The 4th Industrial Revolution Explained – What it is, its Challenges and Opportunities for Africa

In the last couple of years, we have increasingly heard the term Fourth Industrial Revolution. However, most people do not know what it is, the real challenges and opportunities it presents.

So what is it, how did we get here and what are its most adverse effects and opportunities for African businesses?

The Fourth Industrial Industrialization, Commonly known as the 4IR or Industry 4.0 is the growing utilization of new technologies such as artificial intelligence, cloud computing, robotics, 3D printing, the Internet of Things, and advanced wireless technologies among others. It is the new industrial revolution that is ushering the whole world into a whole new era of economic disruption with uncertain socio-economic consequences.

In the past industrial revolutions, Africa has been left behind. In the industrialization age for example, Africa accounted for more than 3% of global manufacturing output in the 1970s which has since halved (Economist Intelligence Unit). Will the 4IR bring a new opportunity for Africa to rise?

So far, Africa is underprivileged when it comes to technology. Everything seems to come from the west. But there’s some areas such as fintech that Africa seems to spearhead.

Majority of African countries lag behind in 4IR major elements such as artificial intelligence (AI), blockchain, 3D printing among others. This is brought by the inability of leadership to develop effective digital strategies in addition to low levels of education in the continent.

Positively, the ICT sector in Africa continues to grow. For instance, mobile innovations have generated 1.7 million direct jobs and is a major contributor to the economic value in the continent.

If African businesses and stakeholders fail to recognize and capitalize on opportunities 4IR brings, it will directly affect risk the continent falling further behind their global counterparts. Therefore, attempts must be made to move past the existing models of innovation, entrepreneurship, and digital growth on the continent, to allow a consumer-driven market.

Further, protection laws and regulations that encourage competition should be put in place. This, in turn, will create many opportunities for the continent such as;

First, 4IR will aid in fighting poverty and inequality by giving access to information, opportunities and services that better the lives of the poor in the continent. AI, the Internet of Things (IoT), and blockchain can enhance opportunities for data gathering and analysis for more targeted and effective poverty reduction strategies

Through digitization, companies are laying off employees whose jobs have become automated, an example of how technology is affecting the labor market. However, with an estimated that Africa’s workforce will be the largest in the world by 2030, the continent must reinvent her education system. Stakeholders in the education sector must develop policies that enhance the implementation of a curriculum that combines STEM (science, technology, engineering, and mathematics) and creativity-based skills such as critical thinking and collaboration (soft-skills) which allow workers to trade on their uniquely human capabilities.

When this is done, the continent will be able to reinvent her labor market, skills, and production through a better educated, trained and prepared youth.

“The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.” says Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF).

In addition, 4IR will increase financial services and investment. Fintech has already taken root in Africa and new technologies can push it to the next level through the use of blockchain since they are immutable. The revolution will modernize agriculture and agro-industries by reducing the cost of production while at the same time maximizing the output.

For businesses, leaders must realize that everything is evolving at an exponential rather than a linear pace as it used to be. 4IR is forcing every business to rethink their models of production, customer interactions, analysis as well as the methods of delivery.

In supply, for example, introduction of new technologies that create entirely new ways of serving existing needs will significantly disrupt existing industry value chains. Competition will shift to favor businesses with access to global digital platforms for research, development, marketing, sales, and distribution. The cost of production will also be significantly reduced.

It is evident that major shifts in demand are occurring as consumers get more informed and sophisticated. Businesses therefore must ensure transparency and consumer engagement through adapting their designs. The market is also evolving on how delivery is done, and deliver products and services.

As expected, a revolution comes with its fair share of challenges. To start with, 4IR disrupts the entire idea of traditional marketing which requires a lot of human input. Today, marketers need to spend more time focusing on automation to analyze market trends, customer preferences, data analysis and interpretation. These challenges will requires businesses to invest in expensive technology that can perform these tasks, which also render some jobs redundant.

However, to the advantage of the businesses, the automated processes execute trades at a pace which is impossible to match with human marketers. According to their pre-defined calculation, execution algorithms make decisions and perform trades to maximize profitability.

Getting Ready

For businesses in Africa to adequately prepare for 4IR in a way that they are not left behind, they need to develop physical and digital infrastructure and increase their intellectual capital.

Developing physical and digital infrastructure involves the acquisition of the latest technology.  Keeping up with technology is very tricky as it is very expensive and changes very quickly, but it is a necessity or the business risk being overtaken by newer entrants. Investing in this infrastructure will always keep the business one step ahead.

The major opportunity for business growth in Africa lies in the way in which we use data we collect to solve problems in a responsible manner. What questions you want your data to answer?

With an increase in data collection, business leaders must ask themselves the big business questions: how can this data help to improve profits and increase revenues? How can we remove friction from digital processes, and smooth our risk-making approach?

By employing machine learning to automate processes and data analysis, businesses can minimize the time taken to make decisions that would have traditionally taken months into weeks or even days thereby increasing human productivity than ever before.

The other thing businesses can do is refresh. This applies to employees as well as the management who should go through the necessary training to keep up with the technology. It would be counterproductive to have the latest technology while lacking the intellectual capacity to handle it. A decision, therefore, has to be made to train employees and management, let go of redundant employees and hire new talent where necessary.