The world is flat: ÍøÒ×ÌåÓý becomes the driving force for 4IR

1 June 2020 - Barry Dwolatzky and Mark Harris

The most profound change is the accelerated of way in which digital transformation and the Fourth Industrial Revolution have moved at warp speed.

In February 2020 the Presidential Commission on the 4th Industrial Revolution (4IR) finalised its recommendations. As it did so an unexpected and terrifying tsunami was gathering on the horizon. On 26 March South Africa went into a national lockdown in response to the ÍøÒ×ÌåÓý pandemic.

It is still far too early to understand the ramifications of the pandemic on the country, our economy and institutions. However, one immediate and obvious consequence has been the rapid adoption of digital technology. This is driven by necessity as the world has been catapulted into rapid digital transformation.

Many people are discussing the ¡°new normal¡± that will emerge beyond the current coronavirus emergency. There seems to be a consensus that we won¡¯t simply return to our old ways of working, at least until a vaccine is available, but possibly forever. New standards for health and safety are emerging that will prioritise social and physical distancing. These standards will permanently influence the nature of the ¡°workplace¡± and how work is done. What will the ¡°new normal¡± look like? Has 4IR suddenly arrived?

Digital transformation inhibitors

Over recent years many digital transformation initiatives have failed, both in South Africa and internationally. In an article in Forbes magazine published on 30 September 2019, Blake Morgan wrote that 70% of corporate digital transformations fail.

While each failed transformation initiative can be attributed to specific reasons, a common theme in almost all failed digital transformation projects is a lack of buy-in. Either executive support for the proposed initiative is insufficient or change management is unsuccessful. People have a natural propensity to resist change, and digital transformation usually involves a profound and significant change in how people are expected, or required, to behave.

In South Africa, the challenge of creating a new digital world is compounded by other inhibitors to the digital transformation such as poor connectivity, lack of digital literacy and a low level of access to suitable technology, such as smartphones. 

Some examples of digital transformation in SA in response to ÍøÒ×ÌåÓý

Detailed case studies of how specific organisations and sectors in South Africa are responding to the pandemic are still to be written. We have, however, been collecting some of our own observations and those of others. We have used these to inform the comments that follow.

The sudden decision by the government to impose a general lockdown gave companies and institutions only three days to move to a work-from-home (WFH) policy. Different sectors dealt with this enormous challenge in different ways, some coping better than others

The health sector: Perhaps the most important example of digital adoption in the health sector has been the rapid adoption of basic tele-medicine methods. Health practitioners, including GPs, psychologists, biokineticists and pharmacists have started using tools such as WhatsApp, Zoom and various apps to engage with patients and clients. There has also been innovative use of data visualisation tools such as Google¡¯s Data Studio to aggregate and present ÍøÒ×ÌåÓý data in the form of dashboards.

Education: Although the issue of e-learning and distance education has been discussed in South Africa for decades, the sudden arrival of the lockdown caught most institutions completely unprepared. It is in this sector that the deep chasm of the digital divide has become most visible. Issues of connectivity (both the cost and availability of network connection) and access to technology and computer literacy have become critical factors. We have, however, seen rapid adoption of e-learning and distance education tools and methods.

Justice: Who would have imagined a few months ago that advocates would be arguing cases on Zoom to judges while they all sat in their studies at home? This is now happening in ¡°virtual courtrooms¡± around South Africa. One of the professions most reluctant to embrace digital transformation before the lockdown has been transformed in the space of a few weeks.

We could list other sectors. Driven by necessity, individuals and institutions are willingly adopting digital technology in order to survive and continue operations. And ¨C most importantly ¨C the technology adopted has been existing applications that are readily available. This digital transformation has been achieved at a very low cost using technology that is free, some of it open source, and all of it easy to use.

Digital transformation in South Africa beyond the pandemic

It is our belief that the pandemic has removed some of the significant inhibitors to digital transformation in South Africa. These are:

Executive buy-in: With the arrival of ÍøÒ×ÌåÓý, executives who in the past were lukewarm to digital adoption now have evidence that digital technology actually works within the context of their organisation, and that it supports effective and better ways of working.

Policies and regulation: Both government and business are having to rewrite a variety of policies and regulations to accommodate the need for rapid change to cope with the changes we are experiencing.

Buy-in from staff and other stakeholders: Before the pandemic, many people working in organisations and people interacting with organisations might have been resistant to using digital technology. The pandemic has blown away many of these doubts and opened up people¡¯s minds to different ways of working and interacting.

Concerns about cost and new technologies: A common preconception has been that digital transformation is expensive and requires the development of new customised digital solutions with a large price-tag. Many organisations have made effective use of available, low-cost (or free) solutions, most of it on the Cloud.

Concerns about skills: Another preconception is that digital transformation requires lengthy and expensive training of existing staff, or recruitment of new staff. During the ÍøÒ×ÌåÓý crisis many people have rapidly and easily taken to working in a digital world.

Connectivity and access: While some short-term solutions have been found during the lockdown period, a great deal will need to be done in the future to remove the digital divide. Government, companies and other institutions have all come to realise the importance of having the entire population well connected. 

Redefining a ¡®job¡¯

In the old style of working, a ¡°job¡± is defined as supervised attendance at the workplace. Being employed means having a ¡°job¡±, which means that one is paid to spend a certain number of hours each month at a place of work. This is usually understood as a specific physical space in an office provided by the employer. Measurements of an employee¡¯s performance are usually relative to time spent at the workplace and managers track delivery through inspection. We might, for example, measure productivity as the output produced per time spent at the workplace.

WFH fundamentally changes the definition of a job. In the future, jobs will be deconstructed into a set of activities or tasks. In thinking about a ¡°job¡± we will no longer see it as belonging to an individual. The tasks within a job might be done by different individuals, or might even be automated and done by robots. While there will still be tasks that require physical presence, this will likely be the focus of moves to drive automation. We¡¯ll discuss this in more detail later.

A redefinition of the notion of a job brings into focus the issue of how work is measured and how it is managed. There will be a requirement for new tools and processes. These tools will be designed to give management oversight of tasks. The output of tasks will need to be monitored, measured and coordinated.

Human resource models will have to be re-examined

Contractual relationships that currently bind an individual having a job to a specific organisation will be replaced by tools that measure task outputs. Instead of me saying, ¡°I have an employment contract with Company X that defines my job at Company X¡±, I will say: ¡°I spend my day doing tasks of a certain type. I get rewarded for completing these tasks. Some of the tasks I do are for Company X.¡± This trend emerged several years ago under the definition of the ¡°Gig Economy¡±, which is defined as an arrangement where organisations and independent workers engage via a digital platform in short-term work arrangements. The changes brought about by the ÍøÒ×ÌåÓý pandemic will see this trend accelerate rapidly and will bring a larger variety of tasks into this mode of working.

Management philosophies will be dramatically impacted by new human capital data

Many of the changes brought about by remote working and a redefinition of the notions of ¡°a job¡± and a ¡°workplace¡± will increase the importance of data to manage the organisation. We are destined to see a transition from human-to-machine interaction to far more machine-to-machine (M2M) activity. This type of communication results in the generation and use of large amounts of data. Although this is not new, it will become far more pervasive.

Given the importance of data, all organisations will need to develop very clear strategies on the collection, storage, use and management of data. This is called ¡°data governance¡± and it will become a central requirement in our new way of working.

Automation will become widespread

We have touched on automation in relation to redefining jobs and sequences of tasks, some of which might be automated, or performed by robots. Social distancing and the WFH will result in society adapting to working more interactively with chatbots, robots and other forms of automation. An important prerequisite for wide-scale automation is the availability of data. This seems set to become a reality, based partly on the increased use of M2M communication and the Internet of Things (IoT).

ÍøÒ×ÌåÓý  flattens the world

In his 2005 book ¡°The World is Flat¡± Thomas L Friedman writes about small companies accessing advanced skill sets from around the world. If this is used correctly it will be one of the most powerful tools a company can have. It will allow small companies to compete globally and gain access to advanced skill sets (especially in areas such as engineering design) at a reduced cost for a temporary period of time. This allows small local companies to produce globally competitive products without the long-term expenses and risk of employing a large team. This can only be accomplished if done correctly.

In the post-ÍøÒ×ÌåÓý ¡°new-normal¡±, businesses that reject outsourcing will simply not scale at the same speed as the ones that do. For the first time, a piece of work done by an individual in South Africa vs someone outside of our country will only be differentiated by quality, speed and cost. While this might not be creating local employment, it does put South Africa in the position to start exporting technology globally, which will have a significant impact on the local economy. 

Reflections on 4IR

While South Africa¡¯s Presidential Commission on 4IR submitted its recommendations to government early this year, these will need to be rewritten in the light of ÍøÒ×ÌåÓý.

One of the key principles at the heart of the commission, and much of the discussion that has taken place around 4IR, is ¡°technological determinism¡±, ie, technology drives change. The response to ÍøÒ×ÌåÓý implies that rather than technological determinism we are seeing the opposite driver for change, namely ¡°social determinism¡±. At the same time, core concepts such as the notion of ¡°jobs¡± and ¡°workplaces¡± are being redefined.

It has become critical that the Presidential Commission on 4IR should re-examine its recommendation from the perspective of social determinism and in the light of redefining some core concepts. While a new 4IR strategy will be required for the post-ÍøÒ×ÌåÓý South Africa, it will need to take account of the many changes currently happening outside of any strategic framework.

Professor Barry Dwolatzky is Emeritus Professor at the University of the Witwatersrand and director of the Joburg Centre for Software Engineering. Mark Harris is CEO of Altron Nexus. This article first appeared in Daily Maverick/Business Maverick.