Picture: ISTOCK
The much-vaunted fourth industrial revolution has
arrived, and SA needs to shape up to its challenges or be left behind as
a (relatively) low-wage, low-growth country.
So holds the wisdom of the World Economic Forum (WEF) and a growing number of South African politicians and business leaders. SA needs to carve out its niche in service and other high-value industries through technological innovation. For the public sector, policy initiatives need to consider ways to exploit technology for better service delivery and community engagement, and cities are the best place for this to happen.
But is local government up to the job of sculpting the "smart cities" that will usher in a new era of economic development?
Recent spending cuts and their knock-on effects on infrastructure projects in metros mean cities are unlikely to be leading players in the short to medium term in positioning SA on the frontier of what President Cyril Ramaphosa terms a "digital industrial revolution".
So holds the wisdom of the World Economic Forum (WEF) and a growing number of South African politicians and business leaders. SA needs to carve out its niche in service and other high-value industries through technological innovation. For the public sector, policy initiatives need to consider ways to exploit technology for better service delivery and community engagement, and cities are the best place for this to happen.
But is local government up to the job of sculpting the "smart cities" that will usher in a new era of economic development?
Recent spending cuts and their knock-on effects on infrastructure projects in metros mean cities are unlikely to be leading players in the short to medium term in positioning SA on the frontier of what President Cyril Ramaphosa terms a "digital industrial revolution".
In his state of the nation address he said: "Our
prosperity as a nation depends on our ability to take full advantage of
rapid technological change.
"This means that we urgently need to develop our capabilities in the areas of science, technology and innovation."
This approach is focused on information and communication technology as an enabler.
Gauteng Premier David Makhura presented a more "real economy" line of thinking in his state of the province address, by including consideration of employment and entrepreneurial dimensions.
"The fourth industrial revolution … offers enormous opportunities and some challenges. It is estimated that over 35% of current jobs in SA, and Gauteng in particular, will change and others will disappear completely.
"As part of getting ready for the fourth industrial revolution, the Gauteng government has invested public money in the creation of broadband infrastructure supporting entre-preneurs and youth with their innovations and fast-tracking the establishment of sustainable and innovative businesses in townships," Makhura said.
"This means that we urgently need to develop our capabilities in the areas of science, technology and innovation."
This approach is focused on information and communication technology as an enabler.
Gauteng Premier David Makhura presented a more "real economy" line of thinking in his state of the province address, by including consideration of employment and entrepreneurial dimensions.
"The fourth industrial revolution … offers enormous opportunities and some challenges. It is estimated that over 35% of current jobs in SA, and Gauteng in particular, will change and others will disappear completely.
"As part of getting ready for the fourth industrial revolution, the Gauteng government has invested public money in the creation of broadband infrastructure supporting entre-preneurs and youth with their innovations and fast-tracking the establishment of sustainable and innovative businesses in townships," Makhura said.
There are winners and losers in shifting production systems and global demand and these may become even more pronounced by 'disruptive' technologies, with countries and cities trying to position themselves to be on the winning end of change
It is reassuring in the face of a rapidly changing
economic environment — consider the growth of companies such as Google,
Uber and Airbnb — that there is focused government thinking around the
fourth industrial revolution and its likely effect on the economy,
government and society.
In theory, cities are ideally suited as facilitators of a digital revolution; by providing access to communication systems, enhancing transport and logistics and improving productivity that enables more equitable participation in emerging economic networks and opportunities.
There are winners and losers in shifting production systems and global demand and these may become even more pronounced by "disruptive" technologies, with countries and cities trying to position themselves to be on the winning end of change.
Many South African cities have shown an appetite for "smart city" budget items and programmes that support innovation and the adaptation of technology — such as extended hours for libraries (in Johannesburg), free wifi networks (around places of learning in Tshwane) and mobile apps (such as eThekwini’s Smart City app).
These are important, but are they enough to compete in a rapidly transforming world? Any technological, transport or housing project that improves productivity contributes to a more equitable engagement with a digital economy, and perhaps this is enough.
Tshwane mayor Solly Msimanga was recently quoted as expecting R500m to R1bn to be cut from the metro’s allocations from national government, compromising housing and infrastructure budgets.
Gauteng finance MEC Barbara Creecy also reflected on the implications of the cuts in her R121bn budget for the province (notwithstanding plans to raise R6bn in own revenue to compensate), with the department of human settlements budget to be shaved by R500m and a decline in infrastructure spending from R12.2bn to R11.3bn.
In theory, cities are ideally suited as facilitators of a digital revolution; by providing access to communication systems, enhancing transport and logistics and improving productivity that enables more equitable participation in emerging economic networks and opportunities.
There are winners and losers in shifting production systems and global demand and these may become even more pronounced by "disruptive" technologies, with countries and cities trying to position themselves to be on the winning end of change.
Many South African cities have shown an appetite for "smart city" budget items and programmes that support innovation and the adaptation of technology — such as extended hours for libraries (in Johannesburg), free wifi networks (around places of learning in Tshwane) and mobile apps (such as eThekwini’s Smart City app).
These are important, but are they enough to compete in a rapidly transforming world? Any technological, transport or housing project that improves productivity contributes to a more equitable engagement with a digital economy, and perhaps this is enough.
Tshwane mayor Solly Msimanga was recently quoted as expecting R500m to R1bn to be cut from the metro’s allocations from national government, compromising housing and infrastructure budgets.
Gauteng finance MEC Barbara Creecy also reflected on the implications of the cuts in her R121bn budget for the province (notwithstanding plans to raise R6bn in own revenue to compensate), with the department of human settlements budget to be shaved by R500m and a decline in infrastructure spending from R12.2bn to R11.3bn.
The precarious coalition arrangements in Nelson
Mandela Bay, Johannesburg and Tshwane may have diminished the ability of
their mayors to forge ahead with large capital projects for fear of
controversy and a lack of consensus among opposition parties.
It is alarming to consider that of the R37.9bn budgeted for capital expenditure for the 2017-18 financial year (ending in June), metros had spent only 26.2% by the end of the second quarter on December 31, halfway through the financial year. It is particularly concerning to note that the metros making up Gauteng’s Global City Region also constitute the worst spending laggards (even if theirs are some of the more sizeable budgets).
So if the fourth industrial revolution is upon us, who will benefit if cities are focused on surviving fiscal cuts? "Smart" investments in technology will be in the hands of private innovators, and while this should be encouraged, these advances are most likely to be in our most productive localities, which are also our most advantaged.
The digital revolution is, therefore, most likely to be positively felt by those with private means while cities will play catch-up for the majority of South Africans, perpetuating the inequity of the past. It can only be hoped that innovative projects such as those under way at the Council for Scientific and Industrial Research will be able to spread the benefits of technology to a wider community, with the support of emerging national and provincial policy to mitigate social risks.
According to Klaus Schwab, founder and executive chairman of the WEF, the fourth industrial revolution represents a technological revolution "that will fundamentally alter the way we live, work and relate to one another. In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before. One thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society."
Mobile devices, massive processing power, storage capacity and access to knowledge are expected to be boosted by artificial intelligence, robotics, the internet, autonomous vehicles, 3D printing, nanotechnology, biotechnology, energy storage and quantum computing.
While these developments can boost incomes and improve quality of life by enhancing efficiency and productivity, they are also likely to fuel inequality and erode labour markets.
Governments are provided an opportunity to engage with citizens in new ways, as well as potentially increasing control through surveillance systems and digital infrastructure.
• Heese is Municipal IQ’s economist, while Allan is its MD.
It is alarming to consider that of the R37.9bn budgeted for capital expenditure for the 2017-18 financial year (ending in June), metros had spent only 26.2% by the end of the second quarter on December 31, halfway through the financial year. It is particularly concerning to note that the metros making up Gauteng’s Global City Region also constitute the worst spending laggards (even if theirs are some of the more sizeable budgets).
So if the fourth industrial revolution is upon us, who will benefit if cities are focused on surviving fiscal cuts? "Smart" investments in technology will be in the hands of private innovators, and while this should be encouraged, these advances are most likely to be in our most productive localities, which are also our most advantaged.
The digital revolution is, therefore, most likely to be positively felt by those with private means while cities will play catch-up for the majority of South Africans, perpetuating the inequity of the past. It can only be hoped that innovative projects such as those under way at the Council for Scientific and Industrial Research will be able to spread the benefits of technology to a wider community, with the support of emerging national and provincial policy to mitigate social risks.
According to Klaus Schwab, founder and executive chairman of the WEF, the fourth industrial revolution represents a technological revolution "that will fundamentally alter the way we live, work and relate to one another. In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before. One thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society."
Mobile devices, massive processing power, storage capacity and access to knowledge are expected to be boosted by artificial intelligence, robotics, the internet, autonomous vehicles, 3D printing, nanotechnology, biotechnology, energy storage and quantum computing.
While these developments can boost incomes and improve quality of life by enhancing efficiency and productivity, they are also likely to fuel inequality and erode labour markets.
Governments are provided an opportunity to engage with citizens in new ways, as well as potentially increasing control through surveillance systems and digital infrastructure.
• Heese is Municipal IQ’s economist, while Allan is its MD.
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