Financial Planning

Business owners – particularly women – need to prepare for the 4IR

By: Business Partners Limited

Sub-Saharan Africa’s future prosperity hinges on inclusive, sustainable growth at a time of rapid transformation in the Fourth Industrial Revolution (4IR) – this was the main message at the 28th World Economic Forum on Africa themed Shaping inclusive growth and shared futures in the 4IR, that took place in Cape Town last week. One can’t help but wonder if South African business owners, particularly its women, are sufficiently prepared to take advantage of the 4IR.

It might turn out to be one of history’s unfair coincidences that just as women finally make inroads into the last industries still dominated by men, the disruptive 4IR throws a curveball.  Then again, it might just create the environment in which women are finally able to take an equal place alongside men, no matter which industry.

This is according to Gugu Mjadu, executive general manager for marketing at Business Partners Limited, who notes that because the 4IR promises to be so disruptive, the outcomes are virtually unknowable. “The impact of 4IR technologies such as artificial intelligence, advanced biotechnology and the internet of things (IOT) is bound to be greater and faster than any technological development that has come before.

“However, if history is anything to go by, the wielders of these new technologies will emerge dominant, and the reality is that they are still overwhelmingly male,” says Mjadu, who highlights that women remain underrepresented among the engineers, IT specialists, scientists and entrepreneurs who are leading the coming 4IR wave.

“At the core of the imbalance is the fact that the STEM skill sets that will reign supreme in the coming years – science, technology, engineering and mathematics – are still mostly pursued by men, despite continued gains made by women in these fields in recent decades.”

In addition to encouraging greater uptake by and support to females in these fields, Mjadu believes that it is time for an urgent wake-up call for all South African small and medium business owners – male and female – to better prepare for the technologically-driven future. She refers to a recent set of results from the Business Partners Limited’s SME Index, where 80% of respondents acknowledged that they will need to invest in automation or other advanced technologies such as artificial intelligence (AI), however 67% of respondents also indicated that the evolution of such technology has not yet contributed to the growth of their businesses.

“We are clearly underprepared and the problem at hand is complicated,” says Mjadu. “South African labour costs are relatively cheap, which means manual production usually wins over automation when a business owner calculates whether to adopt new technology or not.

“At the same time, however, the pressure on business margins slowly increases from competing products that are made cheaper overseas because of automation, or from the disappearance of entire markets because of disintermediation,” she explains.

This, according to Mjadu, means that by the time local businesses acknowledge the fact that they have to adopt the new technology in order to remain competitive, they have fallen into financial trouble, which makes it very difficult to raise the finance needed to automate or to change the direction of the business.

The answer clearly lies in preparing for coming changes, which is easier said than done, she says. “If the outcomes of the 4IR are difficult to predict, how can one prepare for them? Early adoption of new technology is not always the answer, because many of the new systems are technological dead-ends that don’t live up to the hype with which they emerge from Silicon Valley.”

As such, Mjadu believes that the best approach is to remain in touch with changes in the industry, not only locally, but also overseas. “Fortunately, the internet has made it easier than ever to do this. Business owners should constantly explore options, reskill themselves and their workers, and hire young staff who are open to learning new ways of doing things.”

Support and finance are available, she adds. “It is wise to opt for investors who can add value beyond just the finance. Business Partners Limited, for example provides interest-free technical assistance loans for client businesses, which can be used to make process improvements and technological changes within the business.

“The 4IR is set to change the world as we know it, in ways that we don’t, but at least one fact remains:  there will be many business opportunities for those who take an entrepreneurial approach to the changing world. The key is to make handsets and data affordable for all to increase access, invest in innovation and to be ready to grab the opportunities when they come,” Mjadu concludes.

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