‘Low wages mean high opportunity’, Friedman tells DES

Ntombi Mkandhla

South Africans could benefit from the Fourth Industrial Revolution if they simultaneously embraced future technologies and the capitalist concept of monetising low wage rates. 

This was the key thought shared by Dr George Friedman, a geopolitical forecaster, international affairs strategist and keynote speaker at the Fourth Industrial South Africa (4IRSA) Digital Economy Summit at Gallagher Estates in Johannesburg today, Friday July 5.

Friedman explained that technologies solve different problems in society, as with the internal combustion engine which revolutionised the movement of goods. He explained that South Africa’s fundamental problem was that of upper mobility.

 “Look at South Africa’s geopolitical reality,” he said, adding that the country had an inequality crisis where vast numbers of its citizens were poor. 

“Telling people to go to school and learn vast coding languages won’t solve this fundamental problem,” Friedman said. 

To level out the economic playing field, he said South Africa should use the “foundations of modern capitalism”, where exporting low-wage commodities could boost the economy.

He gave the examples of China, Japan and the United States, whose economies slumped after civil and other wars but were eventually revived after they took advantage of cheap labour and low wage rates. 

“Those countries were in far worse shape than South Africa is in,” he said. South Africa could capitalise on building companies that made inserts for shoes, linings for coats or that assembled cell phones. It had the opportunity to globally monetise such industries to boost the economy.

“[South Africa] needs to monetise low-wage opportunities in a world market that is hungry for low-priced goods,” he said.

“Disorder is opportunity in capitalism because you cannot go down,” he said, adding that South Africa could not afford more disappointment due to class inequality. Caption: Dr George Friendman speaking at the Digital Economy Summit in Johannesburg.