Published January 2018
Who will still have a job in 2020?
Gosh, who cares about what happens in two years’ time. Everyone is worried about who will still have a job at the end of 2018, right?
Fear not for I work with several economists and none of them are leaving South Africa, which is ironic because they are one of the industries that will be replaced by, what I call, the Digital Revolution.
Within this term, the Digital Revolution, I am collectively including everything that covers the Internet, automation, the Internet of Things and any other technologies that are replacing the tasks of us humans and, in most cases, doing a far better job than us and at a far lower cost to business owners.
Employment has been a subject of much debate in South Africa for a very long time. It is a real important subject in Africa in general. One report I found during research said that we need to find over 180 million jobs in the next few years because of the job losses expected from the Digital Revolution.
180 million jobs equates to all of South Africa’s population multiplied by three.
I do want to quickly say sorry for what I feel is my second consecutive pessimistic article. I feel that my article on the I.o.T. also had a shadow of gloom about it. The fact is Google says 800 million jobs will be lost by 2030 because of the Digital Industry Revolution. If one is to believe Google, maybe we should pay attention and factor this risk into our planning?
When I say WE, I mean each individual business owner.
I am happy to add some sugar to my spice…or sugar to my salt… some good to the bad.
Fortunately, countries with less money and technology are at a lower risk.
Back to the bad:
South Africa is one of the richest countries in Africa, so we are likely to suffer a lot.
In fact, don’t be surprised if, in a couple years, you see the list below repeated as a list of countries that have suffered the most job losses to be in this order.
In South Africa, unemployment is around 27% of our workforce.
Yes, 1 in 4 people are unemployed. I do believe that 1 in 4 of those unemployed people need a major kick in the butt to help them wake up and see that work is not going to come to them. It needs to be aggressively searched for and you cannot be picky.
I extend that belief to any unemployed youth anywhere in the World.
In South Africa, most of our unemployed are our youth. Of course, younger people lack a sense of urgency by nature, and not because they are bad people.
Unemployment is not the core subject of this article, so I don’t want to ramble on about it too much. Suffice to say, I believe in South Africa we are trying to fix this problem with the wrong tools. We are using a hammer when we should be using a precision screwdriver.
I am referring, of course, to what is taught in school, added to that the attitude of our youth. Many of our matriculants are walking out of their graduation ceremonies and back home to watch TV.
I get CVs from these students every week. It is scary how many students are in need of work.
Want to know what is scarier?
1 in 4 of the job applications I receive is sent by a parent, not the child.
With that said, I know everyone is different. I had about five jobs when I was younger, and I reinvested in myself time and time again. I invoiced my first million when I was very young. I believe I did what Richards suggested time and time again.
Back then I launched what appeared to be an entire company, on the web at least, from a bedroom in my gran’s house, using nothing but a dairy and a very old Alcatel cell phone. I don’t like to expose posts from my personal social media, but I posted something on my personal account this week, which I think to be very relevant here, so I will gladly share it.
Web design was the third division in my company.
If there is a need…try making money off it!
Sure, you will fail sometimes… but you will have at least walked away with a lesson.
Just like the time I booked myself out as stilt walker for a Cape Town radio station’s event on the beach, called Moonstruck…I had never stood on a pair of stilts before, but the invoice went out, got paid and I learned.
Entrepreneurship and small businesses are the only viable solution in Africa. Working more than two jobs or more than one angle of income is a reality. What most of our youth and even seniors, who are actively seeking more income, fail to understand is that juggling three or four very different and smaller careers is the new way of making a living.
I was very sad to hear that two South African matriculants committed suicide this week, because of their matric results. Our matric pass-rate has also dropped in 2017.
So many students and so many people are looking for work and businesses just cannot accommodate it. It is very depressing.
Closing off on this part of the subject, I want to make a repeated request to be invited to help implement some relevant technologies and guidelines to being an entrepreneur into our South African school syllabus. I have a few exceptional people in mind that can help me share tips and good practices on the positive influences of technology and how easy it is to become an entrepreneur with students.
These two ‘subjects’ will have a far better influence on students than many other subjects.
So, moving onto the Digital Revolution and how it is going to make things worse!
The job market in South Africa is not as flexible as you might think and simply cannot absorb much in terms of disruptions.
This is because we have a few key industries offering sustainable jobs; many of which are at risk by the Digital Revolution.
You know a market is vulnerable when fifteen companies only are responsible for one million jobs.
Scarier than that: If you actually count the number of companies listed in the image it amounts to 27. So someone made an error?
One tenth of all our jobs come from a handful of companies. The risk that comes with this sort of situation is that the job market could crash if a few of these industries were to suffer at the same time. The Digital Revolution creates this exact scenario.
The industries employing most of South Africa’s workforce are as follows—in no particular order:
You do not have to spend much time on Google to gain an understanding of what problems some of these industries are facing in South Africa. Most report little to no growth and just about all are either expecting to or have had their operations reduced in one way or another. I could spend a lot of time writing about some very scary facts about our economy, but I am not going to. What I will say is that South Africa is wobbling at the edge of a cliff. There are so many challenges, and one cannot avoid the fact that there just isn’t enough work in our overregulated labour market.
It is important to look at some examples.
Let’s quickly look at two stronger economies, USA and Canada. One research article reported that they had lost 5.6 million jobs over one decade because robots are replacing humans in factories. That is a huge loss in one industry alone. For context, there are about 9 million jobs in all of South Africa’s industries.
Let’s look at another one.
The Automotive Industry:
Now, I attend a few of these events each year for a number of reasons. I also spend New Year’s with someone who works in the UK and in this industry. The company he is aligned with is migrating their operations away from having car dealerships entirely. The entire industry is shifting away from ownership deals to leasing or rentals. Many industries are moving from ownership models to subscription or leasing models.
This has always been a big interest of mine. In South Africa the general consensus is that this industry will grow steadily. I think the returns we get from tourism could be shared a bit more if we were to create an SMME ethos of trusted service providers. I could write a lot about this, but will leave this for a future article.
Who likes money!
The last major industry I give an example of cannot avoid job losses.
The entire banking industry and insurance sector will be the most revolutionized, and South Africa will have to follow trend or be left in what will be the new Stone Age. It is going to happen, and middle men and women are going to become near extinct.
Several other service based industries will also suffer. Most of which are linked to sales and customer-care, transport, shipping, logistics, healthcare and, interestingly enough, legal support staff.
Let’s take a quick look at some of the warriors of the Digital Revolution:
You know it’s bad when Bill Gates has proposed that robots be taxed…
A futuristic hotel chain employs robotic staff that will carry guests' luggage, deliver laundry, clean the rooms and make coffee.
Aeon Co. is a major Japanese retailer that introduced a four-foot-tall, yellow and white robot at a store in 2008, whose job is to babysit children while the adults shop.
Spread's robot lettuce farmers — Harvests 30,000 lettuce heads every day.
The UCSF Medical Centre recently launched an automated, robotics-controlled pharmacy at two UCSF hospitals.
Amazon AMZN, +2.23% of warehouses, many of your packages may have been handled not by people, but by robots.
Want to see them at work?
There are hundreds and thousands of these robots around the world, and you need to consider that most of the Digital Revolution force are not even a physical robot.
It is digital.
One video I watched did an interesting comparison. They discussed that if the Internet were a country it would be bigger than Spain. The sector, as an industry, is bigger than energy or even agriculture.
Want to see how much your job is at risk?
I love this website: http://www.bbc.com/news/technology-34066941
Type in your job title and it will tell you when you need to prepare to pack your stuff!
It would not be harmful to consider starting your own company, joining the Clergy or perhaps become a physician or surgeon. According to my research these positions are the least likely to ever be replaced. However, you’d probably be safe in a government job as well.
Not all my research suggested doom and gloom, and if you are to believe the Internet, you can believe that for every job that has been lost, 2.6 jobs have been gained. The standard of living is growing worldwide with the maturity of the Internet. Businesses using the Internet tend to grow twice as fast or export twice the rate.
Time will tell.
I believe that no matter what Analysts write, South Africa stands to struggle and will lose jobs to automation and the digital revolution. This is because we are too busy with our political fuss to pay attention to the opportunities here today, to create work during this revolution.
I fear that by the time the powers that be come to terms with this movement, they will overreact and move to over legislate, which will further slow down our progress and economy, leading to even more job losses.
Published January 2018