China currently ranks as the most competitive manufacturing nation in the world, which isn’t a surprise. But the prediction that it won’t be in 2020 certainly is, especially when you include that it will be surpassed by the United States.
This seems absurd from a popular narrative: China has more people, lower wages and much greater capacity to scale than US manufacturers. But the prediction, made in Deloitte’s 2016 Global Manufacturing Competitiveness Index, is based on the views of international manufacturing executives. Several reasons are cited for this change in fortunes, but the leading component is the rise of ‘Manufacturing 4.0’.
We’re hearing a lot of ‘4.0’ lately, specifically the Fourth Industrial Revolution or 4IR. I will start by saying that 4IR is a fact: though its predicted outcomes may change a little, the overall idea of a highly connected world – where smart systems impact real environments with fast decision-making – is not only realistic, it’s happening right now.
There is considerably more to 4IR ideas than simply automating work and repurposing the freed resources. It impacts how things are done in profound ways. An example of this is SpaceX when compared to NASA. Though not a completely equal comparison, NASA’s budget for 2015 was $18 billion. SpaceX’s total budget for its first decade was $1 billion. Much of this difference is because SpaceX could engineer its technologies from scratch, using new breakthroughs that didn’t exist 60 years ago.
This illustrates the dramatic jump modern technologies have been creating, a force characterised by the 4IR. The dramatic shift between Chinese and American manufacturing underline the lateral shift caused by Manufacturing 4.0.
4IR is a fact and nations need to act or risk being left behind. This is particularly important for African manufacturers, which can use the jump to leap into the frontline of modern manufacturing. But to do so, we shouldn’t just fall for the idea of 4IR. We need to figure out how to make 4IR work on African terms.
Africa faces several serious challenges. The manufacturing base here is poorly developed and resources leave the continent in droves. By some estimates, the number of resources leaving Africa dwarf aid and many investment vehicles. This doesn’t have to be the case: Côte d’Ivoire, a country with few natural resources, refines oil for its regional neighbour Nigeria.
But that’s an outlier. Most resources leave us and the final products are shipped in for us to buy – we are skipping the manufacturing step, to our own detriment. There must be more focus on keeping as much of Africa’s manufacturing value chains inside the continent. We certainly have the resources, space and people. But the latter falls short with skills.
Skills shortages are possibly the biggest threat to Africa’s future. Not only aren’t we stepping up to the technical skills that the 4IR demands, but we are also neglecting artisanal skills that are key for good manufacturing. This is why I warn against just blindly following the 4IR trail: it does not address skill shortages and will even cause larger gaps. If every child is encouraged to code, but few are shown the more physical activities that underpin good manufacturing, we aren’t moving in the right direction.
African nations should establish platforms that promote artisanal training and other manufacturing skills. The automotive sector locally has been probing these options – we should pursue them more aggressively and across more manufacturing verticals.
The 4IR represents a massive opportunity to change the continent, but it must serve our needs. That same technology risks outpacing the continent and leaving it with a big hole. But that is our choice to make. Technology won’t raise Africa up. Only its people can do that.