28th January, 2016
By Oluwagbenga Oyebanji
The first industrial revolution started in Britain in the mid 1700s and it was the foundation of industrialization. The era in which we are now will bring high uncertainty to most developing economies. The Middle-East and Africa have the highest youth unemployment rate in the world. The world of artificial intelligence, robotics and big data analytics could widen the gap due to technological changes.
The history of industrial revolution started with steam power and water to automate production, the second was electricity and assembly line automation, the third was computer and information technology to automate production. The internet is the cornerstone of the fourth industrial revolution called “internet of things.” The fourth industrial revolution will be shaped by fresh wave of innovation in areas like smart machines, autonomous cars, materials that are lighter and tougher and manufacturing model built around 3D printing.
According to Klaus Schwab, the convener of World Economic Forum in Davos, he compared Detroit in 1990 to Silicon Valley in 2014. In 1990 the three biggest automobile companies in Detroit had a market capitalization of( $36 billion), revenues of ($250 billion) and 1.2 million employees. In 2014, the three biggest technology companies in Silicon Valley had higher market capitalization ($1.09trn) generated ($247Billion) but with about ten times fewer employees of 137,000.
The underdeveloped and developing economies would be affected the most; the industrial revolution 4.0 is expected to affect 49% of America’s workforce. Technological changes bring with it pros and cons, ups and downs, lows and highs. The New Deal of Frank Delano Roosevelt after the Great Depression brought about state welfares and social safety net which was the peak of democratic standard in the 20th century. This new revolution is about to make labour and trade unions irrelevant, big government spending on recurrent expenditure lessen. Davos, Switzerland has brought a new discourse into the policy and political space. The winner in the debate that has brought many fears to politicians is an ‘Entrepreneur’. That is why policy makers must be thinking about building an ‘Entrepreneurial Economy’.
Nigeria as a country must be positioned to benefit from the revolution. The government should move quickly with all sincerity to revitalize the education industry, because that is where the positioning starts. Policy should be made to invest more in STEM education. The government should be the driver of this policy; all the tiers of government should invest 20% of their budget in projects that have technology outlook. 20% of government’s budget must be spent on R & D (research and development) for ten years consistently. This policy must be seconded by a bill which will become an Act in all the 36 states, with Abuja inclusive.
The truth revolution 4.0 brings is that more administrative jobs will be lost, more routine jobs will be lost, monetary policy is about getting redundant because entrepreneurs will focus decision making on performance and result. Business as usual is dead, god fathers will go into extinction, but Nigeria as a nation will come out stronger because of the high concentration of young people in the demography. It is easy for young people learn new skills; the government should give much priority to building an entrepreneurial economy.
It is reported that Europe will spend over $100 billion on research and development yearly to catch up with America. “Which way Nigeria?” The way out is to learn from Switzerland which with urgency rolled a policy to attract tech start-ups starting from July 2016 providing financial resources and incentives for start-ups. They designed a policy called KICKSTART ACCELERATOR which will attract start-ups from around the world to live and work in Zurich and they will get ($24,000) in seed funding and ($1,500) for living expenses. This concept will allow for innovation and technology transfer to Swiss nationals. Nigeria is really behind in innovation and technological race; politicians must realize the reality of our limitations and decide where the country will be heading in the next ten years.
Technological policy has to be structured in five verticals: education, health, manufacturing and transport, agriculture and information. These are where most disruptions in the 21st century innovation will take place; government needs to build a hub where start-ups all over the world will come and birth there innovative ideas. We can take a cue from America with the concept called the “American Dream” to lure start-ups; this concept will create more jobs and more wealth into the economy. Skill deficiency is a deficit in all aspects of Nigeria’s economy.
Seventy-five percent of our population were given birth to after Biafra war in 1970, which is a sign of strength. The government needs policies in areas of our strength, areas where we have competitive advantage, and that is mass young population which have desire for technological advancement. The internet and telecommunication revolution of third industrial age helped Nigeria to increase our GDP and consumer spending. The fourth industrial revolution will likewise be to our benefit.
Nigeria has the potential to be great. What we need is political will and commitment from the government and our politicians. Perception is still the greatest problem we have, seeing the cup half full is better than half empty. The fourth industrial revolution will help Africans more because Nigeria has the fastest telecommunication growth in Africa and the world- 95 million lines in 15 years. This revolution is to our advantage. With the right mindset and positioning we will benefit from this revolution. God bless Nigeria.
“The labour of our heroes past shall never be in vain.”
—Oyebanji is Entrepreneurship consultant/ Editor-in-chief of SuccessPointMagazine. Tel:07035458475; E-mail:siemmag@gmail Twitter: @Oluwagbenga6