South is embarking on a series of initiatives and summits aimed at upscaling innovation across various sectors in the next few weeks and months, as the country and the rest of the continent look to navigate the ever-changing Fourth Industrial Revolution (4IR) landscape.

South Africa turns its focus to science, technology and innovation to level the 4IR playing field

This week the African Union Development Agency (AUDA-Nepad), the Council for Scientific and Industrial Research and Stellenbosch University, launched a centre of excellence in science, technology and innovation to upscale and commercialise home-grown innovations on the continent.

In the same week the Dutch government and companies also held a week-long virtual tech mission with South African counterparts on health technology, financial technology and smart logistics.

These meetings come at a time when the country is preparing to hold a Digital Economy Investment Conference in September 2021, and while the government is in discussions with industry stakeholders on the implementation of a master plan for the digital economy, which is yet to be made public.

There are concerns from various stakeholders that a countrywide plan is urgently needed as South Africa continues to lag in embracing and commercialising technology and innovation, and key constituencies such as SMMEs and labour are especially being negatively impacted due to a lack of support to help them navigate the new digital economy and workplaces.

Earlier in June, the Parliamentary Budget Office (PBO) held a briefing on the country’s inadequate pace in ensuring economic development, and listed challenges in industrialisation, manufacturing and technology.

A document released by the PBO warns that South Africa is not achieving significant transformation and has instead “prematurely deindustrialised”.

“Structural regression linked to inadequate industrial transformation is likely to mean that technology and innovation required for South Africa’s leap into 4IR will be severely constrained,” reads the report.

It says historical evidence shows that the development of manufacturing can drive technology dependent productivity of other economic sectors within value chains.

The document cites how productivity has increased in agriculture with advances in the manufacturing of agricultural machinery, chemical fertilisers and genetic engineering.

“Manufacturing is considered key to structural economic transformation because it has strong linkages across entire value chains from primary sectors such as mining and agriculture through to advanced services like engineering and design.”

But instead, the decrease in manufacturing investment has caused capital stock to age and decline.

“The technology for 4IR is introduced as manufacturing and productive services grow through investment and addition of new capital stock,” the document reads.

“Learning and innovation for 4IR occurs cumulatively though applying labour to new technologies embedded in new capital stock.”

During discussions on the document, PBO deputy director for economics, Seeraj Mohamed, said that many people thought that talk of manufacturing was outdated, especially because of 4IR and the growth in the information and communication technology sector.

However, he said that particularly in East Asia and China, manufacturing was still an engine for growth and technological development.

The report also advocates for new investments for 4IR platforms across sectors to occur within value chains and throughout economic infrastructure.

PBO economic analyst Rashaad Amra told the meeting that adequate economic and social infrastructure were critical for growth.

“One cannot partake in the gains of 4IR without sufficient 4G, fibre and the likes,” he said.

The report says poor policy implementation, including the radio frequency spectrum auction delays, has had a dire consequence on investment. This was despite the country’s economic reconstruction and recovery plan prioritising
infrastructure-led growth including in energy, telecoms and transport.

It says innovation is crucial for energy and food security.

“Primary normative policy (should be) to improve food security through increasing incomes, either through welfare (such as social grants), or through increasing employment or entrepreneurship,” the document reads.

On energy, it says that overall, the country’s energy security has deteriorated over the last 15 years. And, the increase in the cost of electricity for businesses and households has made South Africa less competitive and electricity less affordable.

It says reasons include an under-investment in the processing infrastructure for oil and liquid fuels, a lack of a nuclear programme at an affordable pace and rate, finalising bioenergy regulations, and implementing price and market regulatory changes to increase usage of liquified petroleum gas as an alternative energy source for heating and cooking.

The document also calls for an increase in the state and fiscal policy supporting localisation and the green economy.

“With the (Covid-19) pandemic (to) ease the suffering of the poor and unemployed, countries have realised that expansionary fiscal policy should be used while boosting economic recovery and growth

“They are also using expansionary fiscal policy to support infrastructure investment while looking toward supporting a transition away from fossil fuels,” it reads.

It says the central role of the state in the transition to a green economy must be to resuscitate infrastructure, improve levels of employment, provide improved and even free healthcare, as well as other efforts to reduce inequality and to support increased localisation of production.

“Sustained government investment that is well targeted could support the supply side of the economy and curtail inflation and increase localisation.”

PBO director Dumisani Jantjies told the meeting that many countries and multilateral institutions were rethinking the role of the state in supporting economic growth and development. This included greater public/private partnerships.

He said that technology, innovation and human development were some areas where many countries were likely to support development, which had been recognised by the United Nations.

And in September, AI Expo Africa, which is the largest business focused Artificial Intelligence (AI), Robotic Process Automation (RPA) and 4IR trade event on the continent, will take place.

By: Amy Musgrave