Can Africa leapfrog into industry 4.0 and age of robots?

If African countries remain stagnant in the global and relentless pursuit of the newest technology, Africa may completely miss the technological train. This may potentially leave the continent at the lowest rung of the value chain ladder.

THE world over, there is a relentless race to adopt the latest technology. The truth of the matter is that if Africa does not foster the right environment for its people and businesses to faster embrace the new technologies, it may be left behind; and the technological chasm that needs to be bridged will only increase over time. Can Africa leapfrog into Industry 4.0 and the age of the robots?

While Africa is still grappling with and taking time to resolve many fundamental issues around its economic development, the world is moving at a faster and faster pace, especially where the digital economy is concerned.

No longer about simple mechanisation and mass production, manufacturing is now much more advanced, by being capital and skills intensive, rather than labour intensive. Industrialisation has barely taken root on the African continent and this nascent industry is already facing an imminent threat from the robots.

Industry 4.0 is about the next wave of industrialisation and advanced manufacturing that will encompass the latest cutting-edge and disruptive technologies.

Industry 4.0 is already starting in countries where there is a very strong manufacturing sector, like China, Germany, Japan, South Korea and the US. In the near future, the whole manufacturing sector will be completely disrupted and transformed. Manufacturing will no longer be about making products in bulk, using a large pool of cheap labour to do so.

Manufacturing will be about the deployment of collaborative robots (cobots) that will not only be able to self-programme, but capable of collaborating and interfacing easily with other cobots and human beings.

Moreover, Industry 4.0 will be much more complex and will require the integration of traditional production with the latest additive manufacturing technologies, as well as the use of disruptive technologies like virtual reality, the internet of things, cloud computing, big data analytics, forms of artificial intelligence, and more.

All these technologies integrated together will be the backbone of the smart factories of the future. While traditional manufacturing is mainly related to the use and deployment of a large pool of cheap labour on the factory floor, the future smart factories will be mainly capital intensive and use cutting-edge technology, requiring few, but highly skilled workers to operate them.

This means that Africa should not expect that modern manufacturing will create a massive number of jobs. Instead, the future of manufacturing will not only be for those African countries with highly skilled labour, it will also require them to develop the necessary competencies among their labour forces for it to take place. China and manufacturing in Africa In the 1980s, China experimented with the setting up of the first four foreign trade-oriented special economic zones (SEZs) in Shantou, Shenzhen, Guangdong and Xiamen.

This experiment proved to be so successful that China further opened its economy with the creation of another 14 SEZs. Eventually, China opened up more regions for development. With China’s large pool of cheap labour and the special treatment given to foreign investors in these SEZs, manufacturing developed and blossomed rapidly. As labour costs rose in the developed economies, more and more international companies invested in China and delocalised their operations to these SEZs.

However, the latest Industry 4.0 trends of automating and robotising the factory floor in China may eventually drastically impede this manufacturing delocalisation towards Asian and African countries.

China has also evolved over time and its leaders have constantly adapted their economic policies to the changing economic environment, so as to constantly attract more foreign investments and technical know-how in the manufacturing sector.

This eventually led China to become the world’s current manufacturing powerhouse. However, as labour costs in China started to rise, the manufacturing companies started to delocalise to Southeast Asian countries, like Vietnam, and other Asian countries, like Bangladesh.

Eventually, Africa has also become the destination for some of these delocalising Chinese companies. For instance, white goods manufacturers Haier and Hisense are manufacturing their electronic consumer goods in South Africa, while apparel and footwear manufacturer Huajian is investing heavily in Ethiopia.

Global trends in robotics and smart factories

According to the International Federation of Robotics, by 2019 more than a million new industrial robots will be installed worldwide and by then, there will be around 2.6m robots in operation.

In terms of robot density per 10,000 workers, South Korea is the world leader with 531 robots, while in Europe, Germany leads with 301 robots. While there are more European countries in the automation and robotics race, Asian countries, like China, will be the biggest market for industrial robots. Currently, China has about 49 robots per 10,000 workers, but its aim of reaching a robot density of 150 by 2020 will require more than 600 000 robots to be installed.

Hence, Africa cannot afford to ignore these trends, since they will have a great impact in terms of job creation within the continent in the future. Moreover, unlike in the past, where industrial robots were mainly meant for repetitive tasks, the new generations of industrial cobots will work seamlessly with humans. Furthermore, these cobots will be integrated with a range of disruptive digital innovations that will make the whole factory smarter.

With all these innovations, the productivity of workers will be greatly improved, but overall, the factory will require much fewer people to operate. As a result, manufacturing will no longer be about large-scale job creation for unskilled workers, which, for the sizeable pool of unskilled workers in Africa, will be detrimental to their future job prospects. Besides this, these trends will affect the overall economic potential of the emerging African countries.

China is embarking on and rapidly adopting the Industry 4.0 trends. It has been building capabilities by acquiring robotics and automation companies worldwide. In 2016, some of its biggest acquisitions were Kuka, Dematic, KrausMaffei, Paslin and Gimatic. The Chinese government is advocating the use of new technologies to mitigate the rising labour costs, as well as stem the flow of delocalisation of its manufacturing companies. As a result, many of its manufacturing companies are installing more and more robots on the factory floor, to boost productivity and manage operational costs. Therefore, there will no longer be a need for companies to delocalise to cheaper pools of workers in Asia and Africa.

For Africa, all these trends are a major threat to its industrialisation. Being the most industrialised country, South Africa has the most industrial robots, particularly in its automotive sector. However, Africa still remains at the lowest level of the manufacturing value chain.

The imminent threat is that the competitive advantages of Africa, with its large and inexpensive labour force, will be eroded and eventually vanish, as other countries with a strong manufacturing base retool their factories with the latest technologies.

Potential leapfrogging There are always possibilities for African countries to leapfrog technology and embrace the trends of Industry 4.0.