By Antony Mutunga
The convergence of information technology, the Internet and e-commerce may well become as transformative as the industrial revolution – Kofi Annan
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A century after the first industrial revolution from the 1760s, a second one happened in late 19th Century. The second industrial revolution took form and ushered in the age of mass production through the use of electric power. Not long after, humanity was at it again when, in the 1970s, the third industrial revolution began. It was characterized by the use of information technology and electronics to programme machines and networks to automate production. This caused the world to advance further and enter into a new era, the digital era.
Presently, the world is yet again going through another revolution that is building on the third – dubbed Industry 4.0. It involves the fusion of technology as it combines smart digital technologies with operations techniques and advanced production through analytics, artificial intelligence, cognitive technologies, and the Internet of things (IoT) in order to create digital enterprises that are autonomous and interconnected. In addition, it is able to communicate, analyse and use data to drive further intelligent action in the world.
Currently the revolution is evolving at an exponential rate as it disrupts every sector all over the world by transforming systems in terms of production, governance and management. Industry 4.0 is expected to create many competitive advantages thus increasing global competitiveness with those well prepared taking a giant leap ahead.
Despite the fast embracing of this fourth revolution, its adoption and impact of the industry 4.0 remains low in Africa. This can be attributed to the fact that Africa is yet to completely adopt and master technologies of the first and second industrial revolution. As a result of the industry advancing past mechanisation and mass production, which was labour intensive to more of capital and skills intensive, Africa now faces an imminent threat.
The world has evolved further; no longer does manufacturing depend on making many products using cheap labour rather thanks to digitalization; now it is about the use of new technologies and collaborative robots that will be able to communicate with each other and with human beings. The competitive advantage that Africa once had in terms of cheap labour workforce thanks to its growing population is no more as the other regions rearm their factories with the latest technologies.
According to the World Economic Forum (WEF), more than 60% of Africa’s population is under the age of 25, and the working-age population is set to increase by two-thirds, from 370 million adults in 2010 to over 600 million in 2030. As things are, Africa is facing the threat of increasing its current high unemployment rate as organisations shift towards automation; our youth may end up unemployed. The continent is also affected in terms of connectivity and accessibility which are necessary for the new digital era.
With Industry 4.0 spelling doom for the outsourcing of cheap labour from Africa, the region’s main competitive advantage, it brings about new opportunities as well that can see the region embrace the new trends. For instance, compared to developed markets, Africa has an advantage as it is not burdened by infrastructure legacy issues and it also faces little resistance when adopting new technology. In addition to the regions’ slow adoption of technology, this has given Africa a unique opportunity that allows it to leapfrog outdated technologies and jump ahead on the innovation cycle.
An example would be how Africa leapfrogged to the third industrial revolution without successfully adopting the first and the second. Mobile infrastructure has advanced making it possible for millions of people in the continent to connect and transact. According to 2017 Mobile Economy report by the GSM Association (GSMA) trade organisation, Sub-Saharan Africa currently has 420 million unique mobile subscribers, with a 43% penetration rate and by 2020 the number is expected to rise over half a billion, making Africa the fastest growing mobile market.
Africa has also leapfrogged the rest of the world in the energy sector. While most developed markets have focused on nuclear energy, Africa has moved past this and headed straight to renewable energy and be able to capitalize on it thus leading the way towards clean power.
As a result, Africa still has the opportunity to take advantage of Industry 4.0. However, in order to be able to tap into these possibilities there is a need for change in policies. For starters, the continent needs to take a page from China’s book. The continent’s largest economic partner was once in a similar situation as it used to depend on cheap labour to attract foreign investment but over time this changed as the country turned to technology which saw it also turn from the world’s factory to its biggest innovator.
In order to follow in China’s path, African governments will need to come up with policies such as massively investing in the education of the youth. With the population of the youth growing larger every year, there is a need to invest in ensuring that they have the right skills required to embrace the trends that come with the new revolution. In addition there is a need to train and equip the current labour force with the necessary skills.
According to WEF, human capital in Africa is under-utilised. In their Human Capital Index, which measures the extent to which countries and economies optimise their human capital through education and skills development and its deployment throughout the life-course, Sub-Saharan Africa, on average, currently only captures 55% of its full human capital potential, compared to the global average of 65%.
It is evident that the government needs to invest more in educating the masses in terms of new technologies so as to take advantage of the opportunities brought by industry 4.0. The government also needs to put up policies that encourage organisations to invest more in new technologies so as to be able to complete on the digital global economy.
In addition, African countries can attract global manufacturing companies with their large markets. With a growing population and a fast growing middle class, the African countries can use this as competitive advantage to attract advanced manufacturing companies to any sector.
Ensuring these policies are put up and administered is the key to unlocking the potential opportunities of Industry 4.0 for the African continent. (