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JOHANNESBURG - An $8bn (R103.43bn) global industry comprising 250million networked motor vehicles, with some 177million wearable devices, involving an estimated 50million sensor-aided product and service offerings and a massive data explosion that is set to dwarf gigabytes to insignificant proportions will impact our economy by 2020 (WEF, 2015 & 2016).

The impending disruption could spell the sad demise for our ailing economy if we do not become zealous about the future of South Africa. The internet of things (IoT) comprises intelligent sensors linked to low power wide area networks (LPWAN) will allow cross-sectoral companies to co-operate with the aim of merging services and products that will provide a holistic experience to their customers.

As such a new digital ecosystem will emerge bearing new opportunities for enterprise development and for innovation. IoT carries concomitant attributes that accompany such pioneering events namely, an uncertain return on investment (Rio), immature technology, unique risks, lack of regulation, etc.

Such attributes present plausible opportunities for South Africa to make progress in the global competitiveness ranking. The level of technological sophistication that is in use today has surpassed human capability in key niche areas. For example, there is technology that is able to recognise individuals based on their gait, facial features and voice.

Masked persons can be identified with 100percent accuracy. Intelligent sensors are amongst others able to detect water quality, humidity, temperature and many other attributes.

Advanced countries like Germany have embedded low power sensors into home appliances so that the detection of failure becomes evident weeks before the inevitable eventuality. Such capabilities have given rise to the emergence of "pay-per-use" services where, for example in the case of washing machines, customers will purchase a service based on the number of washes over a given period. In such cases the appliance is never owned and is more cost effective since maintenance would be free.

"Use cases" is the new terminology given to opportunities for IoT services that could be developed sold to customers. With the vast array of sensors and blurring of product and services, IoT offers the opportunity for enterprises to develop unique use cases that are attractive to their respective customers.

Disruptive

Many have touted the IoT dispensation as being disruptive while cloaked in the disruption are many opportunities for South Africa. The IoT and its subset, "Industry 4.0" (Ind4.0) represent technological sophistication that until recently featured only in text books. Ind4.0 leverages artificial intelligence (AI) within a LPWAN so that processes and componentry within smart factories (IoT environment) communicate with each other in real time.

As such IoT attaches internet functionality to objects on the assembly line rendering them both intelligent and autonomous while passing through their unique developmental phases. Such componentry contain micro processors comprising a unique identity profile that allows the individual assembly line product to follow an autonomous set of processes within the smart factory environment.

As such customisation and mass production become possible at close to zero marginal costs. In other words, customers are able to request customisation without incurring the mountainous costs that were previously associated with such requests.

Ind4.0 marks the return of individualisation (of products) that was lost decades ago with the introduction of mechanisation and mass production. IoT capability comprises features that benefit manufacturers, customers and workers alike. Highly sophisticated processes allow companies to propagate new products and services that in turn carry benefits that improve the quality of the lives of people.

In the healthcare sector, drugs can be customised for certain subgroups to avert side-effects and also address obstacles that might interfere with the practical administration of such drugs. Additionally, IoT wearable devices (also referred to as "wearables") such as watches and impregnated items of clothing monitor blood flow, temperature and heart beats; these data can be fed in real time to central healthcare data centres who in turn can alert individuals about any anomalies that were detected. In so doing potential cardiac problems can be detected before the affected people are aware of these conditions themselves. IoT disruption is therefore an imperative that will among others increase quality of life and reduces costs across sectors in the long run.

We are undoubtedly at the precipice of a massive revolution that will raise the barrier to entry within affected industries, but it is also poised to kindle customer satisfaction toward a more meaningful offering. South Africa’s economy is burdened with an oversupply of low level skills, which should be contained at all cost. In other words, matriculants and other graduates should not contribute to the expansion of the aforementioned group.

SA ranked last

Similarly, too few GET (school) and TVET (college) learners are following the Stem (science, technology, engineering and maths) stream while many who are within said stream do not perform well enough to gain access to (and succeed in) HE (higher education).

South Africa is currently ranked last in the global Stem listing. It is clear that the capability of our manufacturing facilities and our innovation institutions are based on the level of skills of the people who occupy them. Similarly, the performance of the government is only as effective as the level of skills of the people who occupy the public service. The capability of a nation’s human resources (HR) is, therefore, pivotal to the level of competitiveness and robustness of a country.

It is sufficient to say that the embedded opportunities inherent within the impending IoT wave is contingent on the current performance of our youth in GET and the medium- to long-term bolstering of the country’s capability in Stem. The clinical depiction of the impending disruption and the embedded opportunities for South Africa are crystal clear, while the reality of accessing these opportunities pivots on the ability to encourage our youth to persevere in their careers.

In a recent article (Business Report, May 2017) Minister Rob Davies cited innovation as not being all that was needed to assert the country toward the exploitation of opportunities presented by IoT and Ind4.0.

The country’s ailing education system and its poor track record in execution raises concerns about a realistic way forward for the country. Similarly, the effect of poverty, unemployment and inequality limit the level of participation of the nation in bringing about requisite change.

It follows that adequate preparation for IoT and Ind4.0 would ensure the impending disruption is contained so that local manufacturing facilities and services are sufficiently geared to interact within the new digital ecosystem. Notwithstanding the threat of redundancies, embedded opportunities (to name a few) will resort in the following categories, namely: new jobs, diverse services, skills development, hardware development and retail, R&D and product development that leads to intellect-ion property (IP).

To this end preparation should include: curriculum development, skills development, exploitation of cross-sectoral use-cases, strategic collaboration between companies, investment in digital infrastructure, think tanks involving government, business and academia, innovation and IP support and an unequivocal political will.

South Africa’s strong institutional establishments and its world class HE facilities hold the keys to secure a space in the digital value chains that are set to sweep across the globe. South Africa must rise to the challenge. 

Gavin Adams (PhD) is a director: Department of Trade and Industry.

- BUSINESS REPORT