It is not every day that I find myself agreeing with trade unions. Following President Cyril Ramaphosa's state of the nation address, trade union federation Cosatu issued its traditional response. Although the statement unsurprisingly contained absurd proposals such as slapping a 10% "punitive tax" on all businesses that refused to invest their cash reserves in the economy, there was one good point it made.
"The federation is not convinced that business or government is properly preparing for both the opportunities and the dangers of the fourth industrial revolution to workers' jobs. The location of the presidential fourth industrial revolution commission in the department of communications compounds our fears. What is needed is a comprehensive plan for the entire economy as it does not impact upon communications only, but in fact the entire economy and society."
A few hours after this statement, news broke that Africa's No 1 pay-TV operator, MultiChoice, was planning to shed more than 2,000 jobs over the next two months. To be fair, the company had warned the market that "it might have to cut jobs as its customers abandon call centres and other traditional contact centres for digital services".
If MultiChoice knew this more than two years ago, how, then, were the 2,000 employees now facing retrenchment prepared for this? If it knew that call-centre volumes were falling and fewer customers were driving to their walk-in centres, what did it do to prepare its staff for this trend? It would be useful if the company could share its journey to this point of considering retrenchments, if only for unions to understand its position better and for other companies to learn lessons.
Whichever way you look at this, though, Cosatu is correct. We are not prepared for this digital economy. We keep talking about the need to create more jobs, but we haven't adequately understood the risk of losing jobs in the digital world.
What is clear is that the only people who will survive, and even thrive, in this new normal are those who garner the skills demanded by the digital economy. Ask anyone who has tried to build a piece of software for their business or even taken on a small digital task such as rendering a 3D image and you will hear stories of how countries such as India can do it better, faster and cheaper than SA. The trick here is skills. We have no chance of winning this battle unless we find ways to upskill our workforce in the expertise commanded by the digital economy. MultiChoice customers will continue demanding digital services. Instead of bemoaning the loss of jobs at its more manual service centres, it ought to be training the same workforce in supporting its digital support services.
It would be interesting to find out if MultiChoice uses local developers and technology to provide its digital solutions, or whether it exports jobs by using developers in other jurisdictions where the price point is more compelling and skills availability more readily available. After all, the company is not a charity. It must maximise shareholder value in an industry where technological advancement is a key competitive edge.
MultiChoice will take comfort in knowing that it is not alone in shedding jobs in the media industry. This week, I read that the US media industry is facing its worst year for job layoffs in a decade. The cause? A consumer demanding digital news for free, a business model forced to rely on advertising revenue as paywall strategies fail, and advertising revenue that is dominated by Facebook and Google.
Perhaps in these times of slow economic growth, the focus shouldn't only be on creating jobs. Perhaps we should first think about protecting the ones we have.
This article first appeared in the Business Times section of The Sunday Times on 07 July 2019.