Creating a platform for economic development

25th September 2019

The Role of SEZs in the 4IR

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AUTONOMOUS ROBOTS• 59% of US manufacturers use robots and their cost is

decreasing and efficiencies increasing• Robots can now sense human presence and work

alongside people• The intelligence/sensors allows for parts to be placed

correctly 100% of the time and errors to be detected and automatically corrected once detected

• Robots are not exclusive to manufacturing and have now entered into; catering, secretarial services, administration, technical jobs and skilled trades

• Robots can lay 1000 bricks per hour, provide patient care, cook gourmet food and answer phone calls

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CYBER SECURITY• All companies need to ensure they have protection

for their ICT systems as cyberattacks are on the increase

• Hardware, software and company/customer information is critical to protect

AUGMENTED REALITY• This product brings technology and the real world

together• Computer generated imagery is superimposed on

top of what a person sees via certain devices• This system is being used for maintenance, training,

manufacturing and more recently in sales, marketing and product support

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INTERNET OF THINGS• Machines are generating, capturing, analyzing and

acting on data• Machine to machine communication is happening

where efficiencies are further enhanced autonomously

SYSTEM INTEGRATION• Vertical systems creates silos in companies• Horizontal systems create specialized sub-systems• The integration of these systems allows for business

to increase capabilities, speeds, efficiencies and reduction of costs and wastage

• A business that sells a product can now utilize one system to; process the order, create the invoice, ship the product and receive the payment

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SIMULATION• Behaviours and functions in an actual business

environment can be simulated• A virtual model allows you to optimize and practice

on a system to analyse, test and predict various outcomes

• This allows for performance to remain unhindered • Healthcare use it to predict outcomes of certain

treatments, life threatening training can also take place in a “virtual” system, like electrical simulation, heavy machinery, chemical work, etc

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BIG DATA• Large data sets allow for businesses to monitor their

operations on a micro scale which can drastically increase efficiencies in operations

• Big data is a catalyst for the 4th Industrial Revolution and offers deep insight into business

• Macy’s utilizes big data to facilitate real-time price adjustments according to stock levels and customer demands

• Walmart use big data and semantic data (allowing machines to interpret information) to interrogate search results by finding synonyms for searched words. Their sales were boosted by 10-15% by serving users with similar products to their initial search

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ADDITIVE MANUFACTURING

• This type of manufacturing, also called 3D printing, allows for unique, customizable and scalable products to be produced quickly, on-site and cost effectively

• Transportation and low raw material costs allow for cost saving

• General Motors 3D print one of their model’s floor console and front seat back panels via this process. Apart from cost savings, the lighter weight of the printed parts allow for increased fuel efficiency

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CLOUD COMPUTING• This allows for devices to access or process data on

demand• Information is stored in the cloud which allows for

powerful computation and communication, allowing machines to remain light weight and cost effective

• Machines can be controlled remotely through networks, which allows for global access and this allows for decisions to be reached at a quicker pace

WHY SHOULD

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WE BECONCERNED?• Sensors, machines, tools and IT systems are

connecting to value chains to interact with each other • The 4th Industrial Revolution will enable faster, more

flexible and higher efficiency• Productivity is going to increase• Higher skilled people will benefit but unskilled

members may loose their jobs

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CHALLENGESVS OPPORTUNITIES

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Challenges• Africa holds a lack of ICT infrastructure and a largely unskilled

workforce

• This revolution can raise income and improve the quality of life but this may be for certain economies and population groups which may increase disparity

• Automation will replace certain jobs but new jobs will be created which are safer than existing ones and more rewarding

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Opportunities• With the challenges, Africa could leapfrog the market as Western

Nations have invested large funds into cumbersome technology which has now become redundant. They will therefore be reluctant to abandon this investment and more averse to further capital spending

• The youth need to be equipped with creative, technology and foundational skills instead of the traditional knowledge systems

• Africa must find new ways to develop technology and not be a tech importer

• Technological innovation will change the supply side of business. Transport and communication costs will decrease and supply chains will become more effective as well as open to new markets

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SHIFTS IN THEJOB MARKET

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SHIFTS IN THE JOB MARKET

• The services sector could be replaced by autonomous intelligence systems

• Human interaction is however preferred over machines, so menial jobs will be automated whilst creative jobs that require human interaction will increase in demand, especially with longer life expectancies

• Existing staff must be retained and re-trained to allow for technological changes to be accepted and to ensure job security is engrained. The new concept of “continuous uptraining” has arisen

• Jobs are also being created in technologically mature countries but the product is consumed far from this originating area. Think of Google Maps which is not creating jobs in SA and has in fact reduced jobs in the map printing sector. Same with Uber removing jobs from the metered taxi sector.

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JOBS UNDER THREAT

• There are 500 000 mining jobs in South Africa highly prone to automation

• Although union driven economies may be tempted to resist this change, competition, globalization and increased efficiencies will just erode FDI, slow economic growth and increase unemployment

• The answer is to rather provide “continuous uptraining” and aggressively adopt new technology moves

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JOBS UNDER THREAT

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DIGITAL DISRUPTION

Small and Medium Size Business• Business needs to merge operational and information systems by

implementing automation and data integration• Business models, existing definitions and best practice models will be

reinvented and adapted• A successful business needs to embrace diversification and must push

traditional industry boundaries• Business must be multi-skilled with customers being able to access a wide

range of goods and services• The easier it is for a customer to access your product the better• Business agility is key• Business needs to provide solutions which society is concerned about• There will be fewer barriers to entry and commercialization and competition

will therefore increase. Business needs to stand out from the competitors• Creative, innovative, simple and efficient ways to use technology to fufil

customer needs is essential• Business must enhance and customize its good and services

IMPLICATION FOR BUSINESS & GOVERNMENT

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DIGITAL DISRUPTION

Government• Citizens are more easily able to communicate with government as physical,

digital and biological worlds converge• Government too has new options to monitor and control populations via

access to data • The ability of government to adapt to the digital world will largely determine

their viability and survival• Public policy is based on the 2nd Industrial Revolution principle of a top-down

approach in linear fashion• The 4th Industrial Revolution however dictates a need for an agile government

with no linear functions which cause cumbersome blockages • Governments are finding that they need to adapt very quickly and reinvent

themselves. They need to truly understand what they are actually regulating• Government is needing to collaborate with business and civil society much

more

IMPLICATION FOR BUSINESS & GOVERNMENT - cont

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HOW TO MITIGATE RISK

• Listen to the changing customer or citizen demands and understand their needs

• Explore and experiment with AI, 3D printers, IoT, Cloud, Robots and new tech• Small to medium size business will soon be able to compete with global

companies as tech allows barriers to fall• Business and Government must remain educated and technological

advancement and skills development must be continuous (don’t only focus on investing in equipment, but also people)

• Government must put the following into place:• Select an appropriate business model• Build a technological foundation• Build an appropriate organizational structure and capability• Develop partnerships in the digital world • Participate and shape technological standardisation

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THE REQUIRED ABILITIES OF DISRUPTIVE LEADERS

• A leapfrog mindset • Boundary pushing• Adaptive planning• Break the rule and write new ones• Open minded• Decisive

WHAT THE ELIDZ

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IS STARTING TO IMAGINE

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SMART PARK RELEVANCE FOR THE ELIDZ

• ELIDZ benefits include:– Cost savings and new revenue streams

– Control for IDZ (asset management) and its tenants (enhanced transparency and customer satisfaction)

– Risk mitigation

– Environmental impact (monitoring, sustainability practices)

– Future proofing for digital disruption and spatial planning implications Attraction of new sector developments such as Autonomous Vehicles (AV’s)

– Increased innovation, entrepreneurship and community engagement

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Enabling Infrastructure

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ELIDZ Planned Response

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Initial site location for consolidated Hub

BPO and Call Centre

Document Storage Facility

Datacentres

BPO FACILITY

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DOCUMENT STORAGE FACILITY

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CARRIER HOTEL & PHASED DATA CENTRE

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BENEFITS FOR BUSINESS AND OPPORTUNITIES• Skills Training and Development

• Recruitment with access to “uptrained” and skilled staff

• Reduced ICT services and costs of doing business

• Improved access to innovation and design

• Reduced reliance on traditional infrastructure and systems

• Increased local spend within BCMM area

• New industry growth, eg. Film and television, banking, ICT hardware and software supply, blockchain, robotics, gaming, and much much more

• Research and Development including prototyping

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THANK YOUFOR MORE INFORMATION CONTACT:

Dr Chris Ettmayr – T: +27 43 702 8200 | chris@elidz.co.za

www.elidz.co.za