Most developing countries have very little understanding of the wave of change that is generally called the Fourth Industrial Revolution. Change is coming and speed will be a defining aspect of the future. If you think the market or a bank has no feelings, try an artificial intelligence algorithm running from a server in the cloud.
Fear, anger, and a yearning for a glorious past that probably never existed seems to be pervasive in most corners of the world, and certainly in South Africa. This is true across the political spectrum.
History has seen many examples of deceptive exponential change
While I have much sympathy for the need to understand how we got here, trying to fix old problems might not be an appropriate response in a world where the fundamental questions are changing. The future is approaching much more rapidly than many think and not just in South Africa.
The Industrial Revolution was easy to spot after the fact, but there was no denying the impact or speed with which change occurred. It irreversibly impacted the fabric of all societies. Your society either benefitted from the change or was steamrolled into submission. Avoidance was not an option.
The early years of the Industrial Revolution started a period of turbulence that led to massive economic and political disruptions. The benefits mainly accrued to the Western economies and often at huge costs to the populations. The new-found power and hunger for resources affected every corner of the world. This was especially true of the least developed parts and led to the unchallenged carving up of Africa, for example, by European powers at the Berlin Conference in 1884. Resistance was futile (if heroic).
It can be argued that the world might currently be on the cusp of great changes yet again.
To a mainstream macroeconomist, the world has become increasingly irrational and even downright ridiculous since the great financial crisis. This probably reached a zenith with the choice of the British people to unscramble the results of two generations of European integration by voting for Brexit. European integration was brought about specifically because of nationalist hubris and naked aggression in earlier times. The horrors of the First and Second World Wars and the ravaging of modern mechanised warfare made European populations choose closer integration as a necessity. The economic costs and the loss of imperial empires provided ample incentive for more cooperation with the neighbour rather than building more/bigger walls. The incredible growth and economic expansion this resulted in has provided all the evidence required to declare that free trade and democracy form the path to nirvana. This was the path chosen by the industrialised West and a few Asian Tiger economies.
The second great experiment flowing from the disruption of the Industrial Revolution and the Great War was that of Soviet-style socialism. The epic implosion of this system in the 1980s sucker-punched the left and made Fukuyama’s famous declaration of “the end of history” a sure bet.
Western/US-style open markets and democracy were the only future possible. A bountiful tax revenue kept the system bubbling along. The European experiment was working well and nations couldn’t wait to join up. The Washington Consensus ruled the (best-practice) world and China became a juggernaut on the back of global trade and integration.
Yet somehow the trickle-down benefits of the system didn’t really deliver what was hoped for and global inequality and poverty, while certainly less in absolute terms, never improved that much in relative terms. The rich stayed rich (and mostly got exponentially richer) while the poor kept working harder. On aggregate, the poor are better off in terms of material well-being but there is no denying that there is still very widespread poverty.
It all came crashing down during the financial crisis that opened fault lines in the underlying global fabric. Unconventional monetary policies were, fortunately, able to avert a full-blown meltdown and global depression, but in their wake came the requirement for a significant adjustment in most countries. The adjustments were often slow and difficult to pinpoint as they were cloaked in spin. Budgets were never austere, rather they “reprioritised” spending and “streamlined” departments, but the results were the same. In some countries, they were harsh and required urgent and short-term adjustments (Greece, etc.), whereas in others they were more gradual, but global activity levels took a beating. It’s been 10 years now…
In less affluent parts of the world, there was not as much leeway and change was often much bloodier and more violent. The Arab Springs are perfect examples of bottled-up emotions spilling out of the body politic in an uncontrolled fashion.
South Africa, always the individualist, super-charged this complex set of conditions with having to deal with the fallout of the financial crisis and growing internal political dramas, as well as State Capture.
Out of this generalised mess emerged a predictable process of blame, both domestically and globally.
The ruling classes were out of easy policy options. Populists are on the rise and there is little consensus about the most appropriate course of action to greater economic development. But much more disruption might be heading our way via increasing technological innovation.
In South Africa, we haven’t even sorted out most of the historic problems, such as the land question, and many feel that we need to attend to them first before worrying about new ones. Unfortunately, I fear we won’t be given the time needed and that these will need to be added to a long national to-do list.
The world is again on the cusp of great changes
Recently, I attended a course in Silicon Valley (at Singularity University) on the role and potential of converging technologies such as artificial intelligence, augmented reality, and biotech. It is the stuff of sci-fi movies. But it’s already being planned, built, and implemented on a greater scale than I had thought possible.
The first reaction when understanding the scale and breadth of change is that of bewilderment, wonder and, unfortunately, also fear. It is fair to say that most developing countries have very little understanding of the wave of change that is generally called the Fourth Industrial Revolution.
Even more concerning should be that few countries will be able to influence the impact (both positive and negative) on their own societies. We don’t want to be carved up again at some future hypothetical conference like the one in 1884.
Nothing will be unaffected by this exponential change. The rate of change will also increase dramatically in the next few years. Societies sense this and people worry about themselves and their children. Unfortunately, wily politicians—some with serious ties and dark suits and others in bright onesies—play on these fears and offer easy solutions. Some use the new technological capabilities to subtly alter and manage perceptions artificially such as the now infamous Cambridge Analytica/Facebook algorithms. Others use the capabilities to manage large populations with 200 million-strong smart camera systems, soon to expand to more than a billion devices.
But consistently, the primordial dangers of the “us/them” narrative gains traction. Instead of societies trying to figure out how to employ these amazing technological innovations to improve, they rather try and blame some or other group for their failures to adapt earlier.
It is much easier to blame a Mexican migrant for a lost job in the US than that amorphous thing called the internet and online shopping. In South Africa, we blame whole groups for our problems. These groups range from foreigners, government, whites to big business.
Everybody hankers back to a fictitious but glorious past where everything was apparently groovy.
The only problem is this idyllic past never existed. “Glorious” Great Britain exploited the world to be able to afford its beautiful cities, but it really sucked to be low or middle class in some distant colony. It was pretty terrible being poor in England during the glory days of the Empire as well. Make America great again? Oh please… And in South Africa our own dismal past of warfare, theft, and displacement is also conveniently forgotten or selectively remembered at best.
Read the history of any now beautiful spot anywhere on the globe (especially in Europe) and you will find a sordid history of the force, unimaginable violence and the brutal theft of land and peoples by whichever elite was in charge at any given point in time. But that is history now.
Change is coming and speed will be a defining aspect of the future.
Exponential technologies are rewriting the rules
We argue about the past when the real danger is that most of what we do and make currently might actually become obsolete in the near future. Value-adding in the traditional sense is being disrupted on an unprecedented scale. Creating fine whiskey no longer takes 15 years, but can be artificially synthesised within 12 hours to a point where it is indistinguishable from the original.
Fully molecularly-manufactured wines will be launched in 2019 and real leather can be produced without killing an animal. Artificial intelligence, 3D printing, and other technological wonders will revolutionise manufacturing and displace entire supply chains. Imagine what this will do to South African agriculture? Fortunately, the opportunities that these developments bring are limited only by our imaginations.
The “gentle life” that everyone wants might actually be achievable in a world where energy is cheap and new forms of manufacturing revolutionise what is available to mankind. But this is true only if we find a way to distribute it better. If not, then the benefits will still accrue to the owners of capital in distant financial hubs and the systemic risks to the entire system will increase even further.
If you think the market or a bank has no feelings, try an artificial intelligence algorithm running from a server in the cloud.
It’s time for South Africa to really start thinking about the future. We should figure out how to build new things for the country’s benefit rather than arguing about things built before that will probably become obsolete anyway. We worry too much about those companies we have and not nearly enough about those we don’t have or won’t be getting.
The next wave of change will either take you with it into a much better future or bypass you as obsolete to a footnote in history. What’s it gonna be South Africa?
Cobus Venter attended the Singularity University Executive Program in Silicon Valley in June 2019 and contributed this post to share how his SU experience has transformed his view of the world. We regularly feature posts from alumni and community members who share their perspectives and experiences. Content in this post originally appeared in an article Cobus published at Daily Maverick on August 1, 2019.