Industrial policy options for southern Africa

There is a need to completely transform the underlying economic rules of the economies in southern African nations to address the persistent difficulties of extreme poverty and unemployment.

Two of the region’s methods are the Southern African Enhancement Community’s Eyesight 2050 and its Regional Indicative Strategic Advancement Program. These highlight technological know-how as a way to direct economic progress equitably and sustainably in a developing industrialised region.

But, in our look at, these designs aren’t more than enough. Historic drivers – this kind of as lousy governance and the legacies of colonialism – have stored the region’s prospective locked in adverse cycles. It is real that the want for industrial transformation exists. But the practicalities are not linked with serious acquire-in from power brokers. The end result is lower concentrations of implementation.

The Southern African Enhancement Community has set alone the objective of emulating the significant-progress economies of the Asian Tigers. These include Hong Kong, Singapore, South Korea and Taiwan. But to obtain this it requires to support infrastructure and financial diversification that normally takes economies absent from primary commodities.

In our look at, the co-incidence of two developments offers an prospect for these a transformation. They are the emerging Fourth Industrial Revolution (4IR) and the environmentally friendly economic system. The Fourth Industrial Revolution signifies the likelihood of fundamental modify via technological and scientific developments. The eco-friendly overall economy can be described as a very low carbon, resource effective and socially inclusive method to economic development.

A the latest research by the Futures Programme at the South African Institute of International Affairs highlights a vary of upcoming situations for industrialisation in the location. These really do not predict the long term. Alternatively they explore a vary of uncertainties about regional industrialisation. They also detect troubles and opportunities.

The situations visualise how industrialisation in the location might evolve. They were being mapped from the viewpoint that the eco-friendly economic climate and Fourth Industrial Revolution hold important promise. They have the likely to increase industrial activity, remodel socio-financial growth and progress transitions while alleviating unemployment and inequality.

The state of affairs evaluation gives plausible and feasible choices for industrialisation. It also alerts determination makers to undesired pathways.

The key 4 scenarios are referred to as Do-it-You (Do-it-yourself), Leapfrog Entire world, Eco-friendly Monopolies and Colonialism Reloaded.

Re-wondering industrialisation

The Fourth Industrial Revolution paves the way for elevated interconnectivity and good automation. It does this by building fast and unprecedented alterations to technology, industries and societal patterns. But there is been minor exploration of its effect on the emerging motorists of industrialisation. These include things like speedy urbanisation, populace progress, growing incomes, electrical power decentralisation, climate adjust and decreasing dependence on carbon.

The interaction of the 4IR and other motorists is critical to comprehension the possible influence of industrialisation. Improvements to income, behaviour and perceptions shape consumption and in convert need-and-provide responses.

The demand for cutting down industry’s dependence on carbon and the 4IR has established a new trajectory in technological disruption. This has been accelerated by the COVID-19 pandemic. And this, in change, has forced the swift adoption of electronic resources such as synthetic intelligence, robotics and new modes of work.

For nations around the world in the Southern African Improvement Neighborhood, 4IR can be viewed as a double-edged sword. On the a person hand it provides opportunities. These consist of enhancements in business productivity, banking the unbanked, formalising economies, producing new markets and improving upon general public company obtain.

On the other hand it poses challenges. These include automation at the cost of job generation and moving production operations to additional innovative economies.

Aggressive adoption of 4IR could also deepen inequality by exposing the region’s unprepared abilities base and out-of-date infrastructure to new systems.

The appealing and unwanted

We called 1 of the appealing scenarios leapfrog globe. In this situation nations around the world leapfrog in excess of classical obstacles to swiftly adopt new systems. This is accomplished when the 4IR is ruled by means of powerful democratic ideas.

Some illustrations contain investments in blockchain, squander monitoring and mapping technologies. These would help reorganise, for example, mining and agricultural worth chains. At the exact same time they would minimize destructive effects on the environment. Blockchain can cut down limitations to entry. New rivals could occur in – important for career generation.

A probable (undesirable) upcoming would be colonialism reloaded.

In this circumstance the positive aspects of the 4IR are concentrated amongst a handful of effectively-related multinational businesses. Lots of market members are excluded from the inexperienced overall economy. This would boost existing problems these kinds of as weak technology infrastructure and minimal expertise amounts.

To prevent this, investments in the expertise foundation are necesssary to improve social and civic competencies. They have to accompany investments in engineering infrastructure to enhance entry to economic chances. This will transform the tide on the at any time-growing electronic divide.

Another – pretty possible – unwanted upcoming we termed inexperienced monopolies.

In this circumstance there is a sustainable regional economic climate, thanks to a democratised and empowering 4IR. But the linked industries keep on being unsustainable. The “green monopolised” industries dominate the financial state. They use technological know-how innovations to enhance their financial positions, spreading deep fakes at an unimaginable scale. This effects in polarised communities, social unrest and unfavourable financial conditions.

Improvements in technology are in the palms of a handful of effective monopolies without the need of successful regulatory techniques. This creates the excellent breeding ground for hacking, cybercrimes and corporate bullying strategies. Inequality deepens simply because revenue is extra significant than persons and the environment.

A environmentally friendly monopolies situation will have the resources and political electrical power to devote in technologies these types of as superior robotics. This will produce efficiencies and environmentally sustainable industries. But it will be at the price of task development.

A further probable upcoming is the do-it-yourself (Do-it-yourself) situation.

This is achieved when engineering empowers citizens. An case in point is 3D printing. These kinds of technologies can enable develop self-sustaining villages impartial of the more substantial economies. The democratised procedure delivers the resources to build new merchandise, major to new industries. But there are threats. These technologies also open up the possible for counterfeit products. And they can be harmful by emitting harmful particles.

The way ahead

Industrialisation in southern Africa will demand concerted initiatives in 4 domains. These are:

• expertise progress and engineering infrastructure advancement
• dynamic innovation ecosystems
• round financial state ideas
• practical regulatory frameworks.

If adequately harnessed, industrialisation can offer new pathways to realize personal and collective economic wellbeing. Inequality can be narrowed. And marginalised communities can be at the centre of industrial progress.

The fusion of technologies and financial investment into techniques improvement and work creation is important. This is specially critical for the region’s budding youth population.

Julius Gatune, Senior Task Consultant, Maastricht School of Administration and Deon Cloete, Head SAIIA Futures Programme, South African Institute of Global Affairs

This report is republished from The Dialogue beneath a Innovative Commons license. Read the first article.