Technology Watch - Opinion

Time has come to deal with the latest industrial revolution

Uber, tipoff the Iceberg

Authoririties world-wide have been failing to come to grips with the ‘new industrial revolution’ that has been raging globally for some time already.

What has been happening in Sandton, Gauteng lately with licensed, metered taxi operators’ actions against the online-based Uber transport service is a symptom of this reality. The scenes of intimidation and harassment of Uber drivers and passengers in Sandton echo similar events in cities like Toronto, Canada, and Paris, France. 

The outcry in Cape Town over the impounding of Uber vehicles by traffic officials in recent times is another example of the same problem.

What is happening around the ‘Uber phenomenon’, which is disrupting the highly regulated transport industry in every new market it enters, is just the tip of the iceberg that goes by several names.

Some call it the “new industrial revolution”, others the “Internet of Things” (IoT) or “the network effect” and even “Uberisation”.

Caused by accelerated development of internet-based applications the world has become much more ‘digitised’, impacting dramatically on just about every economic, social, organisational, business and manufacturing sector of societies worldwide.

Some time coming

The highly structured and regulated transport industry, and the metered taxis sector in particular, should not have been surprised by the Uber phenomenon. Neither are participants in that sector the first victims of the digital internet revolution.

Just consider what has happened to the music industry, printed media, book publishers, journalism as a profession or those in the banking industry aspiring to become branch managers.

Anyone old enough to remember the days when you could sit down with your local branch manager, or even lower order credit manager, to negotiate for and explain the whys of an overdraft, has felt the effect of the unfolding revolution.

Like their French colleagues, who are fighting Uber’s rise in the courts, London’s cab-owners want Uber off their streets in what is probably a lost cause in the face of the less formal ‘laws’ of economics, lower costs to the consumer and higher efficiencies.

The real big impact on the livelihoods and jobs of a much wider cadre of ordinary people still lies ahead – probably in the not too distant future.

Just consider the impact of developments in 3D printing on professions like civil engineering, and on those employed in the construction industry and industries like metal casting. Currently a company in the Netherlands is building a bridge across a canal in Amsterdam using 3D printing robots.

The United States manufacturing giant General Electric (GE) has just forecast a new phase in this ‘new industrial revolution’ with machines fitted with ‘smart components’ going online, fundamentally changing the way in which products are designed, created and manufactured.

In the process, as happened with previous technological transitions, many new kinds of job opportunities will open, especially for those who succeed in acquiring the appropriate skills. But, as has happened during previous technological transitions, those skilled for and set in jobs tied to existing technologies are likely to become ‘redundant’ and fall onto hard times.

The scope of things

The momentum of the new industrial revolution is sustained, among other things, by the fact that close to half the world’s population, translating into about three billion people, are already connected to the internet. And a substantial percentage of them 24/7 via devices like smart phones.

To what extent, what GE calls the “industrial internet” is already a reality, is underscored by the fact that an estimated 50 billion machines fitted with the necessary chips and sensors are, or soon will be, connected to the internet. With it comes the monitoring of the performance of machines, instant access to almost incalculable data and a host of services.

The first industrial revolution, starting in the late 18th century and lasting until the mid- 19th century, which saw production of goods move from people to machines, marked a turning point in the daily lives of people on just about every front. By the late 19th and early 20th centuries it improved the standard of living for the general population in the industrialised world.

Before arriving at that point there had, however, been major disruptions and hardships for large numbers of people.

The McKinsey Global Institute (MGI), according to a report last month in the International Business Times, said the “global economy is in the middle of a dramatic transition that will have 3 000 times the impact of the Industrial Revolution and requires businesses and governments to overhaul their decision-making processes”.

According to the MGI, four major disruptors – globalisation, technology, ageing and urbanisation – are at the heart of the transformation taking place.

Richard Dobbs, a director at the institute, said: “These forces are bigger than anything we've seen before and will hit the global economy on a big scale. The Industrial Revolution involved 10 million people. The changes we're seeing in emerging markets involve three billion people.”

We think

Not only are all three the factors identified by MGI prominently present in South Africa, but as the local Uber problems illustrate, the country has no hope of escaping the impact of the “new industrial revolution”. In fact, Uber is only the tip of the iceberg and some urgent pro-active thinking, planning and action are called for.

The other side of the coin is that South Africa, as Africa’s most advanced economy, is also well-positioned to make the most of the opportunities that the revolution brings – if we get our ducks in a row. If we don’t, it might just destroy the already fragile socio-economic fibre holding us together as a country.


Also read: Final Word

by Piet Coetzer

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