Trade and Industry Minister Dr Rob Davies is warning that unless South Africa develops an “explicit digital industrial policy” there is no guarantee that the potential benefits of the so-called Fourth Industrial Revolution will outweigh the disadvantages.

South Africa has had an official industrial policy since 2009, but the policy does not fully capture the technological advances that are disrupting primary, secondary and service sectors internationally.

Speaking at a digital industrial policy colloquium in Pretoria, hosted by the Industrial Development Think Tank (IDTT), Davies said digital technologies were transforming all industries, from farming to manufacturing. In addition, digital platform companies, such as Amazon and Alibaba, were beginning to dominate value chains.

The Minister pointed to the potential for productivity and competitiveness gains, as well as the fact that some of the new technologies were lowering barriers to entry for small businesses and entrepreneurs.

However, he also highlighted potential pitfalls, including job losses, the accentuation of skills deficits and the potential for digital platforms to further accelerate premature deindustrialisation by undermining the effectiveness of industrial support instruments, such as tariffs and localisation.

Established domestic manufacturing industries could also be “left behind” in the event that they did not adapt to technological shifts. Here, Davies made specific reference to the domestic automotive sector, which could become vulnerable as the internal combustion engine was increasingly replaced by electric vehicles.

“There are a number of people around, either free-market fundamentalists, or ‘techie wow-wows’, who will tell us that every industrial revolution has winners and losers, but that, in the end, there were more winners. I don’t think we can take it for granted that that is going to be the case; we are actually going to have work to make sure it happens in an inclusive way.”

Davies said South Africa’s digital industrial policy would obviously have to focus on improving digital literacy and digital skills, as well as lowering the cost of data and improving broadband penetration.

However, it would also need to grapple with an appropriate regulatory regime that enables the digital transition, but did not undermine other industrial policy levers such as protection of industries, localisation and competition enforcement.

Centre for Competition, Regulation and Economic Development head Professor Simon Roberts said the IDTT colloquium, which has drawn in international and domestic policy experts, was part of several processes under way in South Africa to help create the policy and regulation that were appropriate to the Fourth Industrial Revolution.

“Currently, we’ve got regulation from the twentieth century . . . and we don’t have regulators that are set up to regulate platforms.”

Roberts also stressed the transversal nature of the changes under way, arguing that digital industrial policy could not be the preserve of a single department and had to be integrated across all of government.

“This needs to be a national strategy,” he said, noting that coalitions would be required to build the domestic capabilities required to improve South Africa’s overall competitiveness.