4IR in West Africa: What business owners need to know

While small and medium business (SMB) owners in West Africa have seen the terms, ‘Fourth Industrial Revolution’ and ‘Industry 4.0’, or ‘4IR’ in the headlines and on the Internet, many assume that this trend will only affect larger businesses. Nothing could be further from the truth – the next wave of digital technology will be as meaningful and important to SMBs as the mobile phone and the Internet.

Let’s quickly recap what the history of the other three industrial revolutions before looking at the fourth:

• The first industrial revolution in around 1785 was about using steam- and water-powered machines to mass-produce goods.
• The second industrial revolution in the late 1800s was triggered by electrification and the expansion of rail, telegraph and telephone.
• Next was the third industrial revolution, the age of the transistor and microprocessor – the birth of the computer age.

The fourth industrial revolution builds on the third industrial revolution by building a bridge between computers and machines in factories, shops, plants and other environments. Triggered by dramatic advances in connectivity and software, the 4IR joins together the physical and digital worlds.

This 4IR is driven by connected devices and sensors (the so-called ‘Internet of Things’), cloud computing, advanced robotics, intelligent software, artificial intelligence (AI), 3D printing, virtual and augmented reality, and a range of other technologies. Just like the previous three industrial revolutions, the outcome will see greater automation, higher productivity and lower costs.

Making tech more affordable
One of the characteristics of the 4IR is the accessibility and affordability of the technology, even to SMBs. For example, we are seeing 3D printers and advanced robots starting to come to market that allow small factories to economically produce small runs of customised products such as machine spares.

And that means smaller businesses can now compete more effectively and efficiently with larger companies. This parallels what we saw unfold with the rise of cloud computing. Previously, small factories found it expensive and complex to implement an enterprise resource planning (ERP) system. But with cloud-based and software-as-a-service business solutions, this technology has become much more accessible.

As we saw at the recent World Economic Forum (WEF) gathering in Cape Town, South Africa, the question that often arises in discussions about the 4IR in Africa is: “What impact will higher levels of automation have on jobs?” A further implied question is whether it is wise to rush to implement tools and technologies that might displace human employment.

Freedom from manual work
We take the view that the new industrial revolution – like the three before it – will free humans from a lot of tedious manual work. But this does not mean that there will be fewer jobs – instead, it means that people can focus on what humans do best and leave the dangerous, boring or routine work to the machines.

For example, AI-powered chatbots on a website will be able to handle many common customer queries and requests. That frees people to focus on problem solving, strategy and relationships – and it also lets a small business improve its service game without needing a massive call centre. This can help the small business to scale up, grow and globalise.

We believe the 4IR will hold many great opportunities for innovative SMBs. To thrive, business owners will need to keep up to date with new developments, retraining employees and motivating them and encouraging them through the uncertainty that always comes with change. Customer behaviour, supply chains and more will change in unpredictable ways.

The business owners and managers who succeed in the next wave of change will be those who are getting ready for a vastly different world. They are investing in technical skills and helping their people to reskill themselves to work with AI and machines. The road ahead will be exciting and challenging. We are only at the start of the massive transformation that digital technology will bring to the world.

By Abiola Adegbite, Senior Sales Director West Africa at Sage