Reflections gathered at WEF-Africa 2017 indaba
THE ANNUAL World Economic Forum, Africa 2017 (WEF-Africa 2017) was held in May at the Inkosi Albert Luthuli International Convention Centre, Durban. By all accounts, WEF-Africa 2017 was a resounding and runaway success and we should pause and thank everyone involved: the government, business, labour, academia – “Team South Africa”, for putting on their best display of what “unity in action” truly means.
It reminded me, in a peculiar way, of the World Cup in 2010. Together, we can do so much more, as a country.
We sought to market South Africa, the sub region – SADC and the rest of the continent, in a clear, unambiguous and coherent language as investment destinations that are ideally placed, bristling with opportunities and indeed, that we are all open for business.
I dare suggest that it is this “unity of purpose” that we, as South Africans, must again captivate. We require this unrelenting spirit, unyielding commitment and undying passion for our country as we seek solutions to ensure that we achieve inclusive economic growth that will again lead to the creation of much needed job opportunities, eradicating rampant inequality and smashing low poverty levels. We have triumphed against all odds before. This moment of declining growth, ratings downgrades and struggling gross domestic product growth calls for us to do it all again. And so we must!
Important issues The WEF-Africa 2017 theme was “Achieving Inclusive Growth through Responsive and Responsible Leadership”. The meeting discussed important issues relating to education, skills, employment, entrepreneurship, energy, infrastructure and development finance related matters. Also on the WEF-Africa 2017 agenda were continental infrastructural development, combating, adapting to and building resilience against climate change and science, technology and innovation with a specific focus on Africa.
But, make no mistake – a vast number of meetings happened away from the hub – the Inkosi Albert Luthuli International Convention Centre – in the various foyers, restaurants and centres of the surrounding hotels that accentuate the allure and splendour that is Durban, with its illustrious beachfront. It goes without saying that a particular favourite was the Hilton Hotel, right next to the WEF Africa venue.
My participation at WEF-Africa 2017 included participating in sessions covering:
Progress with the implementation of South Africa’s lodestar, the National Development Plan (NDP); The Partnership against Corruption Initiative (PACI) – a global World Economic Initiative; The World of Women, Youth and Work (WWYW) in relation to global challenges; The Presidential Infrastructure Championing Initiative (PICI); and The Fourth Industrial Revolution (FIR) – Opportunities, risks and challenges.
The NDP The reflections here revolved around reporting progress with the implementation of the NDP. The main priorities of the plan are: the reduction of income inequality (based on the Gini coefficient) from 0.69 to 0.60 points; the eradication of poverty (using a poverty line calculated at R419 per person, in 2009 prices), and significantly reducing unemployment. The plan outlines a number of measures over the short-, medium- and long-term to achieve these goals.
The NDP confirmed that South Africa was a youthful society. This can be a huge advantage for growth, but increased employment opportunities are needed to be provided to prevent it becoming a drawback. South Africa is also an urbanising society, with about 60 percent of the population living in urban areas.
To maximise this “demographic dividend”, the country requires better health care (we are still very vulnerable to infectious diseases, and those caused by poor nutrition), improved education, easier entry into the labour market, and greater ability for workers, or potential workers, to move to where jobs are on offer (labour mobility).
The NDP is divided into 15 chapters, each with very clear and specific recommendations. They include longer-term recommendations about reducing carbon emissions, formulating policy to manage climate change, and water as a resource. There are also specific recommendations about transport, overhauling the rural economy to boost agricultural jobs, and transforming current patterns of human settlements, specifically to locate poorer people closer to cities, to places of work, and employment opportunities.
The PACI In this session we agreed that corruption is a barrier to economic and social growth, not just in South Africa, but in much of Africa too. In many countries, robust legal frameworks for transparency including far-reaching laws, criminal, administrative and audit regimes, and mechanisms for prevention, investigation and sanction exist. Yet, implementation of laws are often slow and impunity remains rife.
Rebuilding trust and integrity in business and institutions to create economic value will result in more-accessible markets, improved security, lowered risks for investors and greater ease of doing business. The role of technology in transaction processes was identified as increasingly important. We noted that integrating technology in this cross-industry effort to find solutions is critical to success.
Building on the interest from the PACI business leaders and public figures in the Africa region identified how positive change can be fostered across regions and sectors to rebuild trust and address corruption.
The World of Education It was noted that only 3 million formal jobs are created annually in Africa, despite millions of young people and women entering the workforce each year, most of whom are underprepared.
The question was how government and business leaders can counter this trend and foster skills for future jobs. Some of the dimensions addressed were:
Advancing digital fluency and other key skills; training skilled and unskilled workers and incentivising public-private collaboration.
It was agreed that in order to meet the challenges and maximise the opportunities posed, it was crucial that women play an equal role in shaping Africa’s future.
The modernisation of education and training systems in Africa is a critical priority to ensure the continent’s rapidly growing youth population acquires the skills that will help them succeed in a constantly evolving labour market.
The PICI The African Union and the pan African stakeholders adopted the PICI and the North-South Corridor as a pilot for the Smart Corridor concept.
As a strategic lever, Smart Corridors have the potential to open new markets and stimulate economic growth through infrastructure development and industrialisation with new technology.
Conceptually, it is easy to appreciate – the challenge was to accelerate the respective infrastructure projects (road, rail, energy, ports and hydro) from the stage of packaging to implementation.
Adequacy of infrastructure networks helps to determine one country’s success and another’s failure in diversifying production, expanding trade, coping with population growth and reducing poverty.
Building quality infrastructure in Africa is not an option, it is critical if we wanted to see success along our journey to transform Africa at both the continental level but also at the regional and sub-regional level.
The FIR This session, without a shadow of a doubt, was the most disruptive, impactful and disturbing of all the WEF-Africa 2017 sessions. It followed hard on the heels on my similar experience in Davos, Switzerland, in January.
Let me start with the fact that en route to Davos, I re-read Klaus Schwab’s classic The Fourth Industrial Revolution. For some inexplicable and quite peculiar reason, this time around I was completely taken by the content, force and power of the book.
The spectacular peek into an impending gravitational shift of our collective future left me exasperated. It is a future that will most assuredly have profound impacts on all of humanity, including on us, here down on the Southern tip of Africa. It is a relatively short, but incisive read. But, something shifted in me after reading it one more time…
Suddenly, everything I touched and turned to read, since the WEF-Africa 2017 resonated with and amplified the core thrust of Schwab’s book – the Economist, the Financial Times, Foreign Affairs, Time, Fortune and Newsweek – all have articles and reports that underlined some of the profound changes that are lying in wait. The new buzzwords were “artificial intelligence” (AI), “the internet of things”, “Blockchain”, “big data”, “3D printing”, “robotics”… and many more.
It dawned on me, again, at WEF-Africa 2017, that the FIR will transform societies and empower individuals, companies and governments in ways that were unthinkable merely a short few years ago. And, if truth must be told, this “revolution” has already taken on a life of its own.
In the discussions, we touched on the meaning of agile governance and asked what norms, rules and standards should govern emerging technologies? Who gets to decide? Who has power and legitimacy?
And then, thinking closer to home, how can the opportunities associated with the FIR be channelled to tackle the challenges of poverty, inequality and unemployment? There are no easy answers, for sure. This is one idea that I will ask the National Planning Commission to explore and address.
Left out What I do know is this: we must ensure that in the developing world we, as Africa, are not left behind again. As has often been the case with every revolution before, the developing world is not just a late comer, it is often left behind and left out.
The Industrial Revolutions that came before was about, first, the introduction of mechanical production facilities with the help of water and steam power; the second was the introduction of division of labour and mass production with the help of electrical energy and the third was about the use of electronic and IT systems that further automate production.
In this the fourth, we are already in a new digital information era.
Technological innovations are already characterised by a fusion of technologies that blur the lines between the physical, digital, biological and neuro-technological spheres. Internet companies have become the global juggernauts, usurping market share in every geography they enter, without having any significant tangible assets on their balance sheets. And we need to act, and act very quickly.
Rapid development in artificial intelligence, the internet of things and big data will see the world move closer to a time in which there will not be many jobs or operational functions that cannot be automated. This presents a serious challenge for developing countries, where a significant amount of jobs still require manual labour.
Technology can be a major opportunity that we need to leverage, but it is also a huge threat. We still have jobs in South Africa and Africa that no longer exist in other parts of the world. It would appear that we are not ready for this revolution, because approximately 600 million people living on the continent still do not have access to electricity!
It is estimated that some 65 percent of children entering primary schools today will likely work in roles that do not yet exist. Thus, depending on the collective choices we make – as consumers, as communities, as business, government, labour and civil society leaders – these technological breakthroughs could give us the platform and power to shift a gear and move into a world that is even more prosperous.
Left behind, we could again end up in a world where our economic, political and social systems are more archaic, more unequal and more conflicted. The truth that jumped out at me was this: the rapid pace of technological innovation and adoption is creating a global society increasingly divided along an axis of access to technology.
Opportunities Internet access is the lifeblood of entrepreneurs and unleashing the related opportunities for growth, development and progress are all aspects that are inextricably intertwined. How deep is our awareness that we are again at risk of being left behind? We should not leave this to chance. The FIR is pivoted on the notion that people with expertise being in the right place at the right time, equipped with enough tools, knowledge and systems to know what they’re looking at.
One of the issues we all should be seriously concerned about is the dangerous rising level of inequality. In many developed countries, median incomes have stagnated or fallen and many people feel that life will be worse – not only for themselves, but also for their children too. This is unparalleled fear. Then too, there are millions of people around the world that lack not just economic opportunity but a sense of hope and meaning in their lives.
We need to take a new, refreshed and far-sighted systemic approach to avoid the popular backlash that already dominates most of the emerging political discussions and choices.
At WEF-Africa 2017 the penny dropped – we must know that these developments hold great promise, but they also raise legitimate questions. The global economy may have entered the era of the “new normal”, but we are facing too the “new and great unknown”.
Mapping the as yet uncharted territories of this “new and great unknown” will require governments and industry to work together to solve the problems of the day, the future and mount this apocalyptic “unknown”. We will simply have to address whatever new challenges the global economy will churn out.
Conclusion No, South Africa is not on the precipice of a “Fourth Industrial Revolution” which will fundamentally disrupt and transform the way we work – the future is here already… I felt it in Davos and again in Durban!
There will be some, of course, who will argue that governments, and in particular public officials, are becoming increasingly irrelevant in a digital world, and even more irrelevant in the complex environment of the Internet-enabled business models.
As policy makers we are required to intervene to tackle the widening inequality from the introduction of new technology as the richest stand to gain more than the poorer sections of society.
Stakeholders as yet are divisive how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive.
Leadership requires recognising that discontent is increasing in the segments of society that are not experiencing inclusive economic development and social progress. Life will only become more uncertain for us with the onset of the FIR.
We are now required to evidence a deeper commitment to inclusive development and equitable growth. It is about being responsive, and responsible… no more no less…
Thus we should also seek proactive ways to respond to the opportunities presented by the FIR. We should do so in a way that lends itself to our national priorities by providing more agile responses and obtain better outcomes to the triple challenges of poverty, underdevelopment and unemployment.
The profound changes brought about by the FIR will also require that we look at innovation very differently. We should invest in unravelling the solutions to some of our most pressing developmental challenges.
How hard we drive, support and unleash innovation will be crucial to whether we are able to capture the “fruits” and benefits of the FIR to effect the transformation of our economy, manufacturing processes and global supply chains, for the greater good.