Creating South Africa’s Workforce

Creating South Africa’s Workforce

Digital puts one in three jobs at risk

 

Pandora’s Box

The best thing the cave people did was leave the cave. Technology helped them take that step. Today the possibilities created by technology continue to be felt in every sphere of business and life. Its artefacts, from fire to forks to Facebook and machine learning algorithms, have catapulted humanity from Stone Age to phone age to drone age. We can now solve some of the world’s most intractable problems and finally make significant progress in reducing our usage of our planet’s capital for our living expenses, as economists encouraged us to do over 100 years ago. But technology’s ability to release humans from much physical drudgery is also the source of much fear and anxiety.

John Maynard Keynes predicted this day would come in his 1930 lecture “Economic possibilities for our
grandchildren”. He suggested then that mankind will solve its most pressing economic problem, one that we have been steadily solving since we walked this planet, namely ‘the struggle for subsistence’. Machines will help us produce enough for our needs. But we open Pandora’s box because, as Keynes argued then, solving the economic problem is coupled to a second problem, namely ‘technological unemployment’— ‘unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour’. We are producing more and more (products and services) with less and less need for intervention.

What options are open to us?

Job transition is not new. In the pursuit of higher productivity at lower cost options, jobs have for many years been shed. In recent times, many manufacturing and standard business process intensive jobs were outsourced to countries where labour was cheaper. Those jobs rarely made it back to home soil but at least labour in outsource recipient countries benefitted from the employment opportunities created there. Today, the same phenomenon occurs. But now, the search for labour arbitrage is no longer between physical geographies; today, jobs are lost to the digital world and will, in all probability, never to be done by humans again.

The loss of jobs creates an even bigger problem. Machines do not consume things. Machines do not buy things.
So, while machines can replace human work, they do not drive purchasing power and consumption or GDP as humans do. Humans work. Humans get paid. Humans spend. Humans consume. Society progresses. Humans don’t work. Don’t get paid, can’t spend or consume (much). Society regresses.

While the steady march of progress inevitably spells more and more machine augmentation, allowing humans to
use their time, energy and creativity differently, we are ill prepared for its consequences. Labour is still a major
economic growth driver. Jobs remain the primary mechanism of distributing income and providing humans with
access to the economy. This is especially true in emerging markets—like South Africa—where poverty remains a
problem, rates of unemployment are high and the social security blanket is thin.

There is an answer Instead of being replaced by machines, humans must learn to collaborate with machines to enhance their own productivity and ingenuity. We must learn to ‘run with the machine’.
JOBS AT RISK IN SOUTH AFRICA 

South Africa has made good headway in terms of adopting digital, however, the growing maturity of its digital economy has yet to translate into significant growth, especially for labour.

While it scores well in terms of digital competitiveness compared to its emerging market peers (Figure 1) and its demographics—50 percent of the population is under 30 years old—are well suited to the demands of a digitally-driven economy (Figure 2), South Africa’s economy remains weak. Population growth has overtaken GDP growth (Figure 3). Labour and income growth are declining (Figure 4) while unemployment (now at 28 percent), and especially youth unemployment (at 36%), is high. Jobless youth make up 75 percent of the unemployed.

Figure 1: South Africa is ahead in terms of adopting digital

Figure 2: Almost 50 percent of the population is under 30 years old

Figure 3: Population growth has overtaken GDP growth

Figure 4: South Africa – household disposable income and unemployment rate

Until now, digital technologies have been deployed to work alongside people and automation has occurred
only in isolated cases. Now, as digital technologies advance, the threat of automation grows. It will eliminate
a broad swath of jobs across the economy, aggravating the risk of unemployment. And, as digital technologies become ever more sophisticated, more waves of job displacement will almost certainly occur. It is a distressing picture.

To quantify the size of the challenge, Accenture commissioned South Africa-specific research. The result: 35 percent of all jobs in South Africa are currently at risk of total automation— i.e. machines can perform 75 percent of the activities that make up these jobs. The threat is significantly higher in South Africa than in more advanced economies such as Germany (24 percent), and second only to Brazil (46 percent) in this study (Figure 5).

Fully understanding the risk

For the study, Accenture Research developed an econometric model using labour data from Statistics South
Africa (Stats SA)4 to gain insights beyond just the job categories at risk. To fully understand the risk, it identified
the share of job activities in each category that can be automated.

Human-like (analytical, leadership, social intelligence, creativity) and machine-like activities (routine work,
transactions, manual work) were allocated across professions and adjusted based on local South African statistics, including type of work, skills and tasks, the recent skills evolution in jobs, degree of work automation, work supply demographics and productive structure.

The results clearly show that occupations that allocate more time to human-like activities have a lower probability of automation, while workers involved in occupations such as production, office administration, farming, food preparation, construction, mining, transportation, installation and maintenance are at highest risk.

For South Africa, initial findings show that 35 percent of all jobs in South Africa are currently at risk of total automation. By 2025, this will reduce to 20 percent as workforces evolve with new digital demands across
occupations

Figure 5: Jobs with risk of automation by country

 

Which jobs are at risk?

Both white – and blue-collar jobs are at risk (Figure 6).

The more predictable and repetitive the activities that make up the task, the more likely it is to be replicated by machines … and automated. The jobs of clerks, cashiers, tellers, construction-, mining- and maintenance workers all fall into this category.

The more intensive the use of human-like skills to perform a task, the less likely it is to be automated. Jobs with less than 25 percent of risk of automation will comfortably ‘run with the machine’. Hard-to-automate jobs include tasks like influencing people, teaching people, programming, real-time discussions, advising people, negotiating
and cooperating with co-workers.

Figure 6: Top 10 jobs at risk in South Africa

 

Clearly, the threat that automation and the growing sophistication of digital technology (e.g., AI) poses to jobs in
South Africa will add considerable stress on an already pressured economy. But there are also answers and a significant incentive to act now. Digital—a growth multiplier Digital technologies will usher in a new economic era—they overcome the physical limitations of capital and labour, exposing new sources of value and growth, increasing efficiency and driving competitiveness. Without these technologies, companies will lose market share and be left behind, and economies will stagnate. The opportunity for South Africa is considerable.

Accenture Research shows that one major digital technology, artificial intelligence (AI), has the potential to boost labour productivity in countries by up to 40 percent by 2035 as innovative technologies enable people to make better use of their time. By embedding AI and making it a factor of production, this research indicates that South Africa could potentially double the size of its economy five years earlier.

To rise to this challenge, South Africa will need to recalibrate its economy and its workforce for digital, developing
an environment in which humans and machines work together to engage with customers, and create entirely new products, services and markets. This will drive demand and consumption within the economy, boosting growth.

The foundations are in place. With a strong digital economy in the making and the right demographics, South
Africa has the tools to stimulate economic growth and reduce the number of jobs at risk. But, to be effective, the key intervention— increasing the pace at which the workforce acquires the skills essential to maximise the benefits of human-machine collaboration—must start now.

The research indicates that at its current rate of learning, South Africa will shift to ‘running-with-the-machine’ activities (those that that require more human-like skills) slower than other developed countries. However, by reallocating skills and doubling the pace at which its workforce acquires relevant skills, South Africa can reshape work and activities such that the share of jobs at risk of being fully automated reduce from 35 percent (5.7 million jobs) to 14 percent (2.5 million jobs) by 2025 (Figure 5). This intervention equates to reducing the risk of automation for an additional one million jobs.

Figure 7: Doubling the pace of learning will reduce jobs at risk of automation in South Africa from 35 percent to 14 percent by 2015

 

INTRODUCING NEW SKILLS 

Human beings have an amazing capacity to learn new skills and adapt to new environments. This is true not only in early life, but throughout our lives. As the nature of work evolves—i.e., becoming more digital and human, cooperative and collaborative, knowledge and taskbased, flexible and fluid—employees and entrepreneurs will need to adapt their mix of skills and knowledge to embrace new challenges and stay relevant.

In addition to a big data analysis of in-demand skill trends, a review of skill frameworks and a landscape
scan of 1,000 workforce development programmes, Accenture interviewed experts from a wide variety of fields, from neuroscience and corporate learning to education and workforce development. We then used these insights to help identify and categorise both the universal skill families and the underlying cognitive capabilities needed for inclusion in the digital economy. We call the resulting taxonomy ‘New Skills Now,’ and the six skills families that underpin it are: Learn to Earn, Build Tech Know-How, Apply We’Q, Create and Solve, Cultivate a Growth Mindset and Specialise for Work (Figure 8).

Figure 8: The New Skills Now Taxonomy, Accenture

RESPONSIVE, RESPONSIBLE AND RESPONSE-ABLED LEADERSHIP IS CRUCIAL

If our challenge is securing economic growth for South Africans through the provision of access to, and participation in the economy without compromisingglobal competitiveness and the productivity that comes from digital technologies, multi-stakeholder leadership and collaboration is our collective crisis.

To avoid any stakeholder feeling coerced into investing into longer-term shared economic growth while
potentially compromising short-term efficiency gains, a new model of co-operation is needed. Such a model will
involve multiple ecosystem stakeholders and will shift the current paradigm from doing well or doing good to doing well and doing good.

A clear collaborative multi-stakeholder approach is needed.

Government

Government needs to be at the forefront of creating opportunities for its citizens to access digital technologies
across areas such as infrastructure, connectivity, skills, incentives, policy frameworks and regulation. It must also set policy to regulate action across areas where the digital revolution is likely to have the most impact. Key areas will include eCommerce, cybersecurity, digital healthcare, the creation of a digital society (e.g., regulate more stringently the cost of data, which is in enabler), driving the acquisition of digital skills, and service provision.

South Africa talked about The Social Plan14 in the late nineties and early 2000s when retrenchments were rife.
Attempts to implement it were not very successful. Today an opportunity exists to revisit the concept of a Social
Plan and re-design it to take advantage of technology advances, as well as expand it to reach across more than one generation in a family or community.

Corporate South Africa

Large corporates have pivotal roles to play in attaining South Africa’s shared economic future. In addition to
preparing their organisations to take advantage of the benefits of digital technologies, businesses should also work at using technology to enhance growth beyond achieving efficiencies.
Corporates can allay fears of job losses by committing to:

  • Creating job alternatives through reskilling initiatives
  • Communicating transparently and honestly and engaging with employees and other stakeholders
  • Taking all impacted parties along on the journey
Organised Labour

Organised labour needs to accept that digital technologies bring the potential for economic growth and global
competitiveness. The course of the digital revolution cannot be changed but it can be smartly managed.

The United Association of South Africa (UASA) talks about South Africa’s future workforce needing to align its skillset to keep pace with developments. Organised labour plays an important role in preparing the next generation of workers to contribute meaningfully to inclusive growth and economic transformation.

Institutions of Learning

Institutions of learning have to pivot too.

According to Edgar Morin, the French philosopher and sociologist15, we need new systems of learning for both what and how we learn across organisations, governments, non-governmental organisations and institutions of
research and education. Morin argues that the education of the future should be such that ‘we are better able to
grasp realities and problems which are ever more global, transversal, polydisciplinary and planetary’.

Prof. Tshilidzi Marwala, Vice-Chancellor and Principal of the University of Johannesburg talks about multidisciplinary education being the way to go in preparing for the workforce of the future. He states that we will need graduates who are innovative, internationally oriented and have strong problem solving capabilities. Scientists need to have soft skills and social science and humanities students will need to have technical skills.

Industry Associations

Industry associations need to lead the discussions, keep abreast of research, do
research of their own and continue to drive engagement and conversation on
matters of change.

CONCLUSION

Advances in technology have changed the nature of work since time immemorial. In the times of the first Industrial Revolution, things got worse before they got better. In Britain, the Luddites, a group of skilled artisans (textile workers and weavers) destroyed machinery in textile mills as a form of protest against machines taking their jobs. Out of that era came secondary and tertiary education, the minimum wage, bans on child labour and major public health advances, from vaccinations to sanitation. It was both the best of times and the worst of times as Dickens wrote. It’s time to change again.

The adjustments we require in this era will be equally large and will additionally require both economic focus and political attention. We’ve seen the harsh beginnings of this in the United States, with Brexit in Europe, with the ‘Arab Spring’ and, in South Africa, with Marikana and the “fees must fall” protests. Anger about inequality and social and economic exclusion is brewing under the surface.

While Luddites still live among us, we have to resolve the jobs debate in a way that does not impact our competitiveness. Keeping machines at bay would, as University of Oxford professor Luciano Floridi indicates, “damage technological innovation and fail to improve the human condition”.

This period of ‘maladjustment’, where new uses for labour are still somewhat illusory, is temporary.There are many questions. Will there be enough jobs to fill our time? Will working for money be replaced by working for meaning? In the future, will jobs be fewer and work weeks shorter, and will jobs be shared? The answers are already apparent. We will find new jobs. We will not only do things differently, we will do different things. New industries will emerge. But the future trajectory of countries will, by and large, be determined by how they ensure economic access for all to build a consumer class with the purchasing power to spend on the goods and services that businesses produce with the aid of machines.

 

 

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 435,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.co.za
Pivoting With AI – How Embracing Artificial Intelligence As An Emerging Business Accelerator Can Drive Economic Growth

Pivoting With AI – How Embracing Artificial Intelligence As An Emerging Business Accelerator Can Drive Economic Growth

ARTIFICIAL INTELLIGENCE –A GAME CHANGER FOR SOUTH AFRICA?

In South Africa, where economic growth has been stagnant and digital adoption is accelerating but still lags global trends, the imperative to transform is urgent. Artificial Intelligence (AI), as a key component of a digital business environment and as an enabler of industry-disrupting advances, is a game-changer that deserves attention.

Organisations that are able to leverage technologies like AI to reshape our world will have the opportunity to weave themselves into a new digital society. For economies that adopt AI, a future of increased annual growth rates awaits, a future in which quantum computing’s near-unlimited processing and algorithmic power can solve difficult problems in entirely new ways across multiple industries.

WHAT IMPACT COULD AI HAVE IN SOUTH AFRICA?

South Africa is facing low economic growth. Unemployment is high, skills levels are low, and productivity and competitiveness are declining. There are multiple challenges specific to business and industry sectors that AI could help address.

In South Africa, the majority of organisations are dealing with legacy technologies, systems, business models and corporate structures, large core workforces and sunk investments in owned infrastructure.

Many businesses are just starting their digital journeys, addressing data quality and data management—fundamental building blocks for digitalisation of businesses—and coming to terms with the new business models,processes and skills needed to leverage the opportunities a digital world offers.

The addition of AI to process automation and to augment human capabilities can deliver huge value for businesses, driving efficiencies, productivity and innovation.Across key industry sectors, South Africa is facing a number of challenges. The contributions of the agriculture and manufacturing sectors to South Africa’s GDP are declining. And the growth prospects of the consumer goods industry, which is closely linked to the economic health of the country, is down. A lack of skills, insufficient and deteriorating infrastructure, a lack of access to information, and outdated regulatory policies are among the many issues impacting this decline.

How could AI help?

In the agricultural sector, the use of autonomous vehicles, drones and sensors will enable precision agriculture,
improving use of resources and increasing yields.

In the manufacturing sector, embedding intelligence throughout the value chain and in products can improve responsiveness to demand, and enable the introduction of many value-adding services.

To organisations in business and industry, AI may seem a long way off. It is not.

AI CAN DOUBLE SOUTH AFRICA’S ECONOMY

AI is emerging as new factor of production. South Africa can no longer depend on increases in capital and
labour to drive economic growth. Careful investment in AI can, however, transform the country’s economy. Accenture’s research quantifies the value,and pinpoints where and how AI can most readily deliver value in this country.

AI BOOSTS GVA ACROSS INDUSTRY SECTORS 

In 2017, Accenture’s research showed that AI has the potential to add up to an entire percentage point to annual economic growth rates in South Africa by 2035. This means that by embedding AI in the economy, South Africa could potentially double the size of its economy size five years earlier.

This alone is a compelling reason for the country to jump onto the AI bandwagon. In this paper, we drill down, showing the impact of AI on South Africa’s industriesand how each of these will benefit from AI. The numbers are significant.

Our research shows that Manufacturing, Agriculture and Wholesale and Retail, Accommodation and Food Services will benefit the most with use of AI boosting their annual gross value add (GVA) growth rates by 1.4, 1.2 and 1.1 percentage points, respectively, in 2035.

In absolute dollar terms, Public Services and Finance and Business Services will gain the most with additional boosts to their annual GVA of R308 billion and R252 billion, respectively, in 2035. The potential gross value add of AI-augmented growth for South Africa: R1,372 billion.

What will it take to succeed?

To successfully pursue an AI agenda in South Africa, policy makers and business leaders must prepare for, and work toward a future with artificial intelligence. To do this they must understand that AI is not simply another productivity enhancer; it is a tool that can transform our thinking about how growth is created.

WHAT IS ARTIFICIAL INTELLIGENCE?

AI is not a new field; much of its theoretical and technological underpinning was developed over the past 70 years by computer scientists such as Alan Turing, Marvin Minsky and John McCarthy.

Today, the term refers to multiple technologies that can be combined in different ways to:

SENSE

Computer vision and audio processing, for example,are able to actively perceive the world around them by acquiring and processing images, sound and speech. The use of facial recognition at border control kiosks is one practical example of how it can improve productivity.

COMPREHEND

Natural language processing and inference engines can enable AI systems to analyse and understand the information collected. This technology is used to power the language translation feature of search engine results.

ACT

An AI system can take action through technologies such as expert systems and inference engines, or undertake actions in the physical world. Auto-pilot features and assisted braking capabilities in cars are examples of this. 

All three capabilities are underpinned by the ability to learn from experience and adapt over time. AI already exists to some degree in many industries but the extent to which it is becoming part of our daily
lives is set to grow fast.

Two key factors are enabling AI growth:

1 Unlimited access to computing power

Public cloud computing was estimated to reach almost US$70 billion in 2015 worldwide. Data storage has also become abundant.

2 Growth in big data

Global data has seen a compound annual growth rate (CAGR) of more than 50 percent since 2010 as more of
the devices around us have become connected. As Barry Smyth, professor of computer science at University College Dublin, tells us: “Data is to AI what food is to humans.” So in a more digital world, the exponential growth of data is constantly feeding AI improvements.

AI IN SOUTH AFRICA – MOVE FORWARD

There is no doubt that AI will create a quantum change in every industry segment over the next decade. The opportunity for South Africa is not just to improve efficiencies, but use AI to close gaps and radically improve productivity of people and assets, spur innovation and increase competitiveness across sectors.

The time to move forward—at every level, from reskilling for an AI future todeveloping policies to drive adoption and ensure ethical use of AI—is now.

SOURCES

  1. ABA Journal, “How artificial intelligence is transforming the legal profession,” April 1, 2016
  2. Robotics Business Review, “Fetch Robotics,” 2015
  3. Finders, K., “IPsoft gives automation platform a face,” September 30, 2014.
  4. IPsoft, “Amelia: Mortgage broker agent at a global bank,” 2016.
  5. Ford, “Ford teams up with MIT and Stanford to advance automated driving research,” January 22, 2014
  6. Ventureburn, SA startup Aerobotics secures funding round from Nedbank VC fund,13 July, 2018
  7. United Arab Emirates Government, UAE Artificial Intelligence Strategy

For the full report please visit https://www.accenture.com/_acnmedia/pdf-85/accenture-pivoting-with-ai-pov.pdf.

 

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 449,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.