The 1st quarter would likely be a disaster, with corruption and SOEs taking some time longer to sort out. Eskom’s challenges would remain a growth inhibitor too, he said. In industries such as mining, Schüssler expects a continuing drop in employment figures for the next two years– partly due to automation, but mainly due to the fact that commodities markets had changed and Eskom was not performing well at all.
He did not expect South Africa’s gold and platinum sectors to return to being the GDP contributor they were in the 1970s and 1980s.
However, he was cautiously optimistic about South Africa’s growth prospects: “I think we can expect to start seeing growth after a few quarters. We’re probably over the worst, and by 2021/22 we could be back at 3% GDP growth,” he said.
To help spur this growth, the country needed to be tougher on crime and labour protests, and ease tax and legislation that hampered small business growth. “A profit motive is what enables businesses to grow – if a business doesn’t make a profit it simply can’t create jobs. So the government needs to reduce the risks of business investment and reduce the red tape in the way of small business growth,” he said.
For industry, the hope of a return to growth means this is the time to start thinking ahead to Fourth Industrial Automation technologies and the broader ecosystem, he said.
Schüssler said the Fourth Industrial Revolution (4IR) era extends far beyond technologies, and signals a shift from commodities-based economies and manual labour, to services-driven economies. “The 4IR is also mainly a services revolution,” he said. “It’s not just about industry, but also how you sell things, transport things and more - it’s a services thing.”
Changes wrought by this revolution included a significant increase in the number of people working in services and a drop in the number of people working in manual labour intensive industries. “In the past 27 years alone, the number of people employed in agriculture has dropped from 44% to 28% globally, yet agricultural output has increased. Meanwhile, the number of service workers has increased from 31% to 49%.”
“The 4IR is personalised, serviced-driven and even recycled, so the economic focus is no longer only on commodities,” he said.
