In this opinion piece, the Industrial Development Think Tank discusses the need to develop digital skills in the manufacturing knowledge base for South Africa.

The world economy is undergoing a period of structural and technological transformation with the arrival of the Fourth Industrial Revolution (4IR or Industry 4.0). The advent of Industry 4.0 technologies and production methods bring with it an ever-more complex business and operational environment.

In particular, the new age of digitalisation is creating an array of prospects for firms and economies that are willing and better able to capture opportunities emerging from the digital revolution. Research has shown that economies that foster a conducive economic, technological and institutional ecosystem are more easily able to transition to advanced production systems and new digital technologies, and also tend to be at the forefront of innovation, research, and development, and are drastically more competitive, domestically and internationally.

The challenge facing a middle-income and a technological follower country, such as South Africa, is how to develop and modernise the current technological capabilities and infrastructure to more easily usher in and capture emerging opportunities in the 4IR. This is critical as South Africa looks to break from the ‘middle-income trap’ to create new productive jobs, improve productivity, and diversify the production structure of the economy.

Digital skills and capability building to keep up to date with technological transformation is considered fundamental in this process. Industry 4.0 marks a dramatic shift in the type of skills required to perform specific tasks. As a result, various skills development strategies such as the National Skills Development Strategy (NSDS) III have sought to address a range of challenges identified within the South African labour force, noting the existence of a stark skills mismatch between industry needs and training output. The challenge of a skills mismatch in South Africa is that it exacerbates and contributes to the growing trends of poor industrial development and economic inequalities in the economy.

Also, little is known about the current state of skills and capabilities in South Africa’s key manufacturing sectors. Moreover, South African firms are known to operate in isolation with very few collaborations. As South Africa begins to look towards the 4IR and the future of manufacturing, greater collaboration between firms, sector education and training authorities (Setas), universities, and the government is needed to develop a well-thought-out and targeted priority skills list cognisant of the future of industrial activities in South Africa.

The South African economy, therefore, is at a crossroads. To develop policy solutions for these issues, the Department of Trade, Industry, and Competition supported Industrial Development Think Tank (hosted at the Centre for Competition, Regulation, and Economic Development at the University of Johannesburg), has identified the need to develop digital skills in manufacturing knowledge base for South Africa.

Working with the South African Research Chair in Industrial Development, and the Setas that govern skills training in manufacturing and engineering services (MerSETA), chemicals (Chieta), and textiles and fibre processing (FP&M Seta) are collaborating on a research project to conduct an online survey of South African manufacturing firms. The overarching aim of the project is to address the urgent need to build a knowledge base about digital skills at a firm-level in order to assist with the development of a digital skills development strategy for South Africa.

Specifically, the digital skills online survey seeks to understand the current level of and future gaps in skills and technological capabilities in South African manufacturing firms. This is crucial given the link between Industry 4.0, the changing nature of work and skills in South Africa, as well as the importance of a strong manufacturing sector for economic development. Additionally, this is important in the context of South Africa's efforts to develop industrial capacity and propel the economy into the digital age in accordance with the National Development Plan and the Industrial Policy Action Plan.

South Africa’s economic recovery is underway, albeit slowly. The 4IR and the digitalisation revolution hold tremendous prospects for accelerated progress for the South African economy. Understanding what digital skill sets and capabilities are needed to locally foster this technological transformation is a crucial first step towards an inclusive, digitised South Africa.

To find out more about how your firm can contribute to this survey and the generation of a Digital Skills Policy, contact Dr Elvis Avenyo (elvisa@uj.ac.za) or Jason Bell (jasonb@uj.ac.za).