“This continent needs to industrialise. We need to do that because the changes that have happened up to now meant that it was never a good thing just to be a producer and exporter of primary products,” Davies said.
“But the way things have unfolded in the past few decades is that the proportion of final products that is constituted by the primary product that’s in it, is the smallest part and the diminishing part of the final value of the product.”
Davies was speaking on the sidelines of the World Economic Forum (WEF) on Africa in Durban, wrapping up on Friday, with the summit featuring political and business leaders and civil society discussing inclusive growth on the continent.
Davies said that the Fourth Industrial Revolution, an era characterised by a fusion of technologies that was blurring the lines between the physical, digital, and biological spheres, had created an enormous potential for technology to be used to solve a range of societal and business problems.
“All of this is happening in the context of major technological changes like robotics, artificial intelligence, internet of things and all kinds of digitised processes that are coming in. And they have, as I can see it, created an enormous potential for use of new devices and new technologies to solve a number of problems that have bedevilled development up to now,” Davies said.
“They do create opportunities to connect up with people a lot more effectively than before, and in some cases the barriers of entry to small companies into more advanced processes are being lowered, but on the other side the barriers of entry to workers into industrial processes are being raised.”
Despite this, Davies said the emergence of technology had created “winner takes all markets” and had the potential to perpetuate inequality.
“The theme of inclusive growth is fundamental. If we don’t have any inclusivity, we are already seeing in the world now the adoption of these new technologies, in the context of winner-takes-all markets innovators of technology win and those who are second and third get nothing, and that goes with huge increases in inequality around the globe and within countries,” Davies said.
“Finding inclusive growth models and addressing the social and economic together is going to be the way forward. But it requires that we address these things in multi-lateral cooperation because it cannot be done at national government level. We have got backlashes which are leading to much more mercantilism, it’s all about me and mine and not global good.”Davies also confirmed that his department would be launching the new Industrial Policy Action Plan on Monday, to identify the stream of work that would help align South Africa with the Fourth Industrial Revolution.