SA needs ad­vanced in­dus­trial re­la­tions, fast

With the rise of au­to­ma­tion, the relationship be­tween lo­cal com­pa­nies and work­ers needs an over­haul on a fun­da­men­tal level.

Finweek English Edition - - OPINION - Ed­i­to­rial@fin­week.co.za is CEO and co-founder of GetBiz, an e-pro­cure­ment and ten­der no­ti­fi­ca­tion ser­vice.

the world econ­omy is on the brink of the fourth in­dus­trial rev­o­lu­tion, but the key ac­tors in South Africa’s in­dus­trial re­la­tions are pay­ing lit­tle at­ten­tion to the dis­rup­tive tech­no­log­i­cal ad­vance­ments that are un­fold­ing. Our in­dus­trial re­la­tions are many decades be­hind and in des­per­ate need of a se­ri­ous over­haul to limit a potential jobs blood­bath that will em­anate from the fourth in­dus­trial rev­o­lu­tion, the hall­marks of which are rapid and un­prece­dented tech­no­log­i­cal ad­vance­ments that are see­ing ma­chines and soft­ware ap­pli­ca­tions re­plac­ing hu­mans in the pro­duc­tion and dis­tri­bu­tion of goods and ser­vices.

Not only jobs will evap­o­rate, but also com­pa­nies. Or­gan­ised busi­ness, labour, gov­ern­ment and civil so­ci­ety will have to rise above their dif­fer­ences and work to­gether if we are to re­spond ef­fec­tively to the threats and op­por­tu­ni­ties posed by the fourth in­dus­trial rev­o­lu­tion.

At this junc­ture busi­ness and labour do not see eye to eye and are dis­trust­ful of each other. Work­ers feel that their lead­ers have aban­doned them and are no longer rep­re­sent­ing their in­ter­ests – re­sult­ing in work­ers go­ing on wild­cat strikes that trade unions (and em­ploy­ers) are un­able to con­trol.

The Marikana strike in the plat­inum belt in 2012 is a case in point, where a stand­off over wages turned into a mas­sacre that claimed more than 40 lives in Au­gust 2012.

The prob­lem of frac­tured in­dus­trial re­la­tions is also com­pounded by the split in South Africa’s main labour fed­er­a­tion, Cosatu, which has led to a break­away fac­tion em­bark­ing on form­ing a new fed­er­a­tion com­pet­ing head-on with Cosatu for mem­bers.

The pro­posed new labour fed­er­a­tion, led by for­mer Cosatu gen­eral sec­re­tary Zwelinz­ima Vavi and Numsa gen­eral sec­re­tary Irvin Jim, will likely pose more chal­lenges for em­ploy­ers as it’s likely to be more mil­i­tant and will de­mand higher wages to lure work­ers away from Cosatu. This will likely lead to more re­trench­ments and a surge in un­em­ploy­ment.

The fourth in­dus­trial rev­o­lu­tion will only pile on more mis­ery by threat­en­ing jobs and keep­ing job­seek­ers out of the mar­ket, par­tic­u­larly low-skilled job­seek­ers.

Klaus Sch­wab, founder and ex­ec­u­tive chair­man of the World Eco­nomic Fo­rum, warned in an ar­ti­cle pub­lished in Jan­uary that the fourth in­dus­trial rev­o­lu­tion could in­crease “in­equal­ity” and “so­cial ten­sions” as ma­chines dis­place labour.

“This will give rise to a job mar­ket in­creas­ingly seg­re­gated into ‘lowskill/low-pay’ and ‘high-skill/high-pay’ seg­ments, which in turn will lead to an in­crease in so­cial ten­sions,” said Sch­wab. “In ad­di­tion to be­ing a key eco­nomic con­cern, in­equal­ity rep­re­sents the great­est so­ci­etal con­cern as­so­ci­ated with the fourth in­dus­trial rev­o­lu­tion.

“The largest ben­e­fi­cia­ries of in­no­va­tion tend to be the providers of in­tel­lec­tual and phys­i­cal cap­i­tal – the in­no­va­tors, share­hold­ers, and in­vestors – which ex­plains the ris­ing gap in wealth be­tween those de­pen­dent on cap­i­tal ver­sus labour,” wrote Sch­wab. He goes on to ar­gue that tech­nol­ogy is one of the main rea­sons in­comes have stag­nated, or even de­clined for the ma­jor­ity of the pop­u­la­tions in high-in­come coun­tries be­cause de­mand for highly skilled work­ers has in­creased while de­mand for work­ers with less ed­u­ca­tion and lower skills has re­ceded.

In SA, we are al­ready feel­ing the ef­fects of the fourth in­dus­trial rev­o­lu­tion. The vi­o­lent con­fronta­tion be­tween Uber driv­ers and tra­di­tional cab driv­ers in Jo­han­nes­burg re­cently is an in­di­ca­tion that tech­no­log­i­cal ad­vance­ments are threat­en­ing the sur­vival of old busi­ness models.

Ad­vanced au­to­ma­tion and ar­ti­fi­cial in­tel­li­gence are be­com­ing per­va­sive. Self-driv­ing cars and drones that de­liver medicine and goods to con­sumers are al­ready with us and will elim­i­nate some sup­pli­ers in the value chains of in­dus­tries. Of­ten no hu­man in­volve­ment is needed.

With a huge army of un­skilled and low-skilled labour, SA is vul­ner­a­ble to rapid au­to­ma­tion of pro­duc­tion and dis­tri­bu­tion pro­cesses.

A new form of ad­vanced, ma­ture in­dus­trial re­la­tions is needed fast. We need in­dus­trial re­la­tions that are based on so­cial cor­po­ratism in which the state acts as a fa­cil­i­ta­tor of class com­pro­mise or co-oper­a­tion be­tween busi­ness and labour.

So­cial cor­po­ratism ex­ists in Swe­den, Nor­way, Ice­land and Fin­land where a big wel­fare state ex­ists in an en­vi­ron­ment an­chored on a so­cial pact be­tween cap­i­tal­ists and work­ers, forc­ing nei­ther of the in­ter­est groups to act in a zero-sum game of sab­o­tag­ing their economies. These Nordic coun­tries have ef­fi­cient gov­ern­ments, high stan­dards of liv­ing and are con­sid­ered the most equal so­ci­eties in the world.

A less ex­ten­sive model of so­cial cor­po­ratism is found in Aus­tria and Ger­many, the so-called Rhine cap­i­tal­ism, where the bour­geoisie and the pro­le­tariat have such a cosy relationship that it has al­lowed Ger­many to be­come Europe’s wealth­i­est econ­omy and a lead­ing in­dus­trial ex­porter.

Ger­many’s in­dus­trial re­la­tions are so ma­ture that dur­ing the eco­nomic re­ces­sion be­tween 2008 and 2009, Ger­man in­dus­trial work­ers agreed to take wage cuts or re­duce work­ing hours to help their em­ploy­ers ride out the eco­nomic slump. As a re­sult, Ger­many’s man­u­fac­tur­ing sec­tor was saved while the world econ­omy wal­lowed in a re­ces­sion.

With a huge army of un­skilled and lowskilled labour, South Africa is vul­ner­a­ble to rapid au­to­ma­tion of pro­duc­tion and dis­tri­bu­tion pro­cesses.

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