Although there is general consensus that ICT increases productivity, economists and policymakers have been struggling to determine the exact percentage of economic development which can be attributed to the role of ICT. Photo: Reuters

JOHANNESBURG – Largely, there is agreement that information and communications technologies (ICT) have a positive impact on productivity. In his book titled The Age of Turbulence, former chairperson of the US Federal Reserve, Alan Greenspan, explained how ICT propelled the economies of the countries referred to as the Asian Tigers (South Korea, Hong Kong, Singapore and Taiwan).   

Although there is general consensus that ICT increases productivity, economists and policymakers have been struggling to determine the exact percentage of economic development which can be attributed to the role of ICT. 

During the past five years, the ICT-driven robotics/artificial intelligence (AI) have substantially increased productivity in both the manufacturing and services sectors. The efficiency of advanced robots is boosted by ubiquitous computing, big data, 3D printing, driverless vehicles and the Internet of Things. I observed this when I visited the Huawei Manufacturing Campus in Shenzhen last year. This manufacturing campus will probably need a total of 45 000 employees to produce thousands of parts and finished products daily.

It is my contention that while the robots would have taken about 24 000 jobs, the overall input of Huawei in the broader economy far exceeds the loss of jobs. Moreover, whereas jobs would have been lost in this manufacturing plant, many more jobs would have been created in the value chain and in the broader economy. I have no doubt that Huawei wouldn’t have surpassed iPhone and become the second-largest smartphone supplier in terms of the global market share if it didn’t employ the services of robots, which are powered by AI and abundant broadband services. 

There are no empirical studies that have reported if robotics are jobs creators or killers. It is my assertion that whereas robotics will reduce a number of jobs in a particular firm, their overall impact to economic development will lead to the creation of more jobs in the value chain and broader economy. 

Some analysts are of the opinion that about half of American, Asian and Western European jobs can be done by robots. This has led to some prominent leaders, including Microsoft founder Bill Gates, proposing that robots should be taxed to replace the income tax that an employee would have been taxed.

On the other hand, free market advocates such as former US Treasury Secretary Lawrence Summers have vehemently objected to this.  

At the beginning of this year, lawmakers in the EU voted against a similar proposal and declared it illogical. 

My view is that taxing robots will slow down both production and economic growth and thus the overall tax base for a government's tax revenue will shrink. Renowned economist John Maynard Keynes was proven wrong when, in 1931, he asserted that the widespread usage of technology would lead to unemployment. 

The question is: How many jobs will be done by machines and software in 30 years’ time. At face value, it seems almost all the jobs will be done by the robotics. Be that as it may, high knowledge jobs, which require personal judgment and discretion, will still be done by people. The era of AI and robotics is upon us and we will not be able to fully stop it through taxation or legislation. 

If South Africa wants to propel its productivity and economic growth by fusing knowledge workers and AI, we should start to ensure that our workforce gets proper education, training, and grooming.   

Rabelani Dagada is Professor of Practice in Digital Commerce at the University of Johannesburg’s Postgraduate School of Engineering Management. 
@Rabelani_Dagada

The views expressed here do not necessarily represent those of Business Report..

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