The Future of the Chemical Industry in the 4th Industrial Revolution
The 4th Industrial Revolution, otherwise called Industry 4.0, cannot become a reality without the chemical industry considering that the sophisticated gadgets that carry the binary codes in the Digital Age all rely on this industry one way or another.
The parts and casings required for manufacturing robots, computers, smartphones, fibre cables, and virtually every other tech-component needed to take the Digital Age from wishes and plans into the real world all come from one form of chemical process or another.
In effect, the chemical industry is a major player in the 4IR.
Some of the advanced materials developed from chemical molecules and processes form the bulk of raw materials needed for drones, wearable devices, and electric vehicles. These materials are now, on their own, a billion-dollar industry.
For instance, the flexible display market (comprising TV, Virtual Reality, and wearable devices) made from barrier films, transparent conductors, and other related materials, is projected to be worth as much as $18 billion.
Similarly, the drone market which relies on high-grade plastics, composites and battery technology for its manufacture, is projected to be worth $14.9 billion in 2020.
The story is the same with integrated circuits and boards, smartphones and tablets, as well as 5G technology, among others.
These sub-industries all require various – and enormous volumes of – chemical products like substrate, yield enhancers, dielectrics, photoresists, ultra-pure glasses colloidal silica, and more complex chemical products in the manufacturing process.
The market is vast, and the opportunities are endless!
What does the future of the chemical industry hold for South Africa?
South Africa is, unquestionably, the largest producer of chemical products on the African continent and has a large share of the market – barring competition from China, a cheaper source of chemical products.
In any case, the rapid changes occasioned by the 4th Industrial Revolution has exposed the underbelly of the South African chemical industry, a significant threat that can be turned into opportunities if appropriately harnessed.
It has become evident, then, that unless the industry strategically positions itself and innovate accordingly, the rapid digital transformation unfolding at the moment will result in an immense shift in the chemical market that will see South Africa struggling at the losing end.
It is no coincidence that among the top 12 countries producing and exporting the most quantities of chemical products to the rest of the world, nine belong to the G-20 group of nations and six of these nine possess nuclear capabilities.
The verdict is clear; to be a top chemical producer and exporter, South Africa must invest more in science and technology, ramp up its industrial development initiatives, and push more capital into the local chemical industry.
Furthermore, the prohibitive cost of accessing and benefiting from the full value the internet offers is a notable setback in South Africa.
Advanced digital technologies such as machine learning, big data analytics, virtual reality-enabled automation and robotics, as well as the Industrial Internet of Things all depend on super-fast and affordable internet access – conditions that are not yet in place.
Another big challenge is the departure of skilled hands from the country.
This massive emigration has led to brain-drain, a situation where the country’s best and brightest chemical engineers (as well as related skilled talents) emigrate to seek greener pastures.
This mass-exodus of highly skilled people can easily be traced to unfavourable labour laws, high cost of utilities, job insecurity, and high taxation – all of which the government can quickly solve if/when they decide to intervene actively.
The government can also intervene to restrict chemical products importation by tightening some laws and regulations. It will not be a bad idea if the government reduces the tax burden of chemical-producing companies considering the impact their survival has on the economy – and jobs.
Ultimately, the rot and corruption in (the tender and contract procedures in) South Africa’s chemical industry must be eliminated quickly too.
It’s not all doom and gloom, though; with the arrival of the 4th Industrial Revolution comes many opportunities for players in South Africa’s chemical industry.
First and foremost, this is the time to upskill every worker in the sector – from the laboratory to management, sales, and supply chain, among others.
Whether she holds a PhD in Chemical Engineering, or he is a trainee in the procurement department, workers in the industry need to start changing their understanding and responses to changes in the workplace.
The chemical industry now requires people that can adapt and flow with the impending changes the 4IR unleashes on the world, people that think holistically – even if they are specialists in micro-fields.
This need to adjust becomes more critical, given the fact that the Digital Age will (mostly) reward people with flexible and adaptable skills as against those seeking permanent employment.
The second most significant opportunity in view is the possibilities a divestment into biotech can provide synthetic or molecular chemical-producing companies.
Just as conservationists acknowledge the mighty Congo rainforest as one of the most extensive forests in the world, so are many other places in Africa – South Africa inclusive – revered as hotspots for biodiversity.
This uniqueness gives the continent a cardinal advantage in the area of creating biochemicals to satiate the needs of local and international businesses.
Tapping into this waiting opportunity then becomes even more critical considering the continuously expanding list of banned chemicals in South Africa – and elsewhere in the world.
It may look expensive to put in place at the beginning, but having a thriving biotech industry gives the country an edge.
With such a comparative advantage, manufacturing companies in different sectors can begin to imprint binary codes into biochemical molecules that will combine electronic, mechanical, and human inputs in the production of robotics or mechatronics.
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Conclusion – the way forward for the chemical industry
Since leading conservation scientists all over the world have concluded, and rightly so, that biodegradability is a crucial and far-reaching issue that will determine how sustainable the Earth will be, producing molecular chemicals and their by-products are becoming more unfriendly.
The solution lies in biotechnology!*
To enhance national/regional security, boost trade advantage, and to secure an increased share of global chemical sales, Africa must tap into its comparative advantage – biotech!
African nations must begin to invest more in research and development into all areas of biotechnology, and, at the same time, train the next generation of chemical scientists accordingly.
This way, South Africa (and Africa in general) can avoid the insecurity and civil strife that follow the extraction of molecules from naturally-occurring minerals which miners extract from the Earth’s belly.
Choosing to produce biochemicals instead of synthetic molecules means leaving fewer (or no) harmful chemical footprints in the sourcing and manufacturing processes of these much-needed industrial inputs.
The time is now for chemical producing companies to, among other things, prepare for the 4IR in terms of skills-impact, training of lab scientists, C-suite executives, and employees at the factory floor.
This moment in time is also ideal to begin educating and engaging with trade and labour unions, policymakers, and academic institutions to close the skills gap and, in turn, produce more Digital Age-compliant workers for the chemical industry and the society in general.
*Being outcome of a panel discussion on The Future of the Chemical Industry in the 4th Industrial Revolution held at Regenesys Business School, Sandton Johannesburg on the 15th of August 2019.
The Panel comprised of Industry Subject-Matter Experts, Executives from the Chemical Industry, the Academia, and the Public.
The Panelists included:
- Clive Govender, MD, Rolfes Chemicals
- Hugo Basson, Managing Director, CHEM SYSTEMS
- Jomein Stemmet, Business Relationship Manager, HYCHEM
- Burt Rodrigues, CEO, BIODX
- Sharmila Govind, HR Head Market Area Africa, BASF
- Llewellyn Hunter, HR Manager, Emerging Africa, AFROX
- Samantha Hughes, Managing Director, CRODA Africa
- Kedibone Moroane, Executive Manager: Research and Skills Planning, Chemical Industries Education and Training Authority (CHIETA)