New economy calls for different view of property and growth
The fourth industrial revolution, much like inequality, seems to be a phenomenon that we all agree “matters”. But when it comes to how we respond to and future-proof the skills, infrastructure and structural change required at firm level we may not be batting on the same wicket.
A major reason for this is that the exponential growth in the digitisation of almost everything challenges how we’ve approached matters of governance in both the public and the private sectors.
Deputy Communications Minister Pinky Kekana suggested that she would “persuade” her colleagues in the Cabinet to adopt programming as a subject in basic education, for instance.
It is nice to speak of coding as a learning area, but the reality of schools that can’t meet the basic and minimum standards in infrastructure should wake us all from our slumber. What we hope, target and aim for is as important as what we don’t. SA is late in migration from analogue to digital, which would free up spectrum and make these digital advances possible. We are none the wiser about how to resolve the debates over how spectrum should be allocated and regulated.
Moreover, a coherent digital approach also requires confronting one of the economic and political ideas central to global capitalism — exclusive ownership. The digital economy challenges the notion of private property as commonly understood. We are seeing the beginnings of an economy about “access” rather than exclusive ownership. The link between using something and having control or exclusive ownership over it has been severed. This foundational concept in the modern economy influences not only interpersonal and firm-level relations but also how we measure economic progress and societal aspirations.
We accept that a growth target of just above 5% is needed to broaden participation in the economy. What we are targeting, in effect, is a manufacturing biased measure in an economy consistently shedding manufacturing, mining and trade jobs. Growth and how we measure expansion in national output at best underestimates the role of the digital economy and at worst doesn’t include it at all. The digital economy is about sharing, disinter mediation and the capture of consumer rents in digital production. Intangible as they are, these rents and the economic value generated by the digital economy present a measurement challenge to a GDP concept based on exchange through trade and modelled more for the tangible movement of goods, rather than the intangible benefits of digital technology and services.
Similarly, some have suggested that in the absence of exclusive private control of key assets, the requisite investment will not follow. Nowhere is this clearer than in the debates on spectrum and the land issue. But licensing and ownership are not the same thing. For example, Sibanye-Stillwater may own the deadly shafts its workers work in, but not the ore it extracts. The ore is licensed to Sibanye and in return Sibanye must provide wages, taxes, investment and other positive economic spillovers, alongside the profits it pursues.
The notion of the government as a custodian over finite and scarce resources rather than express private ownership is nothing new — we do it already with mining and water rights.
THE REALITY OF SCHOOLS THAT CAN’T MEET THE BASIC AND MINIMUM STANDARDS IN INFRASTRUCTURE SHOULD WAKE US FROM OUR SLUMBER
With the land issue, it is not necessarily about the lack of title deeds and by extension the credit financing required to work the land (as some have vehemently suggested), but rather the configuration of market relationships from financing to warehousing, logistics and retail, among others. Title and exclusive ownership and access are not the sine qua non for greater production and inclusion of small-scale farmers in agri value chains.
Perhaps we have not thought creatively enough about how the land debate will require us to pursue different forms of tenure, and what this means for financiers, insurers and those who invest along the agricultural value chain. Viewed in this way, the digital economy and its underlying advances in blockchain, the internet of things and others, not only disrupt the way we do things but also the models of social organisation, ownership and control that we take for granted.