Trade and Industry Minister Dr Rob Davies has highlighted the challenges being posed to the South African economy, and especially industry, by what is called the Fourth Industrial Revolution, or Industry 4.0. He was delivering the keynote address at the sixth Council for Scientific and Industrial Research (CSIR) Conference, in Pretoria, on Thursday.
"We are entering an era, and probably are already in it, in which the premium for innovation has become significantly raised," he highlighted. While innovation had always been important, it was now even more important. "We need to prepare ourselves as a country."
Industry 4.0 included robotics, additive manufacturing ("3D printing"), blockchain software technology and Big Data. These will cause "disruptive change" in manufacturing, not just incremental change.
He pointed out that there were three "domains of innovation". The first is continuous, incremental, improvement, which has a significant cumulative effect over time. This is the Kaizen approach. The second domain is the adaptation of technologies, developed abroad, to local conditions. And the third is "greenfields inventions".
"The obvious important issue is ensuring the commercialisation of these [latter two domains]," he asserted. There have been too many cases of South African innovations having to be commercialised overseas, and sometimes having to be re-imported into the country.
Industry 4.0 "is just adding to the imperative I've just described," he observed. The Department of Trade and Industry (DTI) needed to strengthen its cooperation with the industrial sector and the Department of Science and Technology in order to more efficiently convert a greater proportion of local innovations into commercial products.
The country already has a number of agencies and initiatives acting in this regard. Davies cited four of them.
The National Cleaner Production Centre existed to help local industry to achieve greater energy efficiency and decrease their carbon emissions. He argued that such improvements will become increasingly important, including in terms of business competitiveness. "The National Cleaner Production Centre is one example of where we need to accelerate our efforts."
When South Africa thinks that trade barriers, imposed on ostensibly environmental grounds, are actually protectionist measures, the government will respond. "We will continue to act against [such] unfair barriers to trade," he assured.
The Technology Localisation Implementation Unit supports the localisation of technologies acquired from overseas original equipment manufacturers by State-owned companies and government departments. "There are still a number of implementation challenges," he acknowledged. "There is a piece of work ongoing ... whereby we are aiming to improve and enforce localisation across government departments."
The National Industrialisation Support Initiative, jointly developed by the DTI and the CSIR, will provide South African companies with a product lifecycle support platform. The fourth example is the Mining, Manufacturing and Sustainable Development Hub. These various initiatives demonstrated, he affirmed, "what we can do, what we must do. ... We also have our own technologies, leading to minerals beneficiation."
He pointed out that government departments and agencies could prioritise purchases from local companies, without violating World Trade Organisation rules, because South Africa had not signed the plurilateral Agreement on Government Procurement. The decision not to sign this agreement was consciously made to allow the government to give preference to local companies.
Davies also warned that Industry 4.0 would also disrupt and transform the services sector -- to give just one example, the rapid expansion of electronic commerce -- and even the basic primary sector. Thus, for example, an orange farmer may have to be able to assure export customers that his orchard used only approved pesticides and were free of certain diseases or pests; this will require sophisticated data recording, storage, analysis and tracking systems. A challenge facing the country was the need for properly skilled and qualified workers.
"What we've established, in the DTI, is a Chief Directorate looking at future industrialisation and technologies." This was working with specialists in the Organisation for Economic Cooperation and Development to identify what emerging economies like South Africa should do to meet the challenges of the Fourth Industrial Revolution. What was already clear is that the need will be, Davies warned, "to work harder, smarter".