The role of the state in the economy

1. THE FOURTH INDUSTRIAL REVOLUTIONPORTFOLIO COMMITTEE ON HIGHER EDUCATION, SCIENCE AND TECHNOLOGYMs Jeanette Morwane, Chief Director – ICT Innovations (DTPS)17 August 2019 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

2. The role of the state in the economy The Role of the State in the Economy • “The state provides the institutions and infrastructure that enable the economy and society to operate. Its ability to carry out these functions has a profound impact on the lives of all South Africans” – National Development Plan • This means that the state is: • An enabler (provide basic services and critical infrastructure) • A regulator (setting rules that create equitable opportunities for all players) • A redistributor (ensuring that the most vulnerable in society are protected and given a chance to live up to their full potential) • But, the state cannot operate alone – it must find ways to leverage the strengths of the private sector and civil society • And, the state's ambition needs to be matched by its capacity – we need to rebuild the capacity and skills that have been eroded across the public sector and state-owned companies.

3. Critical Conditions for Growth Critical Conditions for Growth • Economic growth and industrialisation will not succeed unless we URGENTLY ensure Reliable and cost effective energy supply and distribution Allocating broadband spectrum Reliable and cost effective water supply and reticulation Access to the rail network and reducing rail and port cost for National Priority Sectors Each of these will require specific and detailed interventions

4. Context-Transformation towards the 4IR • The world has seen three industrial revolutions • The first Industrial Revolution, which occurred at the end of the 18th century, was characterised by mechanisation through the introduction of water and steam power, replacing cottage industries and manual labour. • The second recognised industrial revolution started in the early 20th century with the introduction of electricity and mass production, changing the scale and speed of manufacturing significantly. • From 1970, with advances in electronics and computing, the world saw a third industrial revolution characterised by increasingly optimised and automated production lines.

5. TECHNOLOGIES FOR 4IR • Cyber • Artificial Intelligence, Block-chain, Quantum, Internet: 1.0 (nets begins), 2.0 (social nets), 3.0 (internet of markets), 4.0 (IoT and IoET) • 2. Physical • 3-D Printing; Robotics; Drones; Augmented and Virtual Reality; Nanotechnology; New Materials: graphene • 3. Biological • Biomedical Engineering; Biotechnology

6. FOURTH INDUSTRIAL REVOLUTION IMPACT • New technologies and platforms will increasingly enable citizens to engage with Governments, voice their opinions, coordinate their efforts, and even circumvent the supervision of public authorities. • Governments will increasingly face pressure to change their current approach to public engagement and policymaking. • Legislators and regulators must continuously adapt to a new, fast-changing environment, reinventing themselves so they can truly understand what it is they are regulating. • Governments and regulatory agencies will need to collaborate closely with business and civil society. • Governments will not be able to address emergence of digital economy in isolation but must build and develop capacity to drive the process robustly

7. SOUTH AFRICA COUNTRY REPORT – WEF REPORT ON COUNTRY READINESS FOR FUTURE PRODUCTION OPPORTUNITIES • South Africa is ranked as a nascent (limited production base and at risk for the future) and within the top 50 countries. Leading countries include; China, Japan, Germany, South Korea and USA. • South Africa’s manufacturing share of the GDP has decreased to 12% since early 1990s. • SA has strongest structure of production in Africa. • SA has ability to innovate with a strong innovation culture and entrepreneurial activities are supported by sophisticated financial sector. • Human capital remains the most pressing challenge, with shortage of engineers, scientists and digital skills. • Stable policy environment but need to improve its institutional frameworks to respond to change.

8. FUTURE OF WORK Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

9. Presidential Commission on the 4th Industrial Revolution • (PC4IR)

10. STATE OF THE NATION ADDRESS • “South Africa has chosen to be a country of the future at a time when the world is changing at a pace and in a manner that is unprecedented in human history. Revolutionary advances in technology were reshaping the way people work and live. Unless we adapt, we understand the nature of the profound change that is reshaping the world, and unless we readily embrace the opportunities it presents, the promise of our nation’s birth will forever remain unfulfilled”. • President of the Republic of South Africa • Honourable Cyril Ramaphosa – SONA 2018

11. AIM & OBJECTIVES • Develop an integrated country strategy and plan to respond to 4IR including detailed interventions to be carried out achieving global competitiveness of the key economic sectors (agriculture, finance, mining, manufacturing, ICT, and STI); • Advise on a technology research and development program to advance 4IR; • Advise on strategies for skills development and future of work; • Make recommendation on enabling relevant infrastructure for SA to participate in the digital economy; • Make recommendations on an institutional framework and mechanism to coordinate 4IR programs; • Make recommendations on approaches to address inclusivity and digital divide; • Make recommendations on interventions to enable innovation and entrepreneurship, and for SMMEs to take advantage of the 4IR; • Advise on strategies to mobilise resources to support the 4IR interventions; and • Make recommendations on mechanisms to measure the impact of interventions on 4IR.

12. COMMISSION WORKSTREAMS Infrastructure and Resources Science, Technology & Innovation Economic and Social impact Human Capital & Future of Work Industrialisation & Commercialisation Policy and Legislation • 2 Additional Work Streams: • Capital Investment and Programme Integration • Timeframes: • Draft Country Strategy – October 2019 and Second Draft in January 2019

13. CURRENT INITIATIVES - DIGITAL TRANSFORMATION CENTRE Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

14. CURRENT INITIATIVES - DIGITAL SKILLS STRATEGY Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

15. CURRENT INITIATIVES - DIGITAL SKILLS STRATEGY Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

16. CURRENT INITIATIVES - DIGITAL SKILLS STRATEGY List of some technology fields which provide a foundation for broader job descriptions. Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

17. CLOSING REMARKS • Need for strong Government Position through a Country 4IR Strategy (deliverable of the Commission). • Prioritise 4th Industrial Revolution Technologies/Approach relevant to SA e.g. (Germany – Digital Production (4.0), Argentina – Digital Government, Japan – Artificial Intelligence, USA – Cloud technologies, Sweden – Financial Technologies, Estonia – Digital Society, China – Manufacturing and e-Commerce, Russia – e-Commerce, etc. • Most countries lean on their productive sectors (Mining, Industrial Development, Tourism, Energy; Transportation, E-Commerce, etc.) • Need to foster collaboration. DTPS should sign an MOU with DHET on skills development covering the following: • Curriculum for the 4IR skills development courses • Universities to develop short courses accredited on 4IR • Upgrade such courses into diploma, postgraduate diploma and then degrees • Universities to develop skills specifically required at the industrial and manufacturing sectors Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

18. THANK YOU Building a better life for all through an enabling and sustainable world class information and communication technologies environment.