Beware the app that does your job faster and better than you
EY expert says SA must prepare for tech impact on employment
IN an economically stagnant world, protectionist policies can act as a shield against external competition and the job losses it causes. But policymakers need to get to grips with a threat to employment here at home — technology.
Roderick Wolfenden, Africa advisory leader for global consulting firm EY, said that while clients engaged his company’s services to help them introduce technology to improve efficiency and minimise error, those same organisations — including governments — needed to consider its potential to decimate jobs before the problem became unmanageable.
“Low growth is being amplified by disruption, which is an overused but convenient word to describe some of the changes smashing into some industries — usually with technology at the core of those changes,” Wolfenden said.
He said few industries would be spared.
Technological disruption usually began at the least-skilled strata of the workforce, where highly repetitive, usually mindless and boring tasks could be handled better and faster by automation.
“It may be exciting if you’re looking to improve quality and drive down costs, but there is a massive issue around job displacement that will take place,” said Wolfenden.
“We have to consider the downstream consequences in an economy like South Africa’s, which is already at a 25% unemployment rate.”
He said the displacement of human workers by technology was already happening and having an impact on society.
“The [number of] people who can be upskilled or reskilled to be redeployed elsewhere in organisations is nowhere near the total number that stands to be displaced through the introduction of technology. And the pace of changes is accelerating.”
Wolfenden said South African companies — more so than their counterparts in Western Europe or BREAKTHROUGH: Emerging markets such as Kenya have applied new technologies such as M-Pesa to deal with their local challenges the US where it was easier for redundant employees to find work because they generally had better skills and unemployment was lower — were under tremendous pressure not to shed jobs.
For now, Wolfenden said, only “early adopter” businesses in South Africa had introduced technology on a significant scale.
But that would change. As more of their competitors around the world became more efficient and reduced their costs, the imperative for South African companies to save jobs would be increasingly challenged.
“We’ve seen organisations doing remarkably well in their ability to retain staff who might otherwise have found themselves out of jobs,” said Wolfenden.
“Some financial services players are piloting technology in their back offices and the business case is not solely driven by headcount reduction.
“They have identified workers who could be upskilled and have elected not to retrench but to simply not employ more people as they grow. You could argue that those jobs were saved, although recruiting for that function will come to an end.”
However, the scope to work alongside automation — referred to as “cobots” — might be limited, and Wolfenden said technology would rapidly start eating into even higherskilled jobs.
“Transaction-heavy environments with large numbers of clients and transactions that are repetitive and standard in nature will see automation first,” he said.
“Telecoms companies, large utilities, financial services companies — it is just a question of the extent of the impact.”
Even the accounting profession, said Wolfenden, did not entail the work it used to just five years ago, with enterprise application software such as that developed by German multinational SAP taking over many functions.
Some of the jobs that our peers are doing, or that students now at university hope to get, could disappear in the next 10 to 20 years. What then?
A social security net would be hugely important, said Wolfenden. Aside from providing a cushion for the newly unemployed, investment in social security should also help to equip the unemployed with skills in new technologies so that they were not permanently displaced.
While Wolfenden acknowledged that a lot of effort had already been put into helping and encouraging entrepreneurs, he said South Africa needed to do even more to create a conducive environment for people to start their own businesses, with the right tax incentives and programmes in place.
“I think the gap between developed markets and emerging markets will continue to narrow, but the gaps between those who have and those who do not will widen,” Wolfenden said.
“What emerging markets have done very well, like with M-Pesa from Kenya, is to find novel applications of new technology.
“While the core investment into major technological breakthroughs seems to still be coming out of developed markets, South African small businesses can and probably will find ways to apply it to become best-in-class and score big,” he said.
“It is as much an opportunity as it is a threat.”
We have to consider the consequences in an economy like South Africa’s
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