Why digitization is essential to bolster recovery

By Phyllis Wakiaga

Looking back to March last year, when the World Health Organization declared COVID-19 a pandemic, most of us never imagined the extent to which the virus would impact us. 

Suddenly, our lives changed as measures to promote social distancing and restrict movement, including curfews and lockdowns, were put in place.

Whilst every crisis poses a challenge, it also presents a myriad of opportunities for us all to leverage. This is best explained by President Obama’s Chief of Staff, Rahm Emanuel’s statement, “You never let a serious crisis go to waste. And what I mean by that, it’s an opportunity to do things you think you could not do before.”

One of the greatest opportunities presented by the pandemic has been the rapid adoption of digital technologies by manufacturers in Kenya among other businesses.

Before the pandemic, the world was positioning itself for the Fourth Industrial Revolution (Industry 4.0) demonstrated through the increased use of digital technologies at all points along the global value chains, from design of products, automation in production and e-commerce in retail.

Previous industrial revolutions were inspired by the need to fulfil upcoming needs – mass production and high-speed, and bulk movement of people and goods. The necessity for these drove people to imagine, inspire and innovate. This led to mechanized processes in various fields, including agriculture, transport, and manufacturing. 

The benefits of the Industrial Revolutions were tremendous! The improvements led to higher standards of living which brought about a longer life expectancy, as a result of enhanced food production, better housing and increased access to clothing and consumer goods due to reduced prices.

Industry 4.0 has the potential to fill gaps arising from COVID-19 related disruptions, by ensuring continuity, reducing costs while increasing output.

The pandemic has resulted in profound change. This includes non-essential employees working remotely, academic institutions utilizing online platforms for learning purposes, automation of some manufacturing processes to manage the reduced number of shifts at factories and increase productivity, and the uptake of e-commerce by businesses to reach consumers, amongst others.

For us to fully capitalize on these new digital technologies, the following critical aspects are requisite.

First, increasing productivity gains from the use of digital technologies across the value chain through efficiencies generated is key for transforming Africa’s manufacturing sector and boosting productive employment. Hence, the development of targeted and appropriate policies can help manufacturing industries leverage the Fourth Industrial Revolution. Identifying the right mix of policies will enable industries to maximize the benefits of an increasingly digitalized global economy and adequately address the resulting challenges.

Second, investment in digital infrastructure is capital intensive. Strengthening infrastructure deployment through public and private financing and improving framework policies to foster financing of these infrastructures will go a long way in promoting the uptake of new digital technologies.

Third, human capital. Amid the many opportunities associated with the use of digital technologies in the manufacturing sector, impact on labour remains a major concern. The deployment of digital technologies and robotics in the manufacturing sector will destroy many jobs at the same time, create new jobs in the sector such as production and supply of parts for the new machines among others. We, therefore, need policies that encourage industries to invest in their workers to meet industrial skills demand. On the other hand, higher learning institutions should be equipped with modern machinery to provide students with the skills needed.

Lastly, security remains a major concern for many industries in the wake of digitization. Security arrangements will be crucial in protecting industries against deliberate acts of data misuse. These include strategies, conditions, laws and regulations for all stakeholders to manage digital security risk to economic and social activities, and to foster trust and confidence in the digital environment.

The COVID-19 pandemic should inspire us to strongly consider and hasten our taking up of Industry 4.0. Digitization should no longer be a goal but a requirement.

The writer is the CEO of Kenya Association of Manufacturers and the Global Compact Network Kenya Board Chair. She can be reached at ceo@kam.co.ke.