How the Fourth Industrial Revolution will Disrupt African Business
“The future of work” and the “fourth industrial revolution” are commonly-used terms but what do they mean? What is the relevance, if any, and potential implications for African Businesses? Can we really believe scare stories in the media about an impending “jobpocalypse” at the hands of automation? Or is there more to it than that? Should we fear or welcome the rise of the machines?
The fourth industrial revolution, is so called because the speed of current breakthroughs has no historical precedent – it’s occurring at an exponential rather than a linear pace. It is disrupting almost every industry in every country and its happening across Africa now.
It is: A digital revolution, characterised by a fusion of technologies blurring the lines of the physical, digital, and biological realms, underpinned by a revolution of technological breakthroughs (e.g. AI, Robotics, the ‘Internet of Things’).
It will: Disrupt most industries in most countries and will transform entire systems of production, management, and governance raising profound questions for governments and organisations across the continent.
We’ll see: An unprecedented paradigm shift; consider that the most in-demand occupations or specialties today did not exist 10 years ago and in Western economies 65% of children entering primary school today will ultimately end up working in jobs that do not yet exist.
Key Forces of Change
Dig beneath the descriptions, and the media coverage, and Willis Towers Watson in association with the World Economic Forum, has identified five key forces of change which in turn, shape two emerging themes that will define the future of work for the next quarter of a century and beyond. These five change drivers are:
A truly connected world: Information flows will be faster, more global, richer, and more available to everyone. Work will be done from anywhere, creating a truly global talent ecosystem and faster product development. Organisational reputation will become a pivotal currency in customer and work markets.
Social and organisational reconfiguration: Increased autonomy, and decision-making authority of the global workforce will make the workplace more power-balanced and less authoritative, structured more through social networks and less through hierarchy. Work relationships will be more freelance, gig, and project-based and less exclusively employment-based. Organisations will tap more diverse avenues for sourcing and engaging talent that extend beyond traditional employment.
Human and machine collaboration: Technological breakthroughs will produce exponential disruptions in markets and business. The rapid adoption of robots, autonomous vehicles, commoditized sensors, artificial intelligence, and global collaboration will renew our thinking about work.
All inclusive, more diverse talent market: Multiple generations will increasingly participate as workers, today’s minority segments will become majorities, older individuals will work longer, and work will be more seamlessly distributed around the globe through 24/7 operations. Organisations that win, will develop new employment contracts and hone new leadership styles and worker engagement approaches to address the varied cultural preferences in policies, practices, work design, rewards and benefits. HR functions need to get ahead of this curve now.
Exponential pattern of technological change: Technological breakthroughs will force organisations to adapt and reinvent themselves more quickly. Meanwhile the workforce faces the risk of job loss and skill obsolescence, requiring that they adapt and reinvent themselves.
Arising out of these five forces of change are the two key defining features of the fourth Industrial revolution.
Democratisation of Work
No longer will companies be a places containing employees doing work. Rather they will become places that organise talent and work, and may well do it virtually. It’s happening now, the rise of talent platforms such as Topcoder or Upwork, means organisations can source top talent on demand. Other work pluralities are happening now as well, from contingent gig economy workers, to partnerships, volunteers, alliances etc. Traditional employment – which came about in the 2nd industrial revolution, (i.e., get hired into an organisation, build a career, retire from that same organisation) is already a dying model.
Outsourcing – around for decades now; is good for replicate-able, lower skill tasks – most organisations use some kind of outsourced arrangement and many African economies have benefited from outsourcing.
Free agents – these are contract hires who come in with a particular skill or a particular experience that your organisation needs for a specific timeframe (or when you can’t find a full-time, more permanent hire in the market).
Alliances – this is a relationship between two organisations who stand to profit from one another’s employee expertise, much more quickly and effectively than they would alone. Optimizing the build/buy/borrow talent strategy (Astrazeneca and Bristol Meyers Squibb formed a global diabetes alliance in 2013, merging the marketing teams from each organisation.
Robotics -, robotic process automation and artificial intelligence are part of the skills and work activity equation.
The net result of this, is that “company culture, all elements of the interaction between the company and its employees will become obsolete”.
The future of work is about “talent culture”
Wherever and however that talent is found and deployed. Which of course means that companies that win, will have to re-define their purpose and employee value proposition into a more flexible, tailored series of talent propositions, enabling them to attract, engage and retain talent even if it is not directly employed by them.
The second major force of change is Technological Empowerment, this really provides the mechanisms for how we get things done and is transforming the way we live and work. Machine learning, 3D printing, mobile, wearables, and algorithmic analytics are some of the many technologies that promise to improve individual empowerment. Amazon for example, has cut the “click to ship” time from 60-75 minutes (time for employees to manually sift through the stacks, pick the product, pack it, and ship it). Now, robots handle the same job in 15 minutes. Robots are more efficient and take up less space than their human counterparts. That means warehouse design can be modified with more shelf space and less wide aisles. Fewer shelf stackers but more robot trainers!
The upshot of this technological empowerment is Work and Jobs are being transformed. With tech enablement, employment will no longer be the dominant model or the singular model through which companies get work done. One estimate from McKinsey is that about 51% of jobs will potentially have between 5% and 25% of their work component taken away. There are many studies in a similar vein.
It is studies like this, producing headlines about robots taking our jobs, which can be particularly alarming to workers in countries that already have high levels of unemployment. However, similar fears were voiced about the internet, fears that were unfounded, one study by News Online has concluded that for every job lost to the internet 2.7 jobs were created. Additionally, another study suggests that globally 75 million jobs will be lost to machines, but that 135 million new ones will be created.
Preparing for the Future
So what can companies in general and African organisations in particular, actually do to prepare for and profit from the risks and opportunities inherent in the future of work?
Willis Towers Watson has already started working with clients to redesign work for the future, and yes, in some cases this means traditional jobs will disappear in their entirety, especially those of a more routine, manual and non-cognitive nature. In brief companies do this by a process of deconstructing individual jobs into their component parts, and then identifying for each component part what the best way is to get that piece of work done, e.g., by a robot, a gig worker, a partner organisation etc. These jobs are then “reconstructed”, in the most efficient fashion.
This work architecture re-design does not have to mean fewer jobs. One global aerospace manufacturer re-designed the work architecture of turbine fan forgers, a risky, labour intensive job, replacing this role with AI and robotics. Net result? A huge leap in quality and efficiency but also an increase in the workforce from 600 to 900 with the creation of new roles such as Vision Designer, that guides and supports the robots, Robotic Engineers and Robot Trainers.
Willis Towers Watson argues that initiatives such as these clarify the need for a comprehensive ‘augmentation strategy’, an approach where businesses look to utilize the automation of some job tasks to complement and enhance their human workforces ’comparative strengths and ultimately to enable and empower employees to extend to their full potential.
Interestingly, if the future of work means job redesign with either full automation or AI/Human augmentation, multiple sources through which work may be done and a redefinition of what an organisation is and does, then many functions within companies will have to change, and fast. For example, the Risk and HR functions. What is the remit of a Human Resources Manager when 30% of the resources they manage are no longer human? The Risk management function will also have to fundamentally change. Does a more decentralised, talent platform based talent pool increase risk in areas like cyber security, reputational risk and protection of intellectual property? Arguably the answer is a clear “yes”. Alternatively, other risks will potentially diminish, for example the risks of investing in a workforce that may rapidly become obsolete with ever increasing costs to re-train or re-hire in order to keep up with a fast changing world. Labour costs still remain by far and away the biggest financial cost for many organisations. So by using on demand talent and de-risking your talent development proposition, much of that financial risk dissipates.
One key question is the extent to which this future world will impact and play out in Africa. Does it pose a threat or an opportunity? In many ways this is analogous to what happened across the content with the advent of mobile telecommunications. In the late ‘80’s and ‘90’s Africa was underserved in telecommunication terms. The capital cost of building out fixed line telecommunications infrastructure was prohibitive. Mobile phones changed all that, and enabled the continent to leapfrog those capital constraints and avoid an increasingly expensive and obsolete model of land based telephony. The advent of mobile had a huge knock on effect in other areas, from straightforward employment creation to mobile banking and microfinance, a massive uplift in efficiency and significant social and political impact.
In my travels across Africa talking about the Future of Work I am often asked how this is in any way relevant to African economies. Where are the African companies that use different employment relationships like talent platforms? That are examples of jobs that didn’t exist ten years ago? That leverage new technologies? That elevate the consumer experience and change the way in which organisations deliver their products and services, and does all of this in an emerging economy? The answer is that the core precepts of the Future of Work, Democratisation and Technological Empowerment are giving rise to new companies in Africa now. One such example is Dial Dakatari in Kenya, a rapidly growing Telemedicine firm.
Africa has 25% of the world’s disease burden, but only 3% of the world’s health professionals and just 1% of global healthcare spend. Recreating the infrastructure of a typical western healthcare system is realistically going to take too long and be too expensive. Dial Daktari, is in the process of revolutionising the potential for healthcare in Africa, and is a prime example of a “future of work” organisation. It leverages technological empowerment, with a platform based talent pool to deliver personalised primary healthcare to its customers.
A Dial Daktari customer is able to access a real time consultation with a live human healthcare professional (not a chatbot) using their mobile device at a time of their choosing. The medical practitioners providing that service are a multi-lingual talent platform of healthcare specialists that may be located anywhere in the world. They can triage the initial diagnosis and prescribe, and prescriptions are then delivered direct to the customer. In a few years that delivery is likely to be by drone, locked onto the user’s mobile signal.
Dial Daktari’s founder, Kenyan Dr. Don Othoro, summarises the impact of this service…
“The net benefits are; the ability to access healthcare, reduced waiting times and reduced unnecessary visits to healthcare professionals. Faster diagnosis and intervention, more localised and integrated primary care, overall reduced costs to patients and healthcare systems, and better outcomes in preventative care and management of chronic conditions”
Unsurprisingly, many organisations across Africa are building services such as these into their employee benefit programmes.
So in sum, African economies and businesses are not immune to the risks posed by the 4th Industrial Revolution and its effects are increasingly being felt by companies, employees and political systems. However, fortune favours the brave and many like Dial Daktari see not risk but huge opportunity. Are you ready to seize the future?
Crispin Marriott is a Client Relationship Director at Willis Towers Watson.