister of basic education announced recently. For those asking, that super-computer is the human brain!
• Rassou is co-manager of the SIM Top Choice & SIM General Equity Funds.