Building human capital for the fourth industrial revolution

China is on its way to becoming the first artificial intelligence (AI) superpower. This is according to Forbes magazine, which found that although more than 20 countries already have AI strategies in place, China is by far the most ambitious of the lot. South Africa’s strategy is expected to be finalised this year, and there are some crucial aspects that the country needs to catch up on.

Whereas China has already looked at the provision of legal frameworks, resources and goals, coupled with local freedom to adapt, South Africa has just begun the process of strategising. For us, the task is urgent, particularly when you consider that by 2025 China expects to have already implemented its strategy.

Why is this so important? The fourth industrial revolution (4IR), predicated mainly on AI, is an era in which  intelligent technologies permeate all aspects of our lives — be they in the economy, society or politics. It is envisioned to grow economies exponentially and could be the key to finding solutions to some of our most deep-seated problems.

Consider, for example, the McKinsey Global Institute Report on the effect of AI on the global economy, which found that there is the potential to incrementally add 16%, or about $13-trillion, by 2030 to current global economic output — an annual average contribution to productivity growth of about 1.2% — throughout the next decade. It is no wonder then that so many countries have prioritised creating AI strategies.

South Africa has made some headway, but we are still playing a fierce game of catch up. Last year, President Cyril Ramaphosa established the Presidential Commission on the Fourth Industrial Revolution, which he chairs, and of which I am the deputy chair. We were tasked with the responsibility of putting together a plan that will ensure that South Africa takes advantage of the opportunities presented by the digital industrial revolution.

Earlier this year, we drafted a preliminary report with some preliminary recommendations. The report was submitted to the department of communications as well as the presidency and was considered by the Cabinet.

The eight core recommendations of the commission are to:

* Invest in human capital;

* Establish an AI institute;

* Establish a platform for advanced manufacturing and new materials;

* Secure and avail data to enable innovation, as well as incentivise future industries, platforms and applications of 4IR technologies;

* Build 4IR infrastructure;

* Review and amend or create policy and legislation; and

* Establish a 4IR strategy implementation co-ordination council in the presidency.

In a series of eight articles, of which this is the first, I will unpack each recommendation.

The first of these is to invest in human capital. This is only logical when you consider South Africa’s rising unemployment rate, coupled with the brain drain of the past few years. The latest statistics show that unemployment is sitting at more than a decade-high and is inching towards the 30% mark.

This does not even encompass our discouraged workers, which puts the estimate closer to the 40% mark. Then, of course, there is the issue of emigration of highly skilled workers, which Statistics South Africa estimates to have been about 97 460 in the years 2006 to 2016 — a figure many have called a gross underrepresentation.

The solution is not only to foster growth to propel a stagnant economy, but also a coherent strategy from stakeholders in business, labour, government and civil society.

This will not be an easy task, when you consider that the focus needs to be on both lowering the unemployment rate and preparing the current workforce for changes of the 4IR.

South Africa is one of the countries that are most vulnerable to 4IR disruptions. Consider, for example, this 2018 figure from the World Bank, which shows that South Africa’s human capital index is just more than 0.4. This is the same as those of Benin and Malawi.

But South Africa has a larger gross domestic product per capita and is categorised as upper middle-income, whereas Benin and Malawi are in the low-income group. What this means is that although South Africa has many economic opportunities, the majority of its citizens are not equipped to take full advantage of them.

In the 4IR, there must be a mixture of skills stacked on top of each other — and aligned to industry. This should allow people to enter and leave the system at numerous points as part of a lifelong learning process. We need to invest in projects for mass skills development. This investment can be scaled for exponential skills pipeline development and market absorption. This could be particularly effective in the manufacturing, agricultural and tourism sectors, which provide direct opportunities for such programmes.

As a matter of national culture, all aspects of society must be prepared to reskill and to approach learning as a continuous process. Our education system at all levels must promote problem-solving skills, computational thinking, multidisciplinary skills and systems thinking, as well as mastering the social, economic and political worlds.

How do we go about this? First, the government needs to prioritise a redesign of the human capacity development ecosystem to link our entire pool of potential employees to productive and decent work. To achieve this, a comprehensive view of the whole human capital system must be developed, and the leverage points that can be accelerated by 4IR need to be identified. This will be facilitated at the Human Resource Development Council, assisted by the 4IR committee and driven by the digital skills forum. This project  includes a timeframe on deliverable objectives.

Second, the private sector — comprising both large businesses and small, medium and micro enterprises — needs to outline which skills are required and collaborate on strategic projects for mass skills development linked to various industries.

Third, labour unions need to review their role in light of the 4IR and recommend appropriate worker protections. This will have to be done in collaboration with the government to be implemented.

Fourth and finally, academic institutions — ranging from schools to universities to technical and vocational education and training colleges — need to review their curriculums with a focus on the 4IR to ensure the relevance of qualifications based on the requisite skills and the principle of lifelong learning.

For instance, schools should promote digital literacy and a concerted effort should be made to attract students to science, technology, engineering, arts and mathematics subjects. This, of course, cannot happen in silos but requires a concerted effort across the board. If we are to begin to solve our burgeoning unemployment crisis, this is the first step.

Tshilidzi Marwala is a professor and the vice-chancellor of the University of Johannesburg. He deputises for President Cyril Ramaphosa on the Presidential Commission on the Fourth Industrial Revolution

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