Picture: ISTOCK
Picture: ISTOCK

The shift to increased automation that characterises the fourth industrial revolution may well destroy the few low-skilled manufacturing jobs that remain in SA. On the other hand, it could be harnessed to plug the country’s skills gaps and raise its manufacturing productivity.

The World Bank estimates that between 1994 and 2014 SA’s manufacturing sector shed roughly 335,000 jobs. Most of these losses occurred after the global financial crisis.

This is concerning, since manufacturing uses the labour SA has in abundance — low skilled and semiskilled. Without a significant contribution from manufacturing, SA cannot mop up the vast pool of the unemployed.

Both blue-and white-collar jobs are at risk, but robots also offer opportunities to leapfrog the skills gap

The fourth industrial revolution, or Industry 4.0 or advanced manufacturing, are all terms used to describe the current era of rapid technological change in which people are engaging increasingly with machines, such as mobile devices. The upshot is that firms driven by new disruptive technologies, such as ride-hailing platforms Uber and Grab, are supplanting entire industries; and machines, robotics and artificial intelligence are displacing routine, repetitive jobs.

SA has only just begun to grapple with the significant threats and opportunities this represents. But it should be concerned that there are few signs globally that the introduction of robotics, big data analytics and other advanced technologies are creating substantial numbers of jobs to compensate for the losses they have caused.

In the US, manufacturing employment is now lower than in the late 1940s, and most economists don’t believe lost manufacturing jobs will be regained. By 2010 only 0.5% of the labour force had shifted into new industries that had not existed a decade earlier.

This has stoked fear and directed populist blame at robots, which are consequently seen as the enemy of ordinary working men and women. Making the forces of technology and globalisation work for and not against people has become one of the biggest global public policy challenges of our time.

Low-skill and low-wage jobs are most at risk, but this doesn’t apply only to assembly-line jobs in manufacturing. White-collar jobs, such as those of cashiers, telemarketers and counter and rental clerks, are equally at risk of computerisation, as algorithms for the analysis, mining and effective deployment of big data are rapidly entering domains reliant upon the storing or accessing of information.

This was the finding of the 2013 Oxford University study "The Future of Employment: How Susceptible are Jobs to Computerisation?" by researchers Carl Frey and Michael Osborne. They concluded that most management, business and finance occupations are safe for now, as are most jobs in education, health care, the arts and media.

This would seem to suggest that to stay ahead of technology’s advance, humans will have to acquire more creative, complex and layered skills, and shift towards jobs involving greater social intelligence.

But that is not the only way to respond, says Harry Teifel, founder of Disruptas, a company that develops solutions to deal with technology-driven disruption. He says instead of replacing people with machines and robots (robots aren’t cheap and nothing is as competitive as people when they work productively), SA should be using new technologies to augment workers’ skills.

A business that is leading by example is Aerosud, the Centurion-based aeronautical engineering and manufacturing company that supplies Airbus and Boeing. It makes use of robotic welding, where robots and people work side by side to achieve the highest quality, and higher volumes than can be achieved by humans working alone. Such a situation, in which robots and people work together, is called augmented reality.

Picture: ISTOCK
Picture: ISTOCK

The company is also experimenting with augmented and virtual reality in its artisan training programme, where it believes it can play a significant role in upskilling and multiskilling people, enabling them to work faster.

The idea that new technologies could allow workers to bypass many years of formal study has great appeal for a skills-scarce country such as SA.

Teifel’s view is that SA should focus on leapfrogging both its current output potential and its skills capacity. "We have too few high-level skills, and to compete we need to invest in technology to augment the skills set of our workforce and to plug skills gaps."

Take the government-sponsored national tooling initiative. It costs R1m to train one toolmaker to international standard. For SA to increase the capacity of its workforce to meet international requirements in the shortest time and at the lowest cost, Teifel suggests SA complement specialist skills training with a new combination: fundamental skills training topped up by machines.

"The trick will be to train people up to a certain level and then let the machine [which could be a digital teaching aid like an augmented-reality headset] assist them in performing specialised tasks and add easily understandable how-to guides, as well as specialists supporting activities remotely."

In SA there is too much focus on the possibility of workers being replaced with robots, so everybody freezes and does nothing
Johan Steyn

So while technological advance does mean job losses, it also presents an opportunity for those who have skills deficits to progress to doing quite sophisticated tasks without spending years in traditional training environments.

If SA is able to narrow its performance gap with international competitors while maintaining reasonable labour rates, it may be able to offer an interesting value proposition to manufacturing companies, says Teifel.

Says Saul Levin, the director of Trade & Industrial Policy Strategies, a not-for-profit economic research organisation: "Importantly, these changes will create opportunities for the youth, who are a lot more comfortable with technology, and it will give them opportunities to enter the workplace."

The challenge in SA is to use the augmentation offered by disruptive technology to grow the economy by offering better products and services, more cheaply and efficiently.

"Our biggest enemy isn’t machines," says Teifel, "it’s our inability to compete."

Aerosud MD Johan Steyn feels the SA manufacturing sector hasn’t widely recognised the opportunities for upskilling and even leapfrogging some steps, using technologies such as virtual and augmented reality in training as well as in day-to-day tasks. "There is too much focus on the possibility of workers being replaced with robots, so everybody freezes and does nothing. SA risks losing big growth opportunities that may be impossible to regain."

Steyn says the commercial aviation market will need 38,000 new commercial aircraft in the next 20 years. To be part of these global supply chains and avoid being overtaken by countries such as China and India, SA will need state-of-the-art technologies across the entire commercial aviation sector, not only in one or two pockets of excellence, as is the case at the moment.

In other words, it is imperative that SA keeps pace with technological advances in the rest of the world to ensure that it does not lose lucrative export niches and markets.

The department of trade & industry (DTI) has just appointed Ilse Karg as its acting chief director for Future Production Technologies & Industry 4.0. Karg says the department is participating in international research on the effect Industry 4.0 will have on existing value chains, as well as on the entire employment landscape.

Her job is to build capacity in the DTI in this regard and put related policies, strategies and programmes in place that will address the competitiveness issues of SA manufacturing companies, as well as the gap in technical skills required for advanced manufacturing.

"It is recognised by the department that the fourth industrial revolution will have further disruptive influences on both developed and middle-income countries, affecting not only how things are done in the economy, but the whole future of manufacturing," she says.

"Due to the potential significant threats and opportunities of Industry 4.0, the department will take the lead in co-ordinating an integrated government approach and partnering with industry in preparing SA for the fourth industrial revolution."

While it is encouraging that the DTI is taking the issue seriously, the department doesn’t have a great track record when it comes to preventing job losses in manufacturing.

It could do worse than take a leaf out of Singapore’s next five-year future economy plan. This concludes that, because it is impossible to predict in a period of such rapid technological change which industries will succeed, the country must embrace innovation and remain open to trade, talent and ideas while building the deep capabilities required by technological development.

It is also seen as imperative for workers to upgrade their skills constantly to stay relevant. The plan urges people to think of education as a life-long journey and to focus on acquiring transferable skills, because they are unlikely to stay in one career their entire lives.

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