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SA digitally ahead, but behind on growth

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Although South Africa’s digital economy makes it a standout among its emerging market peers, the country’s digital adoption has not yet translated into industrial growth, according to a Accenture and Gordon Institute of Business Science whitepaper.

According to the report, South Africa ranks ahead of India, Brazil, and Russia on digital competitiveness based on its strengths in areas such as technology skills, research and development expenditure, access to capital, regulatory frameworks, innovation ecosystems and ICT exports. The country now needs to embrace digital technologies to reinvent how its industrial sector operates and re-ignite economic growth.

The report surveyed senior executives from leading South African companies in manufacturing and production sectors, who formed part of the larger global survey group of 1,000 decision makers spanning over 20 countries. “Our study shows that decision makers are hungry for digital adoption,” says Yusof Seedat, Director at Accenture Research. “This potent mix of digital maturity and executive desire isn’t delivering expected results in terms of economic growth.”

“What is most troubling is the performance of South Africa’s manufacturing sector, where growth has been flat for a decade and negative for three consecutive quarters, falling an average of 3.3% beginning the third quarter of 2016, and expanded marginally (by 1.5%) in Q2 of 2017. This stagnation has both economic and policy implications, given the role of manufacturing in the government’s plans for economic transformation and job creation,” says Seedat.

South African companies also tend to mimic digital strategies of large industrial nations which prevents them from contextualising digital strategies to their own industrial reality and as a result, often fail to customise their offerings to meet rapidly changing customer expectations.

Moving forward, the report shows that for South African companies to generate the improvements that will enable them to leapfrog to digital leadership, companies must reinvent their operating models completely and rethink production and value chains. To succeed, companies need to move to what Accenture calls Industry X.0, which is the full digital reinvention of how companies and industries work by leveraging the combinatorial powers of digital. “Companies must reimagine and rebuild their businesses as smart, connected, living and learning entities to digitally reinvent their industry.” highlights Seedat.

With relative ease, industrial companies in South Africa can now adopt a mix of advanced digital technologies such as artificial intelligence, 3D printing, blockchain, and big data analytics to create hyper-personalized experiences, new levels of efficiency and build new sources of growth.  To facilitate this change, the report highlights the following six digital imperatives that need to be addressed by South African companies in order to become Industry X.0 businesses:

  • Transform the core. Companies need to build their core engineering and production systems around digital technologies that drive new levels of efficiency. They need to ensure that physical machines and software systems are synchronised to unlock previously-unseen cost efficiencies—thus driving up investment capacity.
  • Focus on customer experiences and outcomes. Local companies should invest in creating hyper-personalised experience for customers using multiple “smart” touchpoints. This helps grow core businesses by enhancing customer engagement.
  • Innovate business models. Industry X.0 companies ideate and create new business models to drive differentiated value for their clients and new revenue streams for themselves. Such companies inculcate an innovation mindset across the organisation, allowing every employee to contribute ideas towards enhancing customer experience.
  • Build a digital-ready workforce. Industry X.0 companies recruit, train, and retain talent with skills for the digital enterprise and encourage collaboration between people and machines. Digital skills are not limited to knowledge of using digital tools or software programs, but also includes intuitive knowhow of how to apply those tools to solve real business problems.
  • Build new ecosystems. Companies need to build an ecosystem of suppliers, distributors, start-ups, and customers, which will allow them to scale new business models rapidly. Large industrial companies must assume a collaborative approach to innovation. Despite their size and technological prowess, they must act with empathy and allow creative freedom to smaller ecosystem partners.
  • Pivot wisely. Industry X.0 companies are moving into the future, but as they do so, they carefully balance investment and resource allocation between the core business and new businesses to synchronise innovation and growth.

To succeed as digital enterprises, companies must look beyond traditional productivity and efficiency measures, and identify new ones that make the most of the big data and advanced analytics capabilities available to them. In Industry X.0 organisations performance metrics should measure the abilities of digital technology as well as the digital workforce to improve both the top and bottom line.

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Smart home arrives in SA

The smart home is no longer a distant vision confined to advanced economies, writes ARTHUR GOLDSTUCK.

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The smart home is a wonderful vision for controlling every aspect of one’s living environment via remote control, apps and sensors. But, because it is both complex and expensive, there has been little appetite for it in South Africa.

The two main routes for smart home installation are both fraught with peril – financial and technical.

The first is to call on a specialist installation company. Surprisingly, there are many in South Africa. Google “smart home” +”South Africa”, and thousands of results appear. The problem is that, because the industry is so new, few have built up solid track records and reputations. Costs vary wildly, few standards exist, and the cost of after-sales service will turn out to be more important than the upfront price.

The second route is to assemble the components of a smart home, and attempt self-installation. For the non-technical, this is often a non-starter. Not only does one need a fairly good knowledge of Wi-Fi configuration, but also a broad understanding of the Internet of Things (IoT) – the ability for devices to sense their environment, connect to each other, and share information.

The good news, though, is that it is getting easier and more cost effective all the time.

My first efforts in this direction started a few years ago with finding smart plugs on Amazon.com. These are power adaptors that turn regular sockets into “smart sockets” by adding Wi-Fi and an on-off switch, among other. A smart lightbulb was sourced from Gearbest in China. At the time, these were the cheapest and most basic elements for a starter smart home environment.

Via a smartphone app, the light could be switched on from the other side of the world. It sounds trivial and silly, but on such basic functions the future is slowly built.

Fast forward a year or two, and these components are available from hundreds of outlets, they have plummeted in cost, and the range of options is bewildering. That, of course, makes the quest even more bewildering. Who can be trusted for quality, fulfilment and after-sales support? Which products will be obsolete in the next year or two as technology advances even more rapidly?

These are some of the challenges that a leading South African technology distributor, Syntech, decided to address in adding smart home products to its portfolio. It selected LifeSmart, a global brand with proven expertise in both IoT and smart home products.

Equally significantly, LifeSmart combines IoT with artificial intelligence and machine learning, meaning that the devices “learn” the best ways of connecting, sharing and integrating new elements. Because they all fall under the same brand, they are designed to integrate with the LifeSmart app, which is available for Android and iOS phones, as well as Android TV.

Click here to read about how LifeSmart makes installing smart home devices easier.

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Matrics must prepare for AI

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students writing a test

By Vian Chinner, CEO and founder of Xineoh.

Many in the matric class of 2018 are currently weighing up their options for the future. With the country’s high unemployment rate casting a shadow on their opportunities, these future jobseekers have been encouraged to look into which skills are required by the market, tailoring their occupational training to align with demand and thereby improving their chances of finding a job, writes Vian Chinner – a South African innovator, data scientist and CEO of the machine learning company specialising in consumer behaviour prediction, Xineoh.

With rapid innovation and development in the field of artificial intelligence (AI), all careers – including high-demand professions like engineers, teachers and electricians – will look significantly different in the years to come.

Notably, the third wave of internet connectivity, whereby our physical world begins to merge with that of the internet, is upon us. This is evident in how widespread AI is being implemented across industries as well as in our homes with the use of automation solutions and bots like Siri, Google Assistant, Alexa and Microsoft’s Cortana. So much data is collected from the physical world every day and AI makes sense of it all.

Not only do new industries related to technology like AI open new career paths, such as those specialising in data science, but it will also modify those which already exist. 

So, what should matriculants be considering when deciding what route to take?

For highly academic individuals, who are exceptionally strong in mathematics, data science is definitely the way to go. There is, and will continue to be, massive demand internationally as well as locally, with Element-AI noting that there are only between 0 and 100 data scientists in South Africa, with the true number being closer to 0.

In terms of getting a foot in the door to become a successful data scientist, practical experience, working with an AI-focused business, is essential. Students should consider getting an internship while they are studying or going straight into an internship, learning on the job and taking specialist online courses from institutions like Stanford University and MIT as they go.

This career path is, however, limited to the highly academic and mathematically gifted, but the technology is inevitably going to overlap with all other professions and so, those who are looking to begin their careers should take note of which skills will be in demand in future, versus which will be made redundant by AI.

In the next few years, technicians who are able to install and maintain new technology will be highly sought after. On the other hand, many entry level jobs will likely be taken care of by AI – from the slicing and dicing currently done by assistant chefs, to the laying of bricks by labourers in the building sector.

As a rule, students should be looking at the skills required for the job one step up from an entry level position and working towards developing these. Those training to be journalists, for instance, should work towards the skill level of an editor and a bookkeeping trainee, the role of financial consultant.

This also means that new workforce entrants should be prepared to walk into a more demanding role, with more responsibility, than perhaps previously anticipated and that the country’s education and training system should adapt to the shift in required skills.

The matric classes of 2018 have completed their schooling in the information age and we should be equipping them, and future generations, for the future market – AI is central to this.

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