Digital Transformation in The Business Environment

DIGITAL TRANSFORMATION
IN THE BUSINESS ENVIRONMENT
Module Guide
Copyright© 2021
MANCOSA
All rights reserved, no part of this book may be reproduced in any form or by any means, including photocopying machines,
without the written permission of the publisher. Please report all errors and omissions to the following email address:
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This Module Guide,
Digital Transformation in the Business Environment (NQF level 5)
will be used across the following programmes:
 Higher Certificate in Social Media and Communication

 Higher Certificate in Public Management (20 Credits)
 Higher Certificate in Digital Marketing
Note
Unit 1 to 6 to be covered for the above 20 Credit programmes.
 Higher Certificate in Business Management

 Higher Certificate in Information Technology
 Higher Certificate in Tax Administration
 Bachelor of Business Administration
 Bachelor of Public Administration
(15 Credits)
 Bachelor of Commerce in Supply Chain Management
 Bachelor of Commerce in Accounting
 Bachelor of Commerce in International Business
 Bachelor of Commerce in Human Resource Management
 Bachelor of Commerce in Marketing Management
 Bachelor of Commerce in Project Management
 Bachelor of Commerce in Tourism and Hospitality Management
 Bachelor of Commerce in Corporate Communication
Note
- Units 1, 3, 4, 5 and 6 to be covered for 15 Credit Modules. Unit 2 is to be excluded.
DIGITAL TRANSFORMATION
IN THE BUSINESS ENVIRONMENT
Preface.................................................................................................................................................................... 4
Unit 1: Industrial Revolution and Automation ........................................................................................................ 11
Unit 2: Evolution of Artificial Intelligence ............................................................................................................... 35
Unit 3: Emerging Technologies ............................................................................................................................. 64
Unit 4: The 4TH Industrial Revolution and Artificial Intelligence in the Real World. ................................................ 82
Unit 5: The Future of the Job Market in the World .............................................................................................. 108
Unit 6: Social and Ethical Considerations ........................................................................................................... 131
Answers to Revision Questions .......................................................................................................................... 157
References.......................................................................................................................................................... 162
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Digital Transformation in the Business Environment
List of Contents
List of Figures
Figure 1.1, The Manor with strips of land on which peasants lived (Gluckman, 2018) ..................................... 14
Figure 1.2, The first Industrial Revolution \ ....................................................................................................... 15
Figure 1.3, The steam engine ........................................................................................................................... 16
Figure 1.4, The Second and Third Revolutions contrasted ............................................................................... 21
Figure 1.5, The industrial revolutions ................................................................................................................ 25
Figure 2.1, The founding members of AI .......................................................................................................... 40
Figure 2.2, A timeline of the major developments in AI..................................................................................... 41
Figure 2.3, Example of a neural network .......................................................................................................... 42
Figure 2.4, reCAPTCHA, .................................................................................................................................. 43
Figure 2.5, Word cloud common concepts associated with AI .......................................................................... 44
Figure 2.6, What does a beautiful baby look like Google .................................................................................. 45
Figure 2.7, Illustration 1 of machine learning .................................................................................................... 50
Figure 2.8, Illustration 2 of machine learning .................................................................................................... 50
Figure 2.9, AI, Machine Learning and Deep Learning ...................................................................................... 52
Figure 4.1, Companies in Silicon Valley ........................................................................................................... 86
Figure 4.2, Silicon Valley (A Centre of Innovation and Technology) ................................................................. 87
Figure 4.3, Collaborative robots ........................................................................................................................ 92
Figure 4.4: Self-adapting assembly line ............................................................................................................ 93
Figure 5.1, The Shaduf ................................................................................................................................... 111
Figure 5.2: A dishwasher ................................................................................................................................ 112
Figure 5.3: Major changes experienced in the content of jobs due to technology prior to the 21st century ..... 113
Figure 5.4, A typewriter (Peters, 2017) .......................................................................................................... 114
Figure 5.5: Growing skills................................................................................................................................ 123
Figure 5.6, Emerging and declining roles, ...................................................................................................... 124
Figure 6.1, Societal levels at which AI risk occur ............................................................................................ 136
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Figure 6.2, A picture of Joy Buolamwini behind the white mask ..................................................................... 137
Figure 6.3, Racial bias and gender bias examples in the COMPAS AI system .............................................. 138
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Preface
A. Welcome
Dear Student
It is with great pleasure that we welcome you to Digital Transformation in the Business Environment (DTBE5).
To make sure that you share our passion about this area of study, we encourage you to read this overview
thoroughly. Refer to it as often as you need to, since it will certainly make studying this module a lot easier. The
intention of this module guide is to develop both your confidence and proficiency in this module.
The field of Digital Transformation in the Business Environment is extremely dynamic and challenging. The
learning content, activities and self- study questions contained in this guide will therefore provide you with
opportunities to explore the latest developments in this field and help you to discover the field of Digital
Transformation in the Business Environment as it is practiced today.
This is a distance-learning module. Since you do not have a tutor standing next to you while you study, you need
to apply self-discipline. You will have the opportunity to collaborate with each other via social media tools. Your
study skills will include self-direction and responsibility. However, you will gain a lot from the experience. These
study skills will contribute to your life skills, which will help you to succeed in all areas of life.
We hope you enjoy the module.
MANCOSA does not own or purport to own, unless explicitly stated otherwise, any intellectual property rights in or
to multimedia used or provided in this module guide. Such multimedia is copyrighted by the respective creators
thereto and used by MANCOSA for educational purposes only. Should you wish to use copyrighted material from
this guide for purposes of your own that extend beyond fair dealing/use, you must obtain permission from the
copyright owner.
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B. Module Overview
This Digital Transformation in the Business Environment Module is based on the concept of Digitalisation and the
Fourth Industrial Revolution. The Fourth Industrial Revolution will have a massive impact on the workforce and it
is envisaged that this module, Digital Transformation in the Business Environment, will provide the student with
the knowledge and skills to embrace the inevitable transformation caused by digital devices and their evolution.
Digitalisation is not limited to just certain aspects or functions within business. It has a significant impact on the
entire organisational functions and workforce. In some studies, it has been indicated that up to 40% of jobs will
disappear by 2030. Educational Institutions are also challenged with rebuilding the educational systems in order
to meet the standard of the future. In this module, the focus will on the technical and business challenges, as well
as opportunities brought by the rapid advancement of digital technologies.
C. Learning Outcomes and Associated Assessment Criteria of the Module
LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE MODULE
 Develop an understanding of digital  An industrial revolution is used to describe its key

transformation features to bring an understanding of what it entails
 Earlier industrial revolutions before are described to
develop an understanding of the progression over time
 Unique features of Fourth Industrial Revolution are
demonstrated to understand its differentiating features
with previous revolutions
 Advantages and Disadvantages of the Fourth Industrial
Revolution are discussed and evaluated to understand
the complexities of this Industrial Revolution
 Discuss the technical and business  Societal Challenges, in areas such as procurement,
challenges as well as opportunities logistics, finance, human resources, and marketing are
brought by the rapid transformation of investigated to understand the impacts of artificial
digital technologies intelligence on the business and real life situations.
 Potential solutions that new technologies could provide
are evaluated to highlight and create an understanding of
the opportunities available
 Potential limitations of such solutions is identified and
analysed to understand how they can be overcome.
 Key societal challenges in the world are explored to
identify potential solutions and opportunities that digital
technology can create to resolve these
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 Economical and societal issues in the World are identified

and discussed in a bid to create an understanding of how
digital technology can be used to tackle them
 Understand the implications of digital  Digital transformation positive impact at the workplace in
transformation for the future world of many areas, such as manufacturing, business, supply
work chains, health, education, security will be examined in a
bid to understand and appreciate the role this revolution
plays in work environments
 Use of machines in the previous revolutions is discussed
and evaluated to understand the history of the impact of
industrial revolutions at work places environments
 Ways in which employees must adapt in the work
environment are explored to understand how they can
save jobs or adopt new roles
 Current job functions and features that will be under
threat will be analysed and discussed to foster an
understanding of how humans can empower themselves
and avoid being redundant
 Explain the social and ethical  Risks and potential mitigation steps of the Industrial
considerations of digital transformation Revolution and artificial intelligence, such as
and Artificial Intelligence (AI) cybersecurity, and cyber warfare are described to
enhance awareness of the potential dangers associated
with the use of these technologies.
 Similarities between African challenges and those around
the World, are evaluated to gain an insight into global
best practices
 How the artificial intelligence is limited and how it has
failed in some areas are critically examined in a bid to
create an understanding of how it can be improved and
modified to better it’s application
 Identify and describe the emerging trends  Key technologies during digital transformation are
in digital transformation and its role in examined to understand how they affect different
business challenges for procurement and business functions i.e. finance, human resources,
logistics, finance, human resources and marketing and procurement and logistics.
marketing
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 Costs of the emerging technologies on the institutions are

evaluated to understand how they affect efficiency and
profitability
 Discuss the impact of digital  Effects of the Fourth Industrial Revolution in South Africa
transformation in South Africa are identified and analysed to understand the influence it
has on the society, economy as well as the political and
regulatory environment.
 Leading corporates and initiatives in South Africa and the
World over are discussed to understand their role in
ushering digital transformation
 Comprehend the business challenges  Future job functions and features will be identified and
and the opportunities brought by the analysed to help the students understand the possibilities
rapid transformation and advancement and opportunities the that digital technology brings to the
of digital technologies socioeconomic environment
 Threats created by the advanced technologies are
critically analysed to understand the potential downside of
their use
 Potential solutions in assisting humans with in their
everyday lives during digital transformation will be
discussed and examined in an attempt to develop a
deeper understanding of how lives can potentially be
made simpler and easier in the digital era
D. Learning Outcomes of the Units

You will find the Unit Learning Outcomes on the introductory pages of each Unit in the Module Guide. The Unit
Learning Outcomes lists is an overview of the areas you must demonstrate knowledge in and the practical skills
you must be able to achieve at the end of each Unit lesson in the Module Guide.
E. Acronyms
4IR 4th Industrial Revolution
AI Artificial Intelligence
ML Machine Learning
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F. How to Use this Module?

This Module Guide was compiled to help you work through your units and textbook for this module, by breaking
your studies into manageable parts. The Module Guide gives you extra theory and explanations where necessary,
and so enables you to get the most from your module.
The purpose of the Module Guide is to allow you the opportunity to integrate the theoretical concepts from the
prescribed textbook and recommended readings. We suggest that you briefly skim read through the entire guide
to get an overview of its contents. At the beginning of each Unit, you will find a list of Learning Outcomes and
Associated Assessment Criteria. This outlines the main points that you should understand when you have
completed the Unit/s. Do not attempt to read and study everything at once. Each study session should be 90
minutes without a break
This module should be studied using the prescribed and recommended textbooks/readings and the relevant
sections of this Module Guide. You must read about the topic that you intend to study in the appropriate section
before you start reading the textbook in detail. Ensure that you make your own notes as you work through both the
textbook and this module. In the event that you do not have the prescribed and recommended textbooks/readings,
you must make use of any other source that deals with the sections in this module. If you want to do further reading,
and want to obtain publications that were used as source documents when we wrote this guide, you should look
at the reference list and the bibliography at the end of the Module Guide. In addition, at the end of each Unit there
may be link to the PowerPoint presentation and other useful reading.
G. Study Material
The study material for this module includes tutorial letters, programme handbook, this Module Guide and a list of
prescribed and recommended textbooks/readings which may be supplemented by additional readings.
H. Prescribed and Recommended Textbook/Readings

There is at least one prescribed and recommended textbooks/readings allocated for the module.
The prescribed and recommended readings/textbooks presents a tremendous amount of material in a simple,
easy-to-learn format. You should read ahead during your course. Make a point of rereading the learning content
in your module textbook. This will increase your retention of important concepts and skills. You may wish to read
more widely than just the Module Guide and the prescribed and recommended textbooks/readings. The
Bibliography and Reference list provides you with additional reading.
The prescribed and recommended textbooks/readings for this module are:

Prescribed Reading/Textbook
 Schwab, K. (2017). The Fourth Industrial Revolution. Currency
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Recommended Readings
 Harari, Y.N. (2018). 21 Lessons for the 21st Century. Random House
 Razi, Z. (2007). Serfdom and freedom in Medieval England: A reply to the revisionists, Past and Present,
Supplement 2, 182-187
 Pabbathi, K.K. (2018). Quick Start Guide to Industry 4.0: One-stop reference guide for Industry 4.0. Kiran
Kumar Pabbathi
 Pereira, A.C. and Romero, F. (2017). A review of the meanings and the implications of the Industry 4.0
concept. Procedia Manufacturing, 13, 1206-1214
I. Special Features
In the Module Guide, you will find the following icons together with a description. These are designed to help you
study. It is imperative that you work through them as they also provide guidelines for examination purposes.
Special Feature Icon Explanation
LEARNING The Learning Outcomes indicate aspects of the particular Unit you
OUTCOMES have to master.
The Associated Assessment Criteria is the evaluation of the students’

ASSOCIATED
understanding which are aligned to the outcomes. The Associated
ASSESSMENT
Assessment Criteria sets the standard for the successful demonstration
CRITERIA
of the understanding of a concept or skill.
A Think Point asks you to stop and think about an issue. Sometimes
THINK POINT you are asked to apply a concept to your own experience or to think of
an example.
You may come across Activities that ask you to carry out specific tasks.
In most cases, there are no right or wrong answers to these activities.
ACTIVITY
The purpose of the activities is to give you an opportunity to apply what
you have learned.
At this point, you should read the references supplied. If you are unable
READINGS to acquire the suggested readings, then you are welcome to consult
any current source that deals with the subject.
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PRACTICAL
Practical Application or Examples will be discussed to enhance
APPLICATION
understanding of this module.
OR EXAMPLES
You may come across Knowledge Check Questions at the end of each
KNOWLEDGE
Unit in the form of Knowledge Check Questions (KCQ’s) that will test
CHECK
your knowledge. You should refer to the Module Guide or your
QUESTIONS
textbook(s) for the answers.
You may come across Revision Questions that test your understanding
REVISION
of what you have learned so far. These may be attempted with the aid
QUESTIONS
of your textbooks, journal articles and Module Guide.
Case Studies are included in different sections in this Module Guide.

CASE STUDY This activity provides students with the opportunity to apply theory to
practice.
You may come across links to Videos Activities as well as instructions

VIDEO ACTIVITY
on activities to attend to after watching the video.
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Unit
1: Industrial Revolution and Automation
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Unit. Learning Outcomes
CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:
1.1 Introduction  Introduce topic areas for the unit.
1.2 Life Before the First Industrial  Understand life before the first industrial revolution
Revolution
1.3 The First Industrial Revolution  Discuss the first industrial revolution
1.4 The Second Industrial  Discuss the second industrial revolution

Revolution
1.5 The Third and Fourth Industrial  Understand the third and fourth industrial revolution
Revolutions
1.6 The Third Industrial Revolution  Discuss the third industrial revolution
1.7 The fourth industrial revolution  Discuss the fourth industrial revolution
1.8 An Outline of the Fourth  Outline the fourth industrial revolution

Industrial Revolutions
1.9 Summary  Summarise topic areas covered in unit.
Prescribed and Recommended Textbooks/Readings
 Schwab, K. (2017). The fourth industrial revolution. Currency
 Razi, Z. (2007). Serfdom and freedom in Medieval England: A reply
to the revisionists, Past and Present, Supplement 2, pn. 182-187
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1.1 Introduction
Unit 1 takes you through the history of the four industrial revolutions, so that you may have a better understanding
of how the Fourth Industrial Revolution developed. Historians believe that we are on the verge of the Fourth
Industrial Revolution, also known as "4IR". However, there is a school of thought that is of the opinion that we are
already going through the Fourth Industrial Revolution. We have already witnessed three Industrial Revolutions
thus far, but before we take a closer look at the aspects of each Industrial Revolution, we need to specify what we
mean by the term “Industrial Revolution.” Briefly, “Industrial Revolution” is a term that describes a transition from
one mode of manufacturing to another. An Industrial Revolution is propelled by transformations in technology,
culture, social organisation and policy (Gluckman, 2018).
Unit 1 will enable you to understand selected critical developments in automation and will encourage you to think
about their implications for manufacturing and the organisation of work.
1.2 Life Before the First Industrial Revolution

To understand what the Industrial Revolution is, we need to start by asking ourselves the following question: What
was life like before the First Industrial Revolution?
Until two centuries ago, people in Europe and other parts of the world lived in an agrarian society. They lived off
the land, using their hands to make clothes, tools, and other things that they needed to get by. Historians use the
term "feudalism" to describe this pre-capitalist order based entirely on agricultural production (Allen, 2009).
Ownership and use of land were at the centre of the social and economic organisation during feudalism. The King
had primary ownership of the land and ordinary people (known as peasants) lived and worked on the land they did
not own. Peasants lived and worked on strips of land in open-field villages but had to comply with some obligations
and restrictions imposed by a few men known as Barons. For many centuries, life remained unchanged for the
peasants (Harley, 2018). People lived and worked in the fields and migration to distant places was very limited.
For example, people rarely left the Manor (depicted below). Social mobility was limited too. There were very few
notable changes in the fortunes of ordinary people. In feudal society, peasants lived practically the same life, year
after year, decade after decade. Under feudalism, a child that was born lived the same life as his grandfather.
Clothing, food and utensils were largely made in the village where everyone lived (Hawken, Lovins and Lovins,
2013)
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1Figure 1.1, The Manor with strips of land on which peasants lived (Gluckman, 2018)
The figure above is an illustration of the Manor. Peasants had access to strips of land for agriculture and residence
on condition that they meet their obligations which included paying tenancy fees for those peasants with “freehold
tenure”, or work for the Baron or Lord of Manor on given days. The Manor house is large and stands out in
comparison to the smaller dwelling units of ordinary people. These ordinary people lived closer to the fields. A few
examples of what the Manor consists of are; grazing lands, woodlands, a bakery, a blacksmith and a church. So,
before the First Industrial Revolution, the feudal or feudal-like system illustrates how people lived and worked (Hill,
2018).
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1.3 The First Industrial Revolution

The result of this Revolution has greatly contributed to globalisation. But, what is globalisation? Globalisation
typically refers to the process by which different economies and societies become more closely integrated (Irani &
Nozuri, 2011). The different Industrial Revolutions throughout time have enabled the movement of people, the
movement of goods and, therefore, the need to have efficiency in manufacturing, and the movement of data and
information. The need to reach different places, different people, and innovate have been factors and precursors
to the different industrial revolutions (Anderson, 2012).
As depicted in the visual below, the machine is being used to make the sickle (a hand-held agricultural tool), as
opposed to people using their hands to make the sickle by using a hammer to bend the metal. This is an example
of automation in the First Industrial Revolution.
2Figure 1.2, The first Industrial Revolution \

(Irani & Nozuri 2011)
In the previous section, we described the way of life before the First Industrial Revolution. But what led to the
Industrial Revolution?
Beginning in the late 1700s, a series of extraordinary technological innovations transformed the handiwork that
people had known for centuries, into mechanised labour. Inventions in the textile industry such as the spinning
jenny, spinning mule, the power loom and the cotton gin increased production because they completed tasks
previously performed by several people, faster and with more accuracy (Allen, 2009). However, the inventions that
made the greatest difference were those machines that harnessed nature’s energy - water, steam, and coal - to
perform even more complex and dangerous tasks that humans could not do. Experts believe that the introduction
of the steam engine was the greatest invention of the time (Hill, 2018).
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3Figure 1.3, The steam engine

(Mitch, 2018)
The steam engine could power different kinds of machines. For the first time, goods produced in one place could
easily be transported to many locations across a vast area. During the First Industrial Revolution, the first railway
lines were built, subsequently expanding at a time when more and more people were living in emerging towns.
Mechanisation not only increased production but also transformed the organisation of work. Manufacturing moved
away from cottages in residential places to large buildings powered by water and steam, known as "factories"
(Hartwell, 2017).
As with subsequent industrial revolutions, the use of certain skills in manufacturing diminished and some skills that
were highly valued before mechanisation became obsolete. Incidences of industrial action by workers whose skills
had become redundant are numerous. In 1783, textile workers attacked the home of John Kay, the inventor of the
Flying Shuttle (a mechanism that minimised the weaver’s movements and increased the width of the fabric). They
were concerned that his invention might take work away from them (Mokyr, 2018). However, while some skills got
replaced by machines, the general standards of living improved due to increasing productivity.
Think point 1.1
In today’s world do Luddites still exist? Do people appreciate the technological

advancements?
Reading
Follow this link to read more about the Flying Shuttle:

http://theinventors.org/library/inventors/blflyingshuttle.htm
16 MANCOSA
1.4 The Second Industrial Revolution

The Second Industrial Revolution builds upon, and is, a continuation of the First Industrial Revolution.
In terms of technologies of production, for example, there was increased automation in the Second Industrial
Revolution. Machines became more powerful and autonomous; they required less human input from the operator
than was possible in the past. Similarly, the invention of the Bessemer process to manufacture steel inexpensively
in 1853 by Henry Bessemer, led to a massive expansion of railway lines (Gluckman, 2018).
Coal, water and steam powered the First Industrial Revolution, whereas the Second Industrial Revolution ran on
the industrialisation of electricity and petroleum. What led to the invention of electricity was the discovery of moving
magnets inside coils of copper wire which could create or “induce” electric current (Hawken, Lovins and Lovins,
2013). This scientific discovery of electromagnetic induction revolutionised how we use energy. A power plant that
uses a fuel source, for example, coal, natural gas, or water, can generate larger currents to power manufacturing
plants, homes, and public places. The internal combustion engine replaced the steam engine and enabled
efficiency. (Anderson, 2012)
Video Activity 1.1:

Click on the link to the video below to answer the question:
https://youtu.be/MqmVtnuslYk
Exactly what was the Second Industrial Revolution and what differentiated it
from The First Industrial Revolution?
We have learned that the advent of the Bessemer process made it cheaper to manufacture steel on a larger scale.
Henry Ford developed a new way of manufacturing vehicles. He introduced the assembly line and standardised
the procedures and techniques of manufacturing cars (Griffin, 2018). More vehicles were manufactured as a result
of the assembly line. The way that Henry Ford manufactured his cars would later be referred to as Fordism.
Undoubtedly, inventions and technological developments in the Second Industrial Revolution made some skills
obsolete as factories became more and more automated (Harley, 2018).
An alternative view is that expansion of commerce through mass production unlocked more jobs in other sectors.
A positive consequence of the Second Industrial Revolution is that cities became cleaner as sewer and water
reticulation systems expanded. However, for many people, everyday life remained nothing less than toil (Harley,
2018).
We have compared the first two Industrial Revolutions based on methods of production, materials, and resources
used in manufacturing, energy and distribution networks, among other things. The predominant business model,
one can argue, was mass production for textiles and steel in the First and Second Industrial Revolution.
MANCOSA 17
Indeed, in the First and Second Industrial Revolutions, making goods consisted of taking many components and
combining them (Ramachandran, 2018). For example, to manufacture a hammer, the manufacturer will have to
make the head of the hammer and the handle of the hammer separately, and then combine the two elements using
a wedge. In the Second Industrial Revolution, mass production was made possible by the standardisation of
production systems, the production assembly, as well as expanded rail transport (Cunningham, 2016).
Knowledge check
Question 1
Match the statement/question to the correct answer
Prompts
I. ____________ refers to any mechanical device performing some tasks without
continuous input from a human operator.
II. Experts believe that the introduction of this was the greatest invention of the time.
III. The process by which different economies and societies become more closely
integrated.
IV. _____________describes a transition from one mode of manufacturing to another.
V. Which revolution ran on the industrialisation of electricity and petroleum?
a) Second Industrial Revolution

b) Steam engine
c) Automation
d) Industrial Revolution
e) Globalisation
Question 2
True/False
Inventions and technological developments in the Second Industrial Revolution made some skills
obsolete as factories became more and more automated.
Question 3
The name of the secret society that destroyed the machines and inventions that had replaced
them as workers is ________.
A. Lutherans
B. Luddites
C. Counter-Industrialists
D. Agrarians
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Question 4
Which industrial revolution was characterised by the mechanisation of manufacturing and the
use of steam and waterpower in manufacturing?
A. First Industrial Revolution
B. Second Industrial Revolution
C. Third Industrial Revolution
D. Fourth Industrial Revolution
Question 5
True/False
The telegraph and the telephone are inventions of the Second Industrial Revolution.
1.5 The Third and Fourth Industrial Revolutions

This section continues to unpack the industrial revolutions. We now shift our focus to the Third and Fourth Industrial
Revolutions. In the First and Second Industrial Revolutions, human labour played a part in production. However,
in this section, we will take a closer look at how computers have taken the centre stage of production in the Third
and Fourth Industrial Revolutions (Gilboy, 2017).
1.6 The Third Industrial Revolution

The Third Industrial Revolution, also known as the “digital revolution”, has introduced a significant shift in the mode
of manufacturing and the use of different digital technologies for home and work environments.
For example, most homes and work environments use security and surveillance gadgets which combine advanced
software and hardware (Morrar, Arman and Mousa, 2017).
Digitalisation is the integration of digital technologies into daily life. The literal definition of digitalisation provides
an apparent notion of a world reliant on technology and development. In this section, digitalisation implies
automation of processes and jobs to make them easier and more accessible. It is also the implementation of digital
technologies to adjust the business model (Gilboy, 2017). The goal is creation of value through the use of
advanced technology by leveraging on the dynamics of digital networks and the enormous digital flow of
information. Put in simple terms digitalisation is a process by which corporations and individuals reorganise their
working methods and strategies in order to achieve better outcomes through the adoption of new technologies
(Hartwell, 2017).
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Video Activity 1.2:

Watch the video below to answer the following question.
https://youtu.be/QDsWWPLaanQ.
What are the advantages and disadvantages of Digital Revolution and
Digitalisation?
As digitalisation advanced during the Third Industrial Revolution, manufacturers did not need to laboriously cut,
bend or carve out something during the process of creation and manufacturing. Instead, they use a new digital
manufacturing technology known as 3D printing technology that deposits material layer by layer in the process of
manufacturing (Mitch, 2018). Business models for production and marketing goods are shifting from an emphasis
on economies of scale – that is, mass-producing goods for a mass market – to making things in smaller quantities
that can be differentiated according to individual preferences. 3D printing has made it possible to design and make
different kinds of goods for different customers. This is also known as "additive manufacturing", 3D printing defies
the logic of economies of scale (Hartwell, 2017).
Prior to digitalised manufacturing, manufacturers designed and produced one product in large quantities in order
to lower the costs associated with design, manufacturing and marketing. The cost of making different goods for
different customers was simply prohibitive. You could not dream of customised manufacturing since the mode of
production was mass production (Colombo, Karnouskos, Kaynak, Shi and Yin, 2017). With additive manufacturing,
however, the cost of setting up the machine is the same when manufacturing one product or one thousand
products. The Third Industrial Revolution has been marked by intensified digitalisation of manufacturing, which
transforms the way goods were made in the past.
A digital design can be tweaked countless times with a few clicks of the computer mouse. Rather than changing
the mechanical equipment in the factory, producers simply change the master software (Gluckman, 2018).
It is true that additive manufacturing technology will need time to perform more complex manufacturing tasks.
Strictly speaking, additive manufacturing has a long way to go before it can replace mass production as a mode of
manufacturing. Nonetheless, producers have already 3D printed iPad covers and some vehicle parts (Fink and
Elisabetta, 2019). Significantly, additive manufacturing, which is a unique feature of the Third Industrial Revolution,
enables individual customised manufacturing. This modular mode of manufacturing has more flexibility than mass
production. Furthermore, it allows for fast feedback due to heightened connectivity among people and smart things,
also known as the Internet of Things (IoT) (Mitch, 2018)
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Video Activity 1.3:

What is the Internet of Things (IoT) and how does it work?
https://youtu.be/QSIPNhOiMoE
Think Point 1.2:

How has the internet of things changed lives?
In you answer think about smart watches, smart TVs and smart refrigerators
Fast feedback implies that goods can be modified quickly to suit the needs of niche markets. This digitalised and
networked manufacturing make it cheaper to respond to shifting local tastes (Popkova, Ragulina and Bogoviz,
2019). In the Third Industrial Revolution, huge amounts of data are created throughout the product life and the
supply chain, and because of this, consumers have more information about a product than ever before. One can
deduce that consumers are more empowered in the Third Industrial Revolution than in the past. This implies that
value creation lies in designing a product that gives consumers the best option (Mitch, 2018).
The figure below distinguishes the Third Industrial Revolution from the Second Industrial Revolution by
demonstrating that the "smart factory" will be used in manufacturing from the Third Industrial Revolution going
forward.
4Figure 1.4, The Second and Third Revolutions contrasted

(The Economist, 2012).
MANCOSA 21
This figure shows the differences between modes of manufacturing in the Second and Third Industrial Revolutions.
Manufacturing in the Second Industrial Revolution (pictured on the left in the figure) involved humans operating
and maintaining machines used in manufacturing. For example, humans were trained to know when to add oil and
what elements to change in order to keep the machine running. In the Third Industrial Revolution (pictured on the
right), manufacturing is controlled by software installed on special kinds of computers. These computers know
when to add oil, increase heat or change an element of the machines. Fewer people are needed to operate
machines in the Third Industrial Revolution (Penprase, 2018).
Activity 1.1
Visit any bank and observe how the use of ATMs changed their service
delivery. Analyse the impact of efficiency their absence would bring.
Practical application 1.1

Consider FNB and Capitec Bank. Analyse their ATM coverage throughout
the country and note how their respective coverage affects their respective
efficiencies.
Another major factor that is a result of the Third Industrial Revolution is the rise of telecommunications, primarily
because of the advent of the internet.
The Third Industrial Revolution would, later on, democratise access to information, which was previously difficult
to access, especially for the public. Before the internet, scientists and researchers, as well as business
professionals had to travel — often out of the country — for computing resources and to collaborate on major
projects. By the early 1980s, an early internet had begun to emerge: a primitive, regional telecommunications
network linking several national laboratories and supercomputing centres that could be accessed only by trained
experts (Griffin, 2018). The introduction of the internet and, consequently, improved telecommunications brings
together people, processes, data, and such to make networked connections more relevant and valuable than ever
before — turning information into actions that create new capabilities, richer experiences, and unprecedented
economic opportunity for businesses, individuals, and countries. Improvements in telecommunications would, later
on, exist outside of business and research (Ramachandran, 2018).
The Third Industrial Revolution holds numerous opportunities for transforming manufacturing and business as we
know it. There is a huge possibility for bringing mass personalised manufacturing closer to the market. Labour
costs are becoming less and less significant in many multi-dollar businesses. Some experts predict that these
changes may see manufacturing returning to richer Western countries (Popkova, Ragulina and Bogoviz, 2019).
22 MANCOSA
Thus far, we have explained that the Third Industrial Revolution has been characterised by a movement from mass
production to digitalised, networked and consumer-driven manufacturing. Let us now move onto understanding the
Fourth Industrial Revolution.
1.7 The fourth industrial revolution

Some experts believe that we are on the cusp of a Fourth Industrial Revolution (4IR). Others believe that the 4IR
is already here. The Fourth Industrial Revolution (4IR) builds upon the Third Industrial Revolution. It makes use of
fast information exchange enabled by the data-centric platforms of the Third Industrial Revolution (Robandi,
Kurniati and Sari, 2019).
In an article entitled, “The Fourth Industrial Revolution: Shaping a New Era”, Philbeck and Davis (2018)
characterise the dependence of the 4IR on the digital foundations of the Third Industrial Revolution as “epi-digital”
to emphasise the idea that the technologies driving change today are predicated upon the digital foundations of
the Third Industrial Revolution (Glen, 2019).
The Fourth Industrial Revolution is characterised by applications of cyber-physical systems in manufacturing and
other domains of economic and social organisation. In simple terms, cyber-physical systems integrate virtuality
and reality. Cyber-physical systems combine cyber components (which include sensing, computation, and human
users) and connects them to the internet and to each other (Lee, Yun, Pyka, Won, Kodama, Schiuma, Park, Jeon,
Park, Jung and Yan, 2018).
Video Activity 1.4

Watch the video to answer the following question: How is the Fourth Industrial
Revolution impacting our lives?
https://youtu.be/kpW9JcWxKq0
Readings
Schwab, K. (2017). The Fourth Industrial Revolution .Currency.
Drivers of 4IR
Enduring technological breakthroughs in the digital, physical and biological domains provide a fundamental
background to the 4IR. We can think of these breakthroughs as "4IR drivers" (Syam and Sharma, 2018).
In the manufacturing sector, the Fourth Industrial Revolution (4IR) runs on intelligent agents or machines equipped
with AI. This has led to smart factories with machine-to-machine automation, whereby autonomous machines can
communicate with each other to optimise outcomes without human interaction. However, the 4IR goes beyond
manufacturing (Syam and Sharma, 2018).
MANCOSA 23
It is the fusion of different technologies and their interaction across digital, physical and biological domains that
distinguishes the 4IR from prior revolutions. Strictly speaking, the 4IR is impacting all aspects of everyday life.
Technologies such as robotics, advanced materials, autonomous vehicles and mobile devices are becoming more
embedded in our physical, social and political spaces, thus changing behaviours. Since the 4IR is impacting on all
aspects of social, economic and political sphere it has ushered in anxieties at individual and societal levels (Morrar,
Arman and Mousa, 2017).
Think point.1 2
What are the major drivers of the 4IR?
Think point.1 3
What are your thoughts about the Fourth Industrial Revolution (4IR)? Are they
mostly positive or negative?
 If positive, what comes to mind specifically?

 If negative, what comes to mind specifically?
Unlike other revolutions where critical developments in technological inventions and application of technology were
concentrated in specific parts of the globe, particularly in Europe and North America, new breakthroughs in the
invention of intelligent agents such as robots are not restricted to the Global North. Interesting developments in the
application of artificial intelligence (AI) are also taking place in China.
Thus, one can say that the Fourth Industrial Revolution can take place anywhere. The rise of intelligent agents
such as robots that can potentially perform all the tasks that humans can perform, begs questions about the future
of work (Colombo, Karnouskos, Kaynak, Shi and Yin, 2017)
Video activity 1.5

Click on the video below to answer the following question:
https://youtu.be/7SfLEiHuzbs
What are the major features of each Industrial Revolution (First, Second,
Third, and Fourth )
24 MANCOSA
1.8 An Outline of the Fourth Industrial Revolutions
5Figure 1.5, The industrial revolutions

(Colombo, Karnouskos, Kaynak, Shi and Yin, 2017)
The figure above is an infographic of the four Industrial Revolutions. It presents the timeframe for each industrial
revolution. According to the infographic, the First Industrial Revolution began in the 1780s, whereas the Fourth
Industrial Revolution is happening now. The infographic also presents the key technological inventions that
characterised each Industrial Revolution (Lee, Yun, Pyka, Won, Kodama, Schiuma, Park, Jeon, Park, Jung and
Yan, 2018). These inventions changed peoples' way of life. The First Industrial Revolution was characterised by
the mechanisation of manufacturing, and the use of steam and waterpower in manufacturing. The Second
Industrial Revolution was characterised by mass production and the use of electricity. What differentiates the Third
Industrial Revolution from the prior Industrial Revolutions is the widespread use of electronic and information and
technology (IT) systems, as well as automation in manufacturing. This is also known as the “digitalisation of
manufacturing” or the digital revolution.
The infographic shows that in the Fourth Industrial Revolution, the digital or cyber systems are being combined
with physical systems. This combination produces intelligent systems or “agents” that can autonomously perform
activities that were previously reserved for humans (Glen, 2019).
MANCOSA 25
1.9 Summary
Before the advent of the First Industrial Revolution society survived using agrarian methods. This included anything
from land ownership so people could farm, and they lived off their land, making their clothes by hand and using
tools and actual physical labour. In the 1700s, we began to see innovations that transform the way people have
worked for centuries into mechanised labour. This means there was introduction of machines and automatic
devices that made tedious work quick and easy to do. The introduction of machines that harnessed and used
nature’s energy such as water, steam and coal were what really set the First Industrial Revolution apart from how
things were previously done. The introduction of the steam engine was considered the greatest invention of the
time. The steam engine could power different kinds of machines, one being a steam locomotive or the steam
engine train, which led to the creation of railway lines and the easy transportation of goods, the emergence of
factories and the expansion and emergence of the modern urban towns. The introduction of mechanisation and
the use of natural energy in the First Industrial Revolution transformed the organisation of work, manufacturing and
increased production. This period also came with certain skills which were valued before the First Industrial
Revolution becoming dispensable and no longer needed and useful. This would be the trend with later industrial
revolutions.
The Second Industrial Revolution is the continuation of the First Industrial Revolution, with its major defining feature
being the introduction of electricity and petroleum. Because of this, there was an increased dependence on
machines which operated at a faster speed and generated more outputs. The introduction of electricity and the
subsequent discovery of electromagnetic induction meant that more power could be generated to power plants,
homes and public places. Large scale production of certain items such as vehicles was introduced. Henry Ford
would be at the forefront of this, to which the way he manufactured his cars would later refer to as “Fordism”. Other
important inventions that come with the Second Industrial Revolution were the telegraph, the telephone and the
radio. This meant faster and more efficient ways to communicate. Just like in the First Industrial Revolution, certain
skills became obsolete during this time, which left some people out of work. However, some argue that the Second
Industrial Revolution unlocked more jobs in other sectors and contributed to cities becoming cleaner as the water
sewer systems expanded.
The Third Industrial Revolution, like the two previous revolutions had a defining feature. Also known as a “digital
revolution”, the defining characteristic of this revolution was a shift to use digital technologies for work and
manufacturing. This period saw a rise in the use of hardware, as well as software technologies in manufacturing
processes. With increased efficiency because of digitisation, companies were able to produce products which were
not necessarily for mass consumption. Although mass production remained, technology such as 3D printing
allowed manufacturers to design and make different goods for different customers.
26 MANCOSA
The Third Industrial Revolution enabled customised manufacturing. In this period, we also see the emergence of
the Internet of Things (IoT). The internet allowed for manufacturers to receive feedback quicker, which meant
goods could be modified quickly to suit the needs of the market. We would see the rise of telecommunications
beyond the phone and a telegram in this period.
The digital revolution would change the course of how business, government, as well as how ordinary people
innovate and manufacture.
The Fourth Industrial Revolution is intertwined with the Third Industrial Revolution to a point where experts cannot
agree whether it has begun or not. The Fourth Industrial Revolution, or 4IR, is dependent on the digital foundations
of the Third Industrial Revolution. The defining characteristics of 4IR is the application of cyber-physical systems
to integrate virtual space and reality and create what is termed “virtual reality”. The technology in this period is able
to connect people and cyber components such as sensing, and computation mediated through the internet like it
has never done before. The technological advances that are able to connect and integrate the digital, the physical,
and the biological domains to each is what makes 4IR what it is. Technology such as robotics, advanced
machinery, autonomous vehicles and mobile devices have become embedded in our physical, social and political
spaces, thus changing behaviours. Science of artificial intelligence and the Fourth Industrial Revolution are part of
our everyday experiences. The Fourth Industrial Revolution building on the eras, is about exploring how intelligent
agents such as robots can potentially perform tasks which were previously set aside for humans, and how humans
can adapt to this in order to avoid becoming obsolete in the workplace.
Readings
For more on the state of peasants during feudalism, read this piece: Razi, Z. (2007).
Serfdom and freedom in Medieval England: A reply to the revisionists, Past and Present,
Supplement 2, 182-187
Knowledge Check Questions

Question 1
Why is the industrial revolution important to history?
A. The inventions of the revolution led up to the inventions of today.
B. Because it made America better than France.
C. It is not historically important.
D. None of the above.
Question 2
The Second Industrial Revolution welcomed the introduction of the internet. True or false?
MANCOSA 27
Question 3
The Fourth Industrial Revolution is____________________.
A. The fusion of many emerging technologies into the physical and biological worlds.
B. About exploring how intelligent agents such as robots can potentially perform tasks
which were previously set aside for humans.
C. Underpinned by these technological breakthroughs: Autonomous cars, 3D printing,
and machine- to-machine automation.
D. All of the above.
Question 4
The Fourth Industrial Revolution is also referred to as "4IR" or "Industry 4.0". True or false?
Question 5
Match the statements below to the correct answer
Prompts
a) Third Industrial Revolution
b) Autonomous
c) Fourth Industrial Revolution
d) 3D printing
e) Cyber-physical systems that integrate virtuality and reality
I. Some experts believe that the___________ is almost here. Some experts believe
that we are already here.
II. Also known as the “digital revolution”.
III. Defining feature of the Fourth Industrial Revolution.
IV. A new digital manufacturing technology (additive manufacturing).
V. ___________machines can communicate with each other to optimise outcomes
without human interaction (smart factories).
Unit 1: Revision questions

 When where the other revolutions?
 What is the potential impact of the 4IR?
28 MANCOSA
Case Study 1.1
From the magazine extract below. How did the Internet of Things (IoT) change the world
from the 3rd to the 4th Industrial Revolution? How do you think this makes the world a better
place compared to the previous revolutions?
Answers to activities
Think point 1.1: In your answer consider the reaction of people to 5G Network
Video Activity 1.1: Exactly what was the Second Industrial Revolution and what differentiated it from The First
The First Industrial Revolution happened from about 1760 to 1830. The methods of production here moved from
hand production to machine powered production. Textiles were mass produced. Power sources were water, coal
and steam. In fact, the steam engine was invented in the First Industrial Revolution by James Watt. Note that all
of these sources of power in these engines were still used during the Second Industrial Revolution but new sources
of power were introduced as well, so there was continuity here between the First and Second Industrial Revolution.
The Second Industrial Revolution just built upon the first and added things to it. Inventions of the First Industrial
Revolution included the spinning jenny, the water frame, the spinning mule and cotton. The standard of living for
the working class was appalling during this time. In Alexis de top Bill's visit to the city of Manchester, he referred
to it as a sewer.
After taking a little break, the Second Industrial Revolution bounces back around 1850 and goes on until 1914.
1914 being the year that World War One started, and as far as the methods of production are concerned, we are
dealing with increased automation that instead of going from just hand to machine power, we are dealing with less
and less human effort required to produce goods and to produce power. What's being mass produced during this
time? Steel. Steel had been produced ever since the middle ages as far as swords and weapons are concerned,
but as far as mass producing steel to where miles and miles of railroad track were laid, that is going to be something
that is unique to the Second Industrial Revolution.
MANCOSA 29
As far as new power sources are concerned there was more use of petroleum and electricity. Even currently most
of the things that we use are powered either by some sort of gasoline, or natural gas, or something close namely
petroleum, fossil fuel or electricity, hence the Second Industrial Revolution brought us into the modern age. The
new engine of the Second Industrial Revolution would be the internal combustion engine, which is the type of
engine that cars or any other kind of vehicles use.
Inventions of the Second Industrial Revolution include automobiles, chemicals, railroads, telegraph telephone and
radio. The difference between the First and the Second Industrial Revolution is thus full automation. There were
many critical inventions in the Second Industrial Revolution. The telegraph, telephone and the radio are some of
them. Experts believe that, notwithstanding these inventions, it is the application of electricity in the industry that
distinguishes the Second Industrial Revolution from its predecessor. Still, others think that a distinguishing feature
of the Second Industrial Revolution is the mass production of various industrial goods.
Video Activity 1.2: What are the advantages and disadvantages of Digital Revolution and Digitalisation?
With the help of digital computers many things are made possible and we are constantly finding better ways to use
the internet. The Internet also introduced new ways of interaction or communication. Not just for the communication
but the Internet has played a substantial role in the expansion of a number of businesses and companies. To reach
the global level there was an extensive requirement for a robust platform so that platform is attained in the form of
the Internet through which people can reach globally for their interests. The Digital Revolution has helped in
transforming the analogue as well as a mechanical technology to the digital technology. Nowadays the use of e-
mail or social media websites is extremely common. People use a number of platforms that are available on the
Internet for their businesses and personal use. There many industries and companies which are exporting and
importing products from across the world. With the help of the Internet many things have become easier such as
the interaction with people who are living thousands of kilometers away from each other. Earlier there were limited
resources for communication such as telegraph or letters but now there are an abundance of options available for
interacting with people from distinct countries. A multitude of companies are reaching the global level from where
it becomes easy to work and provide services to the client. There are many companies which can provide products
as well as services without taking weeks or months. The latest technology assists in the shopping and the delivery
of products, undoubtedly this process has become faster. All of these facilities are rendered because of the
Industrial Revolution that took place as Digitalisation. There is a lengthy history of Digital Revolution and it all
started in the year 1947. Since then many things are started to change and development in the digital form also
started taking place. The Digital Revolution has gone through an extended journey and in between many changes
took place in the world. Earlier there were portable phones which were only used to call and text as this was the
situation before the introduction of pagers. With the introduction of cell phones, people started to take an interest
but the extravagance of same made it inaccessible.
30 MANCOSA
Cell phones were too expensive in the earlier days and not everyone could afford them. In contrast everyone has
a cell phone in today's era. The communication was increased with the introduction of cell phone and after the
genesis of the Internet things changed rapidly. There was also a time when black and white televisions were
famous but now the situation and circumstances are totally different. Now many electronic items and appliances
are available. The variety which can be seen today was not there in the past. Now not just the television or mobile
phones but also the other appliances such as refrigerators or washing machines are becoming more digitalised
than ever. Apart from all the factors of the Digital Revolution it is also important to understand the various
advantages and disadvantages of it. It is a fact that many technologies emerge and many of them also go extinct.
Most of the new technologies that emerge are there to provide better facilities to the users. There is also a case of
the negative impacts of technology which cannot be ignored.
There are a number of advantages of Digital Revolution but there are plenty of disadvantages too. Digital
Revolution has changed the way in which businesses and companies work, and with the help of this productivity
is multiplied. The revolution has helped businesses to reach new heights and many companies gain a lot of
revenues by adopting the most recent technologies. Along with the Internet many other gadgets such as tablets
are bestowed by the Digital Revolution. The communication has made it easier than ever and transparency can
be noticed in different departments of the companies.
The disadvantages like the job redundancies and cyber threats are the unwanted gifts received from the Digital
Revolution. The various demerits are harmful to the children as well as the adults. Apart from the various
advantages, the Digital Revolution has a great significance and a crucial role to play. The revolution has helped in
enhancing and improving the productivity of a number of companies and businesses. Nowadays people have a
great platform with the help of which they can transform their interests into a digital business and get better profits
and revenues. The cloud services are also provided with a Digital Revolution and the latest technology which help
in storing data and accessing any data at any time and any place. The revolution impacts on the personal life and
social life of individuals. The advantages of the new technology can help children to grow but the adverse effects
of the technology can be very harmful to them. Therefore, there is an urgent requirement to understand the
difference between all these good and bad factors and make an efficient use of technology. The utilisation of the
technology in a proper way can be less harmful whereas the exploitation is always dangerous. The distribution has
provided a podium through which people and companies can grow and the businesses can be enhanced.
Video activity 1.3: What is the Internet of Things (IoT) and how does it work?
The Internet of Things is changing much about the world we live in, from the way we drive, to how we make
purchases and even how we get energy for our homes. Sophisticated sensors and chips are embedded in the
physical things that surround us, each transmitting valuable data, data that allows for better understanding of how
these things work individually and together. But how exactly do all these devices share such large quantities of
data and how do we put that information to work.
MANCOSA 31
Whether we are improving the production of a factory, giving city residents real-time updates on where to park or
monitoring our personal health, it’s the common internet platform that brings us diverse information together and
provides the common language for the devices and apps to communicate with each other.
The process starts with the devices themselves, which securely communicate with the Internet of Things platform.
This platform integrates the data from many devices and applies analytics to share the most valuable data with
applications that address industry specific needs. Let’s start with a simple example: a car, after taking a long road
trip Rebecca notices that her check engine light has come on, she knows she needs to have her car be looked by
a mechanic but is not sure whether it is something minor or something that needs an immediate attention. As it
turns out the sensor that triggered Rebecca’s check engine lights monitor the pressure in her brake line, this sensor
is one of many monitoring processes throughout the car which are constantly communicating with each other. A
component in the car called the diagnostic bus gathers the data from all these sensors then passes it to a gateway
in the car. The gateway integrates and sorts the data from the sensors, this way only the most relevant diagnostic
information will be transmitted to the manufacturers platform but before sending this organised data the cars
gateway and platform must first register with each other and confirm a secure communication.
The platform is common in constantly gathering and storing thousands of bits of information from Rebecca’s car
and hundreds of thousands of cars like hers, building a historical record in a secure database. The manufacturers
added rules and logic to the platform, so when Rebecca’s car sends a signal that her brake fluid has dropped
below a recommended level the platform triggers an alert in her car. The manufacturer also uses the platform to
create and manage applications that solves specific issues, in this case the manufacturer can deploy an application
on the platform called the asset management system. This application oversees all of their customers’ cars on the
road as well as all the parts in their warehouses, it uses the data in Rebecca’s car to offer her a potential
appointment time to service her car, directions to the nearest certified dealer and a coupon for the services.
What’s more? The app will ensure that Rebecca’s breaks are covered under her warranty, that the correct
replacement part is ordered and then sent to the dealership so it is ready when she arrives but the manufacturer
analysis does not stop there, they have also deployed a continues engineering application that tracks not only
Rebecca’s car but hundreds of thousands of others looking for ways to improve the design and manufacturing
processes of the car itself. If some problem in her break line crops up in a critical number of other cars the
manufacturer uses applications custom built for the automobile industry to pinpoint the exact problem. They can
see if these cars were made at the same factory, used the same parts or came off the assembly line on the same
day. So, what do all these pieces add up too? Stream lined inventory management for the dealer, a better safer
car from the manufacturer and for Rebecca it means she can be back on the road faster and get where she’s going
safely, all thanks to the Internet of Things.
32 MANCOSA
Activity 1.1: Consider how long the queues will be and how tired and frustrated the tellers would be and the
subsequent mistakes from the frustration.
Practical application 1.1: Use the internet to find out about the current conversation on the topic.
Video Activity 1.4: How is the Fourth Industrial Revolution impacting our lives?
The original industrial revolution was driven by the discovery that you could use steam engines to do all kinds of
interesting things, that was followed by additional revolutions for electricity and computers and communications
technology. We are now in the early stages of the Fourth Industrial Revolution which is bringing together digital,
physical and biological systems. One of the features of this Fourth Industrial Revolution is that it does not change
what we are doing but it changes us, we need a different economic model that will allow us to meet the basic needs
of every human on the planet and that will be focused not on growth per say but on maximising human well-being.
We have energy technologies that can power our civilisation, but how do we get it and implement it at the scale
we need, at a price that people around the world can afford? If we are able to do something to transform cities to
make it more efficient, then the impact can be huge. We can use asset tracking, we can use I.T, we can use 3D
printing to decouple growth from the resource constraints we have. The question of adding quality to quantity, it is
really about the diverse safe healthy and just world of clean air clean water and clean energy.
This ability of digital technology to change outcomes to truly empower people that can create a more equitable
growth. The Fourth Industrial Revolution has the potential to make inequalities visible and to make them less
acceptable in the future. We need to take responsibility at every level of society to adapt to these technological
challenges which are redefining what it means to be completely embedded in this world. Even though we have
everyday problems we have to solve, we have to find a way to lay the foundations for the innovations of tomorrow.
Think point 1.2: consider the below
Think point 1.3: Consider smart phones, smart TVs, Big data, Internet of Things, cellphone banking and how all
these have changed our lives.
MANCOSA 33
Video Activity 1.5: Consider electricity, the ATM, steam engines, steel and the internet. Connect these to the
relevant industrial revolutions.
9.Answers Knowledge checks

1. Automation
Steam engine
Globalisation
Industrial Revolution
Second Industrial Revolution
True
B. Luddites
A. 1st IR
True
A. The inventions of the revolution led up to the inventions of today.
False
D all the above
True
10.
Fourth Industrial Revolution
Third Industrial Revolution
Cyber-physical systems that integrate virtuality and reality
3D printing
Autonomous
Case Study 1.1

Consider how the connectedness of all things makes life easier. Compare the main technologies in the Industrial
Revolutions to one another e.g. Steam engine to electricity to AI
.
34 MANCOSA
Unit
2: Evolution of Artificial Intelligence
MANCOSA 35
Unit Learning Outcomes
2.1 Introduction  Introduce topic areas for the unit
2.2 AI is the New Electricity  Explain why AI is the new electricity
2.3 What is Artificial Intelligence (AI)?  Explain Artificial intelligence
2.4 The Birth of Artificial Intelligence  Discuss the birth of Artificial intelligence
2.5 The Evolution of AI  Interpret the evolution of AI
2.6 Common concepts associated with AI  Summarise the common concepts associated to AI
2.7 Why you should learn about AI basics  Understand why you should learn about AI basics
2.8 What makes humans smart?  Identify what makes humans smart
2.9 Machine Learning  Describe machine learning
2.10 Problems for Which Different Types of  Differentiate between the types of problems machine
Machine Learning Provide Solutions learning can provide solution
2.11 Deep Learning  Understand deep learning
2.12 AI, Machine Learning and Deep Learning  Understand AI, machine learning and deep learning
2.13 Summary  Summarise topic areas covered in unit.

 Schwab, K. 2017. The fourth industrial revolution. Currency
 Chen, B., Wan, J., Shu, L., Li, P., Mukherjee, M. and Yin, B. (2017). Smart
factory of industry 4.0: Key technologies, application case, and challenges. IEEE
Access, 6, pn.6505-6519
 Hozdić, E. (2015). Smart factory for industry 4.0: A review. International Journal
of Modern Manufacturing Technologies, 7(1), pn.28-35
 Jackson, P.C. (2019). Introduction to artificial intelligence. Courier Dover
Publications
 Skilton, M. and Hovsepian, F. (2017). The 4th industrial revolution:
Responding to the impact of artificial intelligence on business. Springer
36 MANCOSA
2.1 Introduction
Unit 2 defines artificial intelligence (AI) and takes you through some of the major historical milestones in AI
research. This unit provides a background to the current surge in AI research and commercialisation by tracing
how AI has evolved to its current state of technological capabilities over many decades.
In this unit, we define AI and trace its development since the late 1940s. We explain the years in AI research which
showed great promise for AI. Before we discuss the development of AI and unpack the terms "artificial" and
"intelligence", we will first take a look at AI as the "new electricity".
The unit introduces you to machine learning, the branch of artificial intelligence that uses data to make different
predictions. You will learn about artificial narrow intelligence (ANI), a term which describes artificial intelligence
techniques in use at present, and you will become aware of artificial general intelligence (AGI), which is the type
of artificial intelligence that is comparable to human intelligence. It will take many decades, even centuries for us
to achieve AGI.
You will also get to know about deep learning, a recent technique in machine learning that has led to numerous
amazing breakthroughs in AI.
2.2 AI is the New Electricity

In Unit 1, we learnt that electricity was the main energy source that transformed manufacturing, social life and
future technological innovations. We learnt that, as electricity became more and more available in many places
(e.g., in manufacturing and in homes), social life and human culture changed in great ways. For example, many
tools, instruments and appliances that use electricity were manufactured, and these changed the way we do things.
Think about the toaster, the fridge, and the electric stove (etc.). All these appliances changed the way we store
and prepare food, and they definitely have an influence on our diet (Morrar, Arman and Mousa, 2017).
Video Activity 2.1

Watch this video to and answer the following questions. How is electricity
making the American home different?
What type of impact did it have on society?
https://www.youtube.com/watch?v=n3M9HKK-onM
MANCOSA 37
According to Andrew (2011) one of the leading AI scientists, AI is the “new electricity” because it will transform all
industries, sectors and virtually all aspects of everyday life in the next several years. What Andrew (2011) meant
is that AI has the power to change our humanity forever. Before we look at the highs (positive milestones in the
development of AI technology) and lows (periods of despair) of the development of AI, we shall begin with a general
discussion of the terms artificial and intelligence, which constitute artificial intelligence (AI) (Li, Hou and Wu, 2017).
2.3 What is Artificial Intelligence (AI)?

Artificial intelligence refers to intelligence that is not human intelligence. The term artificial indicates that a machine
(or a computer program) demonstrates the intelligence we are talking about (Chace, 2018). Because AI is
intelligence that is demonstrated by a machine, some writings use machine intelligence instead of artificial
intelligence (Huang and Rust, 2018).
The pioneers of artificial intelligence were motivated by the prospect of inventing a machine that thinks like a
human. For many people, the computer had the potential of becoming the thinking machine. In fact, the term
machine generally applies to a computer. However, in its broad sense, a machine is any device that was invented
by humans. Software is a set of instructions that tells an electronic signal how to behave inside of a computer. This
means that software instructs a machine, for example, a robot, on how to act in any given environment. A machine
that acts in a given environment is called an agent (Hutson, 2018).
Practical Application 2.1

Google's free service, Google Translate, instantly translates words, phrases,
and web pages between English and over 100 other languages. Type anything
in your language and see if it can translate to the English. Are the results true
Google's free service, Google Translate, instantly translates words, phrases, and web pages between English
and over 100 other languages.
Activity 2.1
Did you know that Google Translate now supports more than 10 African
languages since its new update? This has been tested. While we can see some
of our languages, there are certainly a few languages that are missing. Venda,
for example, is not featured on Google Translate just yet. The Venda translation
for Artificial Intelligence is "vhutali ha khole". Type in google translate and see
the results.
38 MANCOSA
We now know that artificial intelligence refers to a non-human intelligence.

But we have yet to define what is meant by "intelligence".
In Latin, intelligence refers to the faculty of “perception” or “comprehension”.

Nowadays, intelligence means a "set of faculties that enable us to process
information" and establish relationships between different things (or aspects)
in order to arrive at a rational understanding (that we call knowledge) instead
of intuition. Humans are known to be intelligent because they use various types
of information to arrive at a rational understanding (Marwala & Hurwirtz, 2017).
On a cloudy summer day, one might take an umbrella with them in case it rains.
That is an example of a rational decision.
Humans make decisions and take actions even when the information they have
at hand is inaccurate, uncertain and based on incomplete information. Another
aspect of human intelligence is adaptation. Because humans are intelligent
they can understand and adapt to new situations (Došilović, Brčić and Hlupić,
2018). They can quickly understand the changes in the environment and
modify their behaviour accordingly. Being able to learn from experience is
another aspect of human intelligence. Learning increases the probability that
the action taken will be able to realise set objectives in a new situation (Siau
and Wang, 2018). You will learn more about human intelligence later in the
unit.
What is the meaning of intelligence in machines? Machines can now make

decisions based on uncertain information, learn from experience, and pursue
goals in new contexts based on prior learning. However, the capabilities of
machines are still far too inferior to human intelligence. We shall explore these
ideas in more detail in later sections.
Video Activity 2.2

Watch this video to answer the following question: What is Artificial
intelligence?
https://www.youtube.com/watch?v=nASDYRkbQIY
MANCOSA 39
2.4 The Birth of Artificial Intelligence (AI)

Given that we now hear about breakthroughs in AI technology – for example, new developments in intelligent
biometric identification – we might be tempted to think that AI is a recent occurrence. The scientific search for
machines that think has preoccupied researchers since 1943 (or prior to this date).
The year 1956 is an important milestone in the story of AI; this is the year AI was officially born as a field of study. A
small group of computer and research scientists, organised by John McCarthy, including Claude Shannon, Marvin
Minsky, and others (see figure 2.1 below), gathered at Dartmouth College for the first-ever conference to debate
the possibility that machine intelligence could imitate human smarts (Bini, 2018).
6Figure 2.1, The founding members of AI

(Lee, 2018)
After the Dartmouth Conference, two main AI camps emerged applying different techniques, namely the rule-based
camp (expert systems camp) and the neural networks camp (Lee, 2018). The former approach relies on giving
computers a sequence of rules to help it figure out patterns. Despite promising neural networks research in the
1950s and 1960s the expert systems (rule-based) camp successfully argued that neural networks were unreliable
and were of limited use. Yet, the rule-based camp similarly failed to attract interest in the field of AI.
Subsequently, funding for neural networks research diminished in the 1970s. This period is known as the first AI
winter (Ongsulee, 2017).
40 MANCOSA
Practical Application 2.2

Look at the visual above labelled "The founding members of AI". As you can
see, all the individuals pictured in the visual are male.
Research on why Artificial Intelligence has a gender problem
2.5 The Evolution of AI

As you will learn, recent successes of AI are built on earlier ideas, most of which failed to take off due to the
absence of computing power and lots of data. Therefore, even if it was not possible to see a self-driving car until
recently, the ideas were generated several decades ago when important events occurred which will be discussed
in more detail in the next section. For now, refer to the figure 2.2 below which presents a timeline of some of the
major developments in AI.
7Figure 2.2, A timeline of the major developments in AI

(Philbeck and Davis 2018)
One of the earliest AI works was done by scientists, Warren McCullow and Walter Pitts (1943), who proposed a
model of artificial neurons that can be stimulated by surrounding neurons. The artificial neuron emulates biological
neurons such as those found in the human brain.
Biological neurons receive and transmit information to other neurons and enable us to make sense of the world
and to make decisions. The artificial neuron operates in the same way, except that artificial neurons and their
connections to other neurons are mathematical formulae.
MANCOSA 41
Artificial neurons make up a neural network, which is comprised of layers of artificial neurons as depicted in the
figure 2.3 below (Arel, Rose and Karnowski, 2010).
8Figure 2.3, Example of a neural network

(Popenici and Kerr 2017)
Video Activity 2.3

Watch the video below to learn about artificial neurons and their use in neural
networks: What are the artificial neurons and what is their use in neural networks?
https://www.youtube.com/watch?v=gcK_5x2KsLA
The Turing Test

Let us move on to yet another instrumental figure in the development of AI − Alan Turing.
Alan Turing was a codebreaker who deciphered Germany's communication during WWII. He helped Britain win
the war. Although his work was kept a secret for many years, the British government honoured Turing for his
contribution during the war (Wang and Siau, 2019).
Think point 2.1
By 1947, Alan Turing was already giving lectures on AI at the London Mathematical Association and in 1950 he
introduced the widely known Turing Test which a computer must pass if it is “intelligent”.
42 MANCOSA
Think point 2.2
You have probably seen the picture below when trying to post a comment, create an account or purchase
something off the internet.
9Figure 2.4, reCAPTCHA,

(Popenici and Kerr, 2017)
To pass the Turing Test a computer must have competencies that include the following:
 Natural language processing so that it can communicate successfully in English
 Knowledge representation to store the information
 Automated reasoning to utilise the stored information to address questions and generate new conclusions
 Machine learning to autonomously learn from experience, adapt to new situations and identify patterns
 Computer vision to perceive things
 Robotics to control objects and move about (Cockburn, Henderson and Stern, 2018).
These six areas which comprise the Turing Test compose most of AI.
Video activity 2.4

Watch the video below to answer the following question: what exactly is the
Turing Test and what does it mean if a computer passes it?
https://www.cnet.com/videos/what-is-the-turing-test/
MANCOSA 43
2.6 Common concepts associated with AI

The word cloud in figure 2.5 below depicts some of the common concepts associated with AI. You may want to
look these up on the internet during your self-study time and figure out what each of these words means in general
terms.
10Figure 2.5, Word cloud common concepts associated with AI

(Agrawal, Gans and Goldfarb 2019)
As the Unit progresses, we will deal with most of the words in the word cloud. Some of the words seen in the word
cloud include the following: algorithm, data, artificial, intelligence, narrow AI, weak AI, artificial general intelligence,
machine learning, deep learning, neural, network and model.
2.7 Why you should learn about AI basics

Let us start by challenging you. It is a fact that AI will touch just about every industry in Africa, from fishing to
forestry, farming, manufacturing, financial services, you name it! AI will drastically change all the sectors of the
economy and society. After the adoption of AI, there will be significant job loss. AI will drastically reduce new
recruitments in each industry. Yet there are fewer African students with an interest in this game-changing
technology because of lack of exposure to the field of computer science (Siau and Yang, 2017). Africa’s
participation in AI is, so far, rather insignificant. Consider the following-: Tom Ilube, a British entrepreneur, did the
following search on Google: “What does a beautiful baby look like?” (Makridakis, 2017). More than two years later,
we repeated the search and we found more or less the same results in figure 2.6 below:
44 MANCOSA
Google search results for "what does a beautiful baby look like?"
11Figure 2.6, What does a beautiful baby look like Google

(Makridakis, 2017)
Nearly all babies found by the Google Search Engine Were Caucasian babies. Babies with darker, chocolate skin
and curly hair which are the majority in Africa (note that some Africans of European descent are Caucasian) aren’t
represented in the results (Makridakis, 2017). Why? Google Search Engine uses machine learning algorithms (you
will learn about machine learning algorithms in this unit) to give you relevant results.
Tom Ilube thinks that African babies do not appear in the search results of beautiful babies because far fewer
Africans participate in the construction of machine learning algorithms, which you will learn about in this unit. If this
module can ignite a fire in you to pursue artificial intelligence in your future career, you may become one of those
who will shape Africa’s place in the Fourth Industrial Revolution. Keep learning!
MANCOSA 45
Knowledge check 2.1

Question 1
Match the column
Prompts
a) Artificial Intelligence (AI) b) Cognition c) Machine Learning d) (ML) Natural Language
Processing (NLP)
1. The ability to train a system to understand both written text and human speech.
2. In humans, ____________ refers to the mental process of acquiring knowledge and
understanding by way of thought and experience.
3. ______________remains limited in showcasing intelligence as humans do (human
intelligence).
4. ________________ is a type of AI that uses algorithms to enable computers to make
decisions.
Question 2
Humans are smart because they have the ability to ____________________________.
A. Sense, reason and act.
B. Sense, reply and act.
C. Sense, respond and answer.
D. None of the above.
Question 3
Artificial intelligence should be about making intelligent machines that think and act rationally in
a given environment. An intelligent ______________ acts upon the information it senses from
the environment.
A. Animal
B. Agent
C. Human
D. None of the above
Question 4
Which of the below options could be approaches to artificial intelligence?
A. “Strong” artificial intelligence (also known as artificial general intelligence - AGI)
B. “Weak” artificial intelligence (also known as artificial narrow intelligence - ANI)
C. None of the options mentioned
D. A and B could both be approaches to artificial intelligence
46 MANCOSA
Question 5
Machine learning is applied when human expertise is not available. True or false?
Question 6
Machine learning is a subset of artificial intelligence that uses algorithms to enable computers to
make decisions. True or false?
Question 7
Machine learning enables you to give instructions to a computer by programming it with
examples. Humans provide the necessary input for the computer’s learning and improvement.
True or false?
2.8 What makes humans smart?

In this Unit we defined AI simply as "non-human intelligence". We learnt that artificial intelligence is intelligence
which is demonstrated by a machine, rather than a human. At the very least, an intelligent machine should be able
to function intelligently without human intervention (that is, an intelligent system must be able to act independently).
An AI system (or intelligent machine) must be able to perform independently, and emulate the things that humans
do, such as moving fluidly in an environment (unless they have impairments), recognising patterns, colour and
objects as well as maintaining an awareness of their surroundings (Greenman, 2017).
Therefore, it is easier for us to learn about AI in the context of human intelligence
Think point 2.3

Is there a possibility of AI surpassing human intelligence? Watch the trailer of
the movies, I, Robot and A.I Artificial Intelligence, and consider if you think
this could ever be a possibility.
Video activity 2.5

Watch the "I, Robot" movie trailer using the link below
https://www.youtube.com/watch?v=rL6RRIOZyCM
Video activity 2.6

Watch this video and answer the following questions: Why humans are more
intelligent than any other species?
Why humans rule the world? How do humans outperform every other species
regardless of their size or shape?
https://www.youtube.com/watch?v=7kbZPtXhxBE
MANCOSA 47
Think point 2.4
Video activity 2.7

Watch a 5-minute video prepared by Dr Raj Ramesh and answer the following
question: What are the subfields of Artificial Intelligence that match human faculties
and intelligent capabilities?
Https://www.youtube.com/watch?v=2ePf9rue1Ao
2.9 Machine Learning

Machine learning is a type of AI that uses algorithms and data to enable computers to make decisions in real-life
environments without explicit instructions on how to accomplish the task. The two most important aspects of
machine learning are the algorithm and data (Hwang, 2018). Let us start with the data. These data could be any
data such as information about customer preferences collected at a local supermarket or statistics about the
performance of soccer players during a game of football. Or, as we learnt in Unit 2, it can be big data collected
from various devices such as smartphones and sensors as well as the internet.
You might have already figured out that humans find it difficult to understand data because of its sheer volume and
complexity. However, machine learning algorithms like to work with massive amounts of data to generate accurate
outputs (answers to the questions that bother us). Our understanding of machine learning will be incomplete
without learning about algorithms. Algorithms are a set of instructions for a computer on how to interact with,
manipulate, and transform data (Hurwitz & Kirsch, 2018: 28). This definition suggests that algorithms work with
data. In fact, they work with large amounts of data, known as big data, that are incomprehensible to humans. They
learn from data, instead of implementing an explicit computer programme. However, it is important to note that not
all algorithms learn from data; some algorithms learn from interacting with people. Algorithms work with machines
(devices) that can sense their environment (take in inputs from the environment) and make decisions.
An algorithm can learn from experience and can adapt its behaviour to new situations in ways that improve the
achievement of its goals. Behind a single algorithm are engineers, analysts, computer scientists and
mathematicians, all responsible for programming an algorithm (Siau, 2017).
48 MANCOSA
Video activity 2.8

What is an algorithm? Watch the video using the link below, to answer this
question. https://www.youtube.com/watch?v=Da5TOXCwLSg
Video activity 2.9

What is Machine Learning? Watch the video using the link below, to answer
this question.
https://www.youtube.com/watch?v=e_WfC8HwVB8
The videos demonstrate that algorithms are everywhere in our smart devices and algorithms are being used to
improve our experience on the internet. Machine learning algorithms are unique algorithms that repetitively learn
from data to make more accurate predictions in the future. For this reason, machine learning algorithms are often
called "learners".
Think point 2.5
Domingos (2015) observed that while algorithms may seem cryptic and mystical to laypeople, they are answers to
questions that concern us all:
 “How do we learn?
 What can we predict?
 Can we trust what we have learnt?”
MANCOSA 49
12Figure 2.7, Illustration 1 of machine learning

(Domingos, 2015)
Figure 2.7 (Illustration 1) represents machine learning. The data are the inputs, and the answers are the outputs.
In the middle, there is a pile. In it, there is an algorithm.
The humour lies in that the middle part is described as “a pile of algebra”, something that you recall from your math
lessons in high school. In machine learning, the middle part of the cartoon can be understood as a mathematical
model. We can represent machine learning in three parts comprising inputs, model, and output as shown in figure
2.8 below.
13Figure 2.8, Illustration 2 of machine learning

(Domingos, 2015)
50 MANCOSA
We have said machine learning algorithms are learners. But, how do they learn? First, scientists teach them using
data. Scientists call this process training and the data used is known as training data. During training, if results are
incorrect, we send feedback (red arrow) back to the model so that it improves its learning.
This process of feeding back into the model is discussed by the characters in the cartoon (Petropoulos, 2018).
One cartoon character says, “what if the answers are wrong”. The character to your right tells him/her “stir the pile
until they start looking right". The training generates a model that can be used to make predictions based on new
data. After training, a machine learning algorithm ingests (takes in) data and uses iFs existing model to generate
an output or result.
Machine learning is like telling a computer to “have a look at this group of examples of cat images and a number
of examples of dog images, and just figure it out yourself…” Machine learning enables a computer to “programme
itself" and learn how to distinguish a cat from a dog without explicit instructions. In other words, machine learning
lets you programme with examples (Luo, Tong, Fang and Qu, 2019).
2.10 Problems for Which Different Types of Machine Learning Provide Solutions
Fortunately, machine learning is not magic at all. It is a technique in AI that we use to solve many practical
problems. To appreciate machine learning, let us briefly consider the nature of problems that machine learning
solves. Skilton and Hovsepian (2018) describe some of the cases to which machine learning is applied, and these
are simply beyond human competence. For instance, when: Human expertise is not available. Think about the
Mars Exploration Rover that is millions of kilometres away and must make decisions on its own. Humans have no
explanation for their competence: Expertise such as perceptual tasks, natural language, and human vision. The
solution needs to adapt: Different cases of personalisation, such as education and shopping (Tuomi, 2018).
Readings
Skilton, M. and Hovsepian, F., (2018). The 4th Industrial Revolution:
Responding to the impact of Artificial Intelligence on business. Springer
2.11 Deep Learning.

Due to its utility in AI, deep learning is growing fast, and it is important that one distinguishes it from machine
learning. Deep learning is a type of AI that uses neural networks to learn and solve problems. Neural networks
imitate the neural structures of the human brain. However, they contain artificial neurons (which are actually nodes
in a mathematical model) (Harari, 2018).
MANCOSA 51
Video Activity 2.10

Watch this video to understand the differences and similarities between deep
learning and machine learning:
https://www.youtube.com/watch?v=-SgkLEuhfbg
What are the differences and similarities between deep learning and machine
learning? Applications of Deep Learning
To appreciate the utility of deep learning, let us briefly consider some of the applications of deep learning today.
Automated translations did not exist before the addition of deep learning. Image analysis and caption
generation: One of the greatest feats of deep learning is the ability to identify images and generate intelligent
captions for them.
Language identification: At this point, we are looking at a preliminary stage where deep learning machines can
differentiate between different dialects. For example, a machine will make the decision that someone is speaking
in English (Hozdić, 2015).
2.12 AI, Machine Learning and Deep Learning

We now understand that machine learning is a subset of AI, and deep learning is a sub-field of machine learning,
as depicted in figure 9 below.
14Figure 2.9, AI, Machine Learning and Deep Learning

(Skilton and Hovsepian, 2018)
Knowledge of the commonly used concepts and techniques in AI is sufficient to give you a conceptual model of
how AI works in the real world.
52 MANCOSA
Knowledge check 2.2

Question 1
Match the statements below to the correct answer
Prompts
a) Electricity b) Software c) Andrew Ng d) Alan Turing e) Turing Test
A. ______________was the main energy source that transformed manufacturing,
social organisation and future technological innovations.
B. A set of instructions that tells an electronic signal how to behave inside of a computer.
C. A test of a machine's ability to exhibit intelligent behaviour equivalent to, or
indistinguishable, from that of a human.
D. One of the leading AI scientists.
E. Sometimes called the “father of modern computing”.
Question 2
The science and engineering of making "intelligent" machines is called
_______________________.
A. Information Technology
B. Computer Engineering
C. Artificial Intelligence (AI)
D. Human Intelligence
Question 3
Artificial intelligence refers to intelligence that is demonstrated by a machine. True or false?
Question 4
Artificial intelligence was recognised as a legitimate field of study in the 1940s. True or false?
Question 5
Although artificial intelligence had been a field of study since the end of WWII in the 1940s, it
was only recognised as a legitimate field of study in ________.
A. 1999
B. 1943
C. 1970
D. 1956
MANCOSA 53
Question 6
One of the earliest works that are now known to be AI was done by scientists, Warren
McCullow and Walter Pitts (1943). These scientists proposed a model of artificial neurons
which make up what is known as a _______________, which emulate the structure of the
human brain.
A. Nerve Network
B. Neural Network
C. AI Network
D. All of the above
Question 7
Leading scientists in the field had made promises that “super-efficient AI” (AI that could think
like humans and outsmart humans) was just around the corner. True or false?
Question 8
“Expert systems” were developed to replicate human reasoning (decision-making ability of a
human), but these failed to deliver on their promises. True or false?
Case Study 2.1
From the McDonalds case study above how has Artificial intelligence changed the company’s
operations?
54 MANCOSA
2.13 Summary
Artificial intelligence (AI) refers to the intelligence demonstrated by machines or software as opposed to humans.
The type of intelligence that is demonstrated by machines is what makes AI “artificial”. Machine intelligence and
artificial intelligence are used synonymously in some writings. Some research states that AI will never reach
human-like intelligence because of bounded rationality. By this, we mean that AI does not have the ability to make
decisions based on uncertain, incomplete and inaccurate information like human beings can.
The intelligence that humans possess has the ability to adapt to new situations, unlike AI which will have to be
programmed every time a new situation arises. However, adaptability through learning from experience is
something which is being integrated into AI systems
The year 1956 was an important milestone in the story of AI. Although there had been scientists who had been
working on AI, it was only officially recognised as a field of study in 1956. A small group of computer and research
scientists gathered at Dartmouth College for the first-ever conference to debate the possibility that machine
intelligence could imitate that of a human. This conference introduced different approaches in understanding AI.
Artificial intelligence will touch every industry in Africa, from fishing, to forestry, farming, manufacturing, financial
services and just about all aspects of daily life. AI will drastically change all the sectors of the economy and society.
After the adoption of AI, there will be an increase in job loss. In this section, we learnt about AI as a subfield of
computer science and about machine learning, the branch of artificial intelligence that uses data to make different
predictions. Concepts touched on in this section included algorithm, data, artificial intelligence narrow AI, weak AI,
artificial general intelligence (AGI), artificial narrow intelligence (ANI), machine learning, deep learning, and neural
network.
This section sought to compare and contrast human intelligence and machine intelligence by highlighting the
components of humanness that AI is trying to replicate. Capabilities such as sensing, reasoning and acting are
some of those components. Some AI research has concentrated on reproducing human cognition in machines so
that they can think humanly and act humanly. This has resulted in different categories of AI, namely: strong AI and
weak AI. Unlike humans, machines can only achieve narrow intelligence, whereas humans can learn useful
lessons from one activity and apply them to another. Computers are a long way away from being able to beat
humans at every instinctual undertaking because they do not possess artificial general intelligence. Regardless,
machines and AI have come a long way from how things were in the past. Machine learning has made great strides
in getting machines to perform human-like activities through the use of algorithms which are written instructions so
that machines can perform certain activities. Machine learning is a type of AI that uses algorithms to enable
computers to make decisions without having to explicitly program computers to accomplish the task. It represents
an entirely new computing paradigm and it is a new way of telling computers to fulfil our wishes. This section
introduced the concepts and approaches used in machine intelligence today and we are now able to differentiate
the three main approaches in machine learning, namely: supervised learning, unsupervised learning and
reinforcement learning.
MANCOSA 55
This section proposes different learning models, which could be applied to artificial intelligence. The different
learning models replicate the way in which the human mind works. Thus far, as per the last sections, algorithms
are one of the few ways in which machines have codified to imitate human logic. Some of the cases in which
machine learning is applied include cases that are simply beyond human competence, or where human expertise
is not available.
For example, think about the Mars Exploration Rover that is millions of kilometres away in space but makes
decisions all on its own. So, machine learning is one of the subsets of AI. The others being reasoning, natural
language processing (NLP) and planning. Although AI has made breakthroughs, it remains limited in showcasing
intelligence as humans do. Importantly, artificial intelligence, machine learning and deep learning are each
interrelated, with deep learning nested within the machine learning, which in turn is part of a larger discipline of
artificial intelligence. Deep learning, a recent technique in machine leaning, has led to numerous amazing
breakthroughs in AI. Through understanding deep learning, neural networks have vastly improved and they feature
in our everyday lives through their ability to adjust and learn as data changes. One example of this is Facebook
advertisements. The algorithms have been set in a way that they adapt and use information from our online
searches, and this will reflect on our social media accounts, such as on Facebook and Instagram. For example,
brands will sell us products or show us advertisements of things we might be interested in, based on our online
searches.
Readings
Marwala, T. and Hurwitz, E., 2017. Artificial intelligence and economic theory:
skynet in the market (Vol. 1). Springer International Publishing.

Question 1: How do we take a right-first approach to digital transformation
and technology use?
Question 2: How do we define a digital transformation process that makes

sense for us?
Question 3: How do we develop our organisational capacities for

change – our people, our management processes, our foresight?
Question 4: What’s our role in the bigger conversations on how technology

governs and impacts society?
56 MANCOSA
Answers to Activities
Video activity 2.1
Electricity had existed for many years, but it was expensive for individual families to have in their homes. It had
also been a difficult transition because most homes and buildings had not been designed with electrical wiring in
mind. However, by the late nineteenth century some of these obstacles were being overcome. The introduction of
electricity had a dramatic impact on daily life. The most obvious impact was the use of electric lighting. Light bulbs
were considerably brighter than candles or lanterns which helped improve eyesight. Also, as electric lighting
became more available it eventually proved to be much less expensive than the oil or gas used to light lanterns. It
was also cleaner than other forms of lighting because there was no soot or smoke filling the air. The number of
house fires dropped significantly because there were no longer as many open flames in people's homes.
Manufacturers began introducing a number of appliances and devices that used electricity. Most of these devices
were intended to make life easier. For example, electric vacuum cleaners, irons, stoves and washing machines all
reduce the amount of time the average family used to perform daily tasks. Homes and clothing also became
cleaner as a result. Tea kettles, toasters, waffle irons and many other devices also started showing up in many
kitchens. Radios and photographs provided a new form of entertainment as well. Electric refrigerators also had a
profound effect on day to day life. These were a vast improvement as compared to wooden ice boxes. Food could
be purchased and stored for longer periods of time. It also made foods safer to eat because refrigerated food did
not grow bacteria as fast. Additionally, grocery stores and markets could offer a wider variety of foods. Produce
such as fresh fruit and vegetables could be available year-round rather than just when these items were in season.
Electricity resulted in other changes as well. The structure of architecture began to change. Natural lighting was
no longer necessary as a light source. This allowed windows to become a convenience rather than a necessity.
Buildings could also become taller because electric powered elevators allowed for quicker travel to the upper
levels.
Video activity 2.2

These are exciting times for artificial intelligence or A.I. But what is A.I.? A.I. is the science of making machines
smart by using algorithms to allow computers to solve problems which used to be solved only by humans. A.I.
already powers; search engines, online shopping recommendations and digital assistants. Radiologists can use
A.I. to calculate the exact shape and volume of tumours, revolutionising treatment. Astronomers use A.I. to find
and evaluate exoplanets and distant solar systems, and unhappy motorists are using it to discover if they can
overturn parking fines. The possibilities of A.I. are endless, from fraud prevention to developing new strategies to
address climate change. A.I. technologies today are brilliant at analysing vast amounts of data to learn to complete
a particular task: A technique called machine learning. But A.I. is not good at transferring what it's learned from
one type of task to another, learning abstract concepts and one-shot learning where a general rule is learned from
a single experience, the sort of broad intelligence humans excels at. Even without achieving this broad intelligence
A.I. is raising questions. How might A.I. effect work?
MANCOSA 57
People will still be needed in the workplace, but jobs and roles are likely to change as some tasks become
automated and a new job is created. There is a risk that, at least in the short term, this could increase inequality
if some people are disproportionately affected and benefits aren't widely shared across society. What about social
equality and fairness? Bias coming from A.I. systems, even if unintentional, could disproportionately affect some
social groups, influencing anything from job prospects to treatment by the justice system, technology can play a
role in helping to manage bias. People need to address big questions about how society wants to use A.I.
Technology with A.I. at its heart, has the power to change the world. The more of us that engage with shaping its
development, + the more chance we have to ensure a better, fairer future with A.I.
Practical Application 2.2: consider that most scientist at the time where predominately men and also consider
the gender imbalances at the time.
Video activity 2.3

This is a simulation of a single biological neuron. Information flows in, is processed by the neuron and the results
flow out. This gives the neuron its abilities to react based on previously learned patterns. Technology duplicates
this by creating a structure that processes information like a biological neuron does except this process is
mathematical instead. Just like the biological neuron, information flows and is processed by the artificial neuron
and the results flow out. This single process becomes a mathematical formula that can be used for simple
problems, for those that are mathematically inclined this will look similar to a polynomial. A polynomial is limited to
the problems it can solve as shown in this graph of an order 5 polynomial. If this is all artificial intelligence could
do, it wouldn't be of much use. As with the brain, Artificial Neural Network’s power is in connecting sets of neurons
together in layers. When you connect them in layers the mathematical formula becomes something like a multi-
dimensional polynomial, this allows complex problems like what is shown in this graph to be discovered and used
for our benefit.
Video activity 2.4

The Turing Test created by pioneering computer scientist Alan Turing comes up a lot in sci-fi culture and
discussions about intelligent robots, but what exactly is the Turing Test and what does it mean if a computer passes
it. Alan Turing first described what we call the Turing Test in a 1950 paper, Turing wanted to answer the question:
Can machines think? To get to the bottom of this he devised a hypothetical test. Imagine a game with three
players, one player, the interrogator is isolated from the other two players, one of whom is human and one of whom
is a computer.
The interrogator’s job is to try and figure out which is the human and which is the computer by asking questions of
both? To make things harder the computer is trying to make the interrogator guess wrongly. In other words, it's
trying to be as indistinguishable from a human as possible. If more often than not the interrogator is unable to
determine computer from human, then it is possible we’re dealing with a thinking computer. Attempts to build
computers that can fool humans have revealed some fascinating challenges, for instance, it's hard to make a
58 MANCOSA
computer that's good at telling jokes. The Turing Test is not a perfect test of robot intelligence, for example, it
encourages trickery. One recent attempt involves a program pretending to be a young boy for whom English was
not a first language, conveniently covering up any linguistic slips. The Turing Test also doesn't account for non-
human intelligence. Some of the smartest computers around today have no chance of pretending to be a person
but that doesn't make the advances in A.I. that they represent, any less impressive.
Knowledge check 2.1

1. NLP, Cognition, Artificial Intelligence, Machine learning (in that order 1 to 4)
2. B. sense, reason and act
3. B. Agent
4. D. A and B could both be approaches to artificial intelligence
5. True
6. True
7. True
Think point 2.3: Consider the possibilities if robots that think and act better than humans and what that might
mean for humans.
Video Activity 2.6

Miracle of Human? Did you ever wonder why humans rule the world? Do you ever think about how we outperform
every other species regardless of their size or shape? It's all possible because of our most complex organ, our
brain. Our brains have evolved via curiosity, on a quest to seek knowledge about ourselves and the world around
us. Whilst most other species on Earth survive through a combination of strength and instinct, humans have
excelled due to their superior intellect. We live in an era where humans have become so powerful that now every
living thing on the planet is at mercy of human kindness. One wrong decision could wipe out all life from the earth,
the most advanced weapon humans have ever developed is language. Language is the essence of what it means
to be human, that’s why we have given names to every single object in the universe. It's in our DNA to be intelligent.
According to a study conducted by the National Institute of Health, babies can begin learning while still in the womb
and can recognise their mother's voice at birth. Just in the last 1000 years’ humans have achieved remarkable
things, complex culture, mass, sciences, arts and technology where other species have not moved past simple
hand tools. It's all because of collaboration not from competition. Our brain size and function have developed to
communicate and process complex information. Animals have more stylised functions that perform much simpler
mechanisms, that is why we don't see cows holding protests or chimpanzees writing literature. So, learning is the
most essential tool for human brain development, if we do not learn then we are denying our own existence. It's a
big deal, even if you can't understand it, every one of us is gifted with the most complex and amazing structures in
the whole universe.
MANCOSA 59
So, make use of it, there is no limit to what we can accomplish. It's only limited by our imagination. Don't you think
we should be more aggressive in seeking knowledge not just for living or becoming professional but to become a
better person and make this world a safer and better place for our coming generations?
It is important to figure out what makes humans intelligent in order to understand the capabilities of artificial
intelligence. Humans are intelligent because they can sense (take in sensory matter), reason (think about it) and
act (based on information from the environment). The human brain processes the information that is taken in. What
sort of information do humans take in and process? Furthermore, humans can identify even the smallest
distinctions with respect to language and objects in the universe. They can reason based on what they perceive.
Humans can make use of available information to arrive at a conclusion. Humans have many more capabilities
such as maintaining an image or mental model of their surroundings and thinking in a correct way. If AI is anything
to be excited about, it must at least match all human capabilities that demonstrate intelligence. Therefore, the goal
of artificial intelligence is to build systems that can operate intelligently without human intervention. What this
means is that where humans are good at communicating using a language, we then need to have an AI system
that recognises language. We now have such systems, for example, Siri, Alexa and Cortana, although they have
limited intellectual capabilities when it comes to having a prolonged conversation with a human.
Video activity 2.7

The easiest way to think about artificial intelligence is in the context of a human. After all, humans are the most
intelligent creatures we know of. A.I is a broad branch of computer science. The goal of A.I. is to create systems
that can function intelligently and independently. Humans can speak and listen to communicate through language,
this is the field of speech recognition. Much of speech recognition is statistically based hence it's called Statistical
Learning. Humans can write and read text in a language, this is a field of NLP, or natural language processing.
Humans can see with their eyes and process what they see, this is a field of computer vision. Computer vision falls
under the symbolic way for computers to process information. Recently there has been another way which I'll come
to later. Humans recognise the scene around them through their eyes, which create images of that world, this field
of image processing which even though is not directly related to A.I. is required for computer vision. Humans can
understand their environment and move around fluidly, this is the field of robotics. Humans have the ability to see
patterns such as grouping of like objects, this is the field of pattern recognition. Machines are even better at pattern
recognition because they can use more data and dimensions of data, this is the field of machine learning. Now
let's talk about the human brain. The human brain is a network of neurons and we use these to learn things. If we
can replicate the structure and the function of the human brain, we might be able to get cognitive capabilities in
machines. This is a field of neural networks. If these networks are more complex and deeper and we use those to
learn complex things, that is the field of deep learning. There are different types of deep learning in machines which
are essentially different techniques to replicate what the human brain does. If we get the network to scan images
from left to right, top to bottom it's a convolution neural network. CNN is used to recognise objects in a scene, this
is how computer vision fits in and object recognition is accomplished through an A.I. Humans can remember the
60 MANCOSA
past, for example what you had for dinner last night, well at least most of you. We can get a neural network to
remember a limited past, this is a recurrent neural network. As you see there are two ways it works; one is symbolic
based, and another is data-based. For the data-based side called the machine learning we need to feed the
machine lots of data before it can learn. For example, if you had lots of data for sales vs. advertising. you can plot
that data to see some kind of a pattern. If the machine can learn this pattern, then it can make predictions based
on what it has learned. While one or two or even three dimensions is easy for humans to understand and learn,
machines can learn in many more dimensions, like even hundreds or thousands. That's why machines can look at
lots of high dimensional data and determine patterns.
Video activity 2.8

If we want a computer to understand how to do something, we need to give it an Algorithm. ‘Pick up brush’.
Algorithm, sounds like a big word doesn't it, but actually an Algorithm is something very simple but important. ‘Pick
up toothbrush’. An Algorithm is a list of steps you'd give to computers to solve a problem or get something done.
Imagine that you need to show someone how you brush your teeth so they can learn how to do it themselves. You
would need to explain all the little steps you do in the right order so they can understand how to do it without getting
confused. Instructions would go like this: 1. Open the toothpaste; 2. Put a bit of toothpaste on the toothbrush; 3.
Open your mouth; 4. Brush your teeth nicely; 5. Rinse your mouth with water; 6. Smile. It is important to explain
the right steps in the right order so you can get great results.
Video activity 2.9

Our ability to learn and get better at tasks through experience is part of being human. When we are born, we know
almost nothing and can do almost nothing for ourselves but soon we're learning and becoming more capable every
day. But did you know that computers can do the same? Machine Learning brings together statistics and computer
science to enable computers to learn how to do a given task without being programmed to do so, just as your brain
uses experience to improve it to task, so can computers. Say you need a computer that can tell the difference
between a picture of a dog and a picture of a cat. You could begin by feeding it images and telling it, this one's a
dog, that one is a cat. A computer program to learn will seek statistical patterns within the data that will enable it
to recognise a cat or dog in the future. It might figure out on its own that cats have shorter noses and that dogs
come in a larger variety of sizes and then represent that information numerically organising it in space, but crucially
it's the computer not the programmer that identifies those patterns and establishes the algorithm by which future
data will be sorted. One example of a simple yet highly effective algorithm, is to find the optimal line separating
cats from dogs, when the computer sees a new picture, it checks which side of the line it falls on and then says
either cat or dog, but of course, there can be mistakes. The more data the computer receives, the more finely tuned
its algorithm becomes and the more accurate it can be in its predictions. Machine Learning is already widely
applied, namely; the technology behind facial recognition, text and speech recognition, spam filters on your inbox,
online shopping or viewing recommendations, credit card fraud detection and so much more. At the University of
Oxford, Machine Learning researchers are combining statistics and computer science to build algorithms that can
MANCOSA 61
solve more complex problems more efficiently, using less computing power, for everything from medical diagnoses
to social media. The potential of Machine Learning to transform our world is truly mind blowing.
Video Activity 2.10

Deep Learning and Machine Learning both offer ways to train models and classify data. This video compares the
two and it offers ways to help you decide which one to use. Let's start by discussing the classic example of cats
versus dogs. Now in this picture do you see a cat or a dog? How are you able to answer that? Chances are you've
seen many cats and dogs over time and so you've learned how to identify them. This is essentially what we're
trying to get a computer to do, learn from and recognise examples. Also keep in mind that sometimes even humans
can get identification wrong. So, we might expect a computer to make similar errors. To have a computer do
classification using a standard Machine Learning approach, we'd manually select the relevant features of an image
such as edges or corners in order to train the Machine Learning model. The model then references those features
when analysing and classifying new objects. This is an example of object recognition. However, these techniques
can also be used for scene recognition and object detection. When solving a Machine Learning problem, you follow
a specific workflow; you start with an image and then you extract relevant features from it, then you create a model
that describes or predicts the object. On the other hand, with Deep Learning, you skip the manual step of extracting
features from images, instead you feed images directly into the Deep Learning algorithm which then predicts the
object. So, Deep Learning is a subtype of Machine Learning, it deals directly with images and is often more
complex. When choosing between Machine Learning and Deep Learning you should ask yourself whether you
have a high-performance GPU and lots of labelled data. If you don't have either of these things, you'll have better
luck using Machine Learning over Deep Learning. This is because Deep Learning is generally more complex, so
you'll need at least a few thousand images to get reliable results. You'll also need a high-performance GPU, so the
model spends less time analysing those images. If you choose Machine Learning you have the option to train your
model in many different classifiers, you may also know which features to extract that will produce the best results,
plus with Machine Learning, you have the flexibility to choose a combination of approaches, use different classifiers
and features to see which arrangement works best for your data. As we mentioned before, you need less data with
Machine Learning than with Deep Learning and you can get to a trained model faster too. However Deep Learning
has become very popular recently because it is highly accurate. You don't have to understand which features are
the best representation of the object, these are learned for you, but in a Deep Learning model you need a large
amount of data which means the model can take a long time to train. You are also responsible for many of the
parameters, and because the model is a black box, if something isn't working correctly, it may be hard to debug.
So, in summary the choice between Machine Learning and Deep Learning depends on your data and the problem
you're trying to solve.
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Knowledge Check 2.2

1. Electricity, Software, Turing Test, Andrew Ng, Alan Turing.
2.C. AI
3. True
4. False
5.D. 1956
6. D. Periods where AI research failed to deliver, and the levels of funding and interest in AI diminished.
7. True
Case Study 2.1: Consider the following .1) Mobile app benefits in payments. 2) Benefits of the app in gathering
information on customer behaviour. 3) Promotions that inspire customer loyalty. 4) Benefits to customers on
knowing which branch has less queues.
MANCOSA 63
Unit
3: Emerging Technologies
64 MANCOSA
3.2 Big Data Analytics  Discuss big data analytics
3.3 Internet of Things and Internet of  Understand internet of things and internet of everything
(Everything)Things
3.4 Blockchain Technology  Understand blockchain technology
3.5 Main Potential Applications of

 Examine the main potential applications of blockchain
Blockchain
3.6 Robots  Understand the use of robots
3.7 Virtual Robotics  Understand what are virtual robots
3.8 Robo-Advisors  Explain what Robo-Advisors are
3.9 .Summary  Summarise topic areas covered in unit.

 Chen, B., Wan, J., Shu, L., Li, P., Mukherjee, M. and Yin, B. (2017).
Smart factory of industry 4.0: Key technologies, application case, and
challenges. IEEE Access, 6, 6505-6519
 Hozdić, E. (2015). Smart factory for industry 4.0: A review.
International Journal of Modern Manufacturing Technologies, 7(1),
pn.28-35
 Jackson, P.C. (2019). Introduction to artificial intelligence. Courier
Dover Publications
 Skilton, M. and Hovsepian, F. (2017). The 4th industrial revolution:
Responding to the impact of artificial intelligence on business.
Springer
 Skilton and Hovsepian (2018), “The 4th Industrial Revolution:
Responding to the impact of Artificial Intelligence on business”
MANCOSA 65
3.1 Introduction
Unit 3 explains the key emerging technologies in the 4th Industrial Revolution and takes you through some of the
major discussion relating to these advances. This unit provides an in-depth analysis of the major driving
technologies of the 4th Industrial Revolution and seeks to explain its applications to the modern world.
3.2 Big Data Analytics

Big Data Analytics can be defined as the application of a broad scope of data from within and around a business.
It is usually very difficult to use this data set and it might not be enough to use conventional computing applications.
Such a gap has consequently driven the growth of many businesses invested in capitalising on Big Data Analytics.
Big Data Analytics has various explanations. This could generate confusion, due to the complicated relations and
hierarchies that exists between all data (Manda, 2017). There is not a single distinct accepted definition of Big Data
Analytics in academic literature. Hu et al 2014 provide that there are three differing interpretations to be considered:
 Big data technology is the latest generation of technologies and architectures developed to derive
economic value from really big quantities of a vast range of data by allowing high-speed processing,
locating and/or analysing. This is according to the attributive concept (Ranchod, 2020)
 On the basis of the comparative description, rather, Big Data are datasets that cannot be recorded,
processed, handled, and evaluated by the standard database software application (Manda and Ben
Dhaou, 2019)
 Big Data is referred to in the architectural description as tasks where data size, transmission speed or
data representation restricts the capacity to implement effective analysis using conventional relational
methods, or demands substantial horizontal scaling to achieve effective processing (Lombard, 2017)
Big Data Analytics creates opportunities in current environments. This also opens up new prospects
for organisations and partners. By treating organised information in conventional ways, such possibilities were not
feasible. There are three aspects of Big Data Analytics. These are known as the 3 Vs
1. Volume: fairly relative large amount of data. The term "relative" refers to a company: a small company
could classify a fairly small data volume as Big Data Analytics. The vast amount of data that
is continuously flowing and rapidly growing inside and out of each organisation is what is referred to as
Big Data Analytics (Lekhanya, 2019). Some examples of these are visible in various sources such as:
 The arranged comminute call detail records (CDR) found in a call centre
 Comprehensive sensor data from telecommunication devices, such as PCs, handheld devices,
ATMs, POS's, etc
 External data, comprising of open data, market analysis as well as other behaviour information
 Unorganised social media data, various kinds of reports etc.
66 MANCOSA
Think point 3.1

What do you think about loyalty points on clicks cards and shopping reward
cards?
Think point 3.2

What do you think about your social media platforms advertising stuff that you
want to buy as soon as you google it?
Is it helpful?
Does it increase your options of shops by adding some you did not even know?
2. Velocity: In order to make prompt decisions, particularly in the functional context, organisations should
be equipped to obtain, process, evaluate and document large amounts of information as rapidly as
possible. Organisations must also, according to Manda and Backhouse (2017):
 Reduce latency for transparency, optimisation, cross-selling and sales across the various channels
 Provide fast intranet document search for the investigation of the impact of various events and
decisions
 Reduce the time for reporting in a data warehouse environment. Tools and solutions are required for
rapid data processing to prevent them from "aging" so much
 Click streams and ad impressions prints to monitor the performance of users at millions of events per
second
 Device-to-device operations share information among billions of equipment
 Equipment and sensors produce huge real-time log data
3. Variety: The bulk of organisational data is unstructured (estimated at an average of 85%). In order to
analyse the data not flowing into the organisation in a constant way, further elaborations are required; the
maximum loads can occur at the daily or cyclical frequencies. In addition, various sources can involve
different analytical architectures and technologies (audio, text, video, etc.) (Manda and Backhouse, 2017).
In addition to the usually organised processing system, data may be obtained from various sources. The
software will include smartphone, web, created agent, social networking sites, text, audio, video, system
logs, etc. Not only are Big Data Analytics numbers, data and lines (Pillay, Maharaj and van Eeden, 2018).
Big Data Analytics also includes papers, geographic information, three-dimensional data, the audio, the
images, and the video. It is not easy to process such a variety of data. Less structured data, less changes
with a stable and consistent data structures are handled by conventional database systems (Van Den
Berg, 2019). Big Data Analytics can usually be defined as:
 Structured: The framework of most conventional data sources is structured
 Semi-structuring: Many Big Data Analytics outlets are only partially structured
 Unstructured data set: for example, tape recording and sound data.
MANCOSA 67
Practical Activity 3.1

Monocle provides real-time social media analytic tools that aids companies
to manage their online and web presence better by providing them the
intelligence required to execute better decisions.
How do you think this helps companies in their productivity and performance?
It is necessary for organisations to make a case for any effort to collect and exploit data. It is easy to become a
victim of the latest trend and initiate Big Data Analytics projects without a good understanding of its market value.
For organisations to extract genuine value from Big Data Analytics; advances in goods, systems, organisations
and business models must be made possible (Skilton and Hovsepian, 2017).
Scholars and practitioners have identified the main problems of Big Data Analytics governance in (Prisecaru, 2016)
Assessment
 Recording
 Curation of data and consistency
 The question
 Privacy and computer protection
 Swap
 Storage of goods
 Transfer of funds
 Visualisation
This unit focuses on the retrieval of value from data: vast volumes of structured and unstructured data provide a
range of valuable information that managers can utilise to accomplish their goals in a more secure, successful and
cost-effective manner. According to Philbeck and Davis (2018), Big Data Analytics, makes for substantial cost cuts,
not merely by offering cost advantages, it also helps to find new possibilities and business practices.
Implementation of Big Data Analytics implies improved decision-making processes, both in terms of time and
quality; decision-makers have the opportunity to examine new data sources at a quicker pace. This may end up in
the exploration of "uncharted waters" as emerging markets, goods or services.
Analytics in Big Data may assist in the management of risk as well as cross selling. Big data is vital in the
management of risk as it enables the analysis of data from various sources. The process helps organisations to
track, identify and minimise any threats that could adversely affect operations (Pereira and Romero, 2017).
68 MANCOSA
Video activity 3.1

Watch the video in the link provided and answer the question that follows:
https://youtu.be/K59RsVsbL_U
What are the examples of Big Data Projects?
Video activity 3.2

https://youtu.be/UX8bIaFsJjY
What are the advantages and disadvantages of Big Data
Knowledge Check 3.1

1. What are the 3Vs of Big Data?
2. Big Data technology is the latest generation of technologies and
architectures developed to derive economic value from really big
quantities of a vast range of data by allowing high-speed processing,
locating and/or analysing. This is according to the attributive concept.
True/False
3. Considering the diversity of Big Data Analytics, it is not a challenge to
protect the privacy of unstructured data. True/false
4. What is Semi-structuring?
5. The framework of most conventional data sources is structured; this
is unstructured data. True/False
6. Big Data has no disadvantages. True/False
3.3 Internet of Things and Internet of (Everything)Things

Internet of Things (IoT) is one of the most important innovations in technology. It is sometimes called Internet of
Everything (IoE) by Cisco. IoT is a connection between uniquely recognisable embedded computing devices within
the current internet infrastructure (Pereira and Romero, 2017). IoT enables the use of the internet to connect not
just individuals, but also artefacts of any sort.
Sensors and other devices need a networking system to be "connected" to a network: some examples are sockets,
portals, access points, and routers (Pabbathi, 2018). For example, cell phones, laptops or printers can be linked
to the home network using a Wi-Fi router. For data transfer, gadgets need to be identified by network and internet
protocols: IPV4 and IPV6 are used to address computers where IP stands for Internet protocol (Li, Hou and Wu,
2017). A breakthrough in technology would be the ability to link systems, devices and sensors. Businesses and
MANCOSA 69
individuals rely on procedures. Essentially, these are a set of tasks that aid in the accomplishment of goals. The
goal in a business for instance could be the sales target. In the case of individuals, it may be a more practically
convenient insurance policy that takes into consideration the use of the insured product. Today, most of these
processes are unrelated (Lu and Weng, 2018). Individuals will need to switch from one task to the next, at most
assisted by an automated workflow. Much of the time, individuals move without any support whatsoever. IoT is
going to change this condition dramatically. Owing to different types of sensors, increasingly installed in objects,
IoT will manage to detect where an item or a human is, what he or she is doing, and what object or individual he
or she is in touch with. IoT, along with predictive analytics, is able to predict what a person is going to do now and
help to do that (Johannessen, 2018). Someone may be afraid of this big brother concept. That is definitely true for
some of the events, however it would be a huge benefit for others. Consider the black boxes that are mounted on
cars. IoT should have a large amount of data and make possible developments. Generally, IoT provides developed
connectivity between devices, structures and services.
It encompasses a broad variety of criteria, categories and programs (Jackson, 2019). The interconnectedness of
these portable systems (including smart objects) allows automation in almost all fields. In insurance, IoT can relate
to a broad range of machines, including health-monitoring instruments, biosensor transmitters on domestic
animals, automobiles that have internal sensors, or field-operated machines that aid in the monitoring system of a
large number of machines and circumstances (Hozdić, 2015).
Video Activity 3.3

Watch the following video and answer the question that follows:
https://youtu.be/ZTM9GA-4nBA
What is Internet of Things? ( IoT)
Video Activity 3.4

Watch the following video and answer the question that follows:
https://youtu.be/1VhO4yGAjyo
How do the Internet of Things (IoT) and Cyber Physical Systems shape the 4th
Think point 3.3

In your daily life, where do you encounter IoT?
Is it helpful?
Does it is make life easier?
70 MANCOSA
According to (Harari, 2018), by the year 2020 there will be almost 26 billion computers on the Internet of Things.
He also predicts that IoT will connect about 30 billion gadgets electronically by 2020. In the survey conducted by
Harari (2018), a large bulk of technology experts and devoted web users – 83% – agreed that the IoT/Cloud of
things, embedded and portable computing would have pervasive and advantageous effects by 2025. IoT would
enable close-to-real-time mobile tracking of a particular situation and make it easier for financial products, such as
insurance products, to be priced even more flexibly. For example, collecting relevant information on the customers
buying patterns would be possible (Tuomi, 2018).
Few insurance providers have already adapted, utilising vehicle telematics data to price their automobile and
transport plans (Carter, 2018). The problem, however, is how to make use of IoE. This depends on the strengths
of different enterprises.
It will move ICT from the information and communications technology we know, to a new ICT of creativity,
cooperation and transformation. It is a huge obstacle for some ICT administrators. They need to switch the
positions from Chief Information Officers to Chief Innovation Officers. If they can accept it, the obstacle will rely
very much on the individual (Carter, 2018).
Knowledge check 3.2

1. What are the main parts of IoT systems?
2. What are security concerns related to IoT?
3. Internet of Things (IoT) is one of the most important innovations in technology. It's
sometimes called Internet of Everything (IoE) by Cisco. True/False
4. Generally, IoT providers had not developed connectivity between devices, structures and
services. It encompasses a broad variety of criteria, categories and programs. True/False.
5. Sensors and other devices need a networking system to be "connected" to a network: some
examples are sockets, portals, access points, and routers. For example, cell phones,
laptops or printers can be linked to the home network using a Wi-Fi router. True/False
3.4 Blockchain Technology

Blockchain was created together with Bitcoin, a virtual currency. Blockchain is basically a server for documenting
transactions in a safe manner. Blockchain is a shared database, capable of creating a public record of all
transactions, not necessarily stored at a single physical location, but instead scattered over a network of intertwined
computing (Webb, 2019). Blockchain is a distributed solution, for example, all group members in the P2P network
have a duplicate of the full set of data. As a result, there is no official jurisdiction. Each network user may use
cryptography and digital signatures to try and influence the log without triggering security problems. Using these
virtual devices, a real-life (not visible) identity is connected to a cryptographic identity. It is useful for checking and
validating transactions. Blockchain and other associated transformative technologies have attracted close
attention in the financial sector. Blockchain is fairly stable, clear and non-modifiable. Blockchain has larger potential
MANCOSA 71
compared to digital currency alone, despite the fact that the concept was conceived in relation with Bitcoin
(Petropoulos, 2018). It allows location-to-location transactions without a clearing intermediary. This significantly
reduces transaction time, standard and charges. When coupled with smart contracts, blockchain enables digital
securities and commercial financial variants to be issued automatically.
For example, the insurance industry would even offer new ways to apply blockchain. There are two types of records
in the distributed ledger namely:
 Transactions
 Blocking
Transactions are at the heart of the whole procedure. With blockchain used for the Bitcoin crypto money, a
transaction is the exchange of the Bitcoin value among customers. Blocks encompass the right number and order
of valid transactions — immutably added to the directory. The derived transaction is not incorporated into
the blockchain instantly. It has to be verified to lend credence to the so-called consent method. Ledger technology
uses the network to reach an agreement: once the bulk of members decide on the validity of a block of unresolved
transactions, it is added to the blockchain (Petropoulos, 2018). Protocols on general agreement are necessary to
secure the public ledger from unwelcome adjustments. Consensus is also the focus of the distinction between
institutions that use blockchain technology in their business.
The energy for the data centre is a critical part of that revenue. Evidence of-work-based agreement protocols are
however, sluggish, taking up to one hour to validate payment in a safe manner in order to prevent duplicate
spending. Thanks to the time and cost concerns, other guidelines have been put forward. Tendermint,
Asynchronous Randomised Business Consensus, Byzantine, Altruistic, Rational, Secure Copy Protocol, etc. using
a conceptual point of view, the suitable protocol is a payment-compatible Nash balance such that straying from
protocol does not lead to a net benefit (Luo, Tong, Fang and Qu, 2019). Unique articles can include more
technological and operational information. Protocols are still a distance from being perfect today. They have many
complex factors. This is why numerous academics and specialists continue to focus their resources to develop this
intriguing and high-potential field.
Blockchain technology is showing impressive potential in a number of fields, notably in the financial services sector.
Blockchain has been offering loyalty and authenticity. These are important facets of the financial services sector.
But, as with any other technology, it can be prone to fraud. US authorities have raised concerns that bitcoin
imitation systems are vulnerable to user collusion fraud. In the year 2016, a major event took place in Hong Kong,
resulting in theft of $65 million (Siau, 2017). This incident shows that hacking robbery is also a possibility. More so,
as there are various organisations working in different levels of security and offering numerous points of entry. Also
Bitfinex’s multisignature program, which needed the approval of two out of three users for transactions, proved to
be robust. Bitfinex heist or the none trust-based blockchain security needs improvement to be completely accepted
(Siau, 2017).
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Video activity 3.5

https://youtu.be/SSo_EIwHSd4
How does blockchain work?
Different Forms of Blockchain: As far as access protocols are concerned, distributed ledgers may either be:
Public: that is any person wishing to do so can have exposure to the Ledger and request transactions for
participation. This is the blockchain technology used by Bitcoin. Most perceive this to be the genuinely
democratised type of the ledger and the optimal system (Hwang, 2018).
 Private: just a limited number of participants will display and submit transactions. While several
participants may be present in the sector, only certain entities or organisations would have access to the
ledger and to the production of the blockchain. This approach is similar to financial transactions or
conventional banking due to the centralised nature of the process. A few entities or brokers are able to
validate these transactions, but everyone can engage in asset trading (Greenman, 2017). This method
compromises possibly lower transaction expenses to the public blockchain for improved dependability
and security. The supervisor should summon and authorise individuals or organisations wishing to
participate in the verification network. In a confidential blockchain, the assets needed for a consensus
can be reduced, defeating a major problem in the use of blockchain for digital currencies (Hwang, 2018).
On top of public and private books, blockchain lies under two related but separate categories:
 Permission less: which entails that anyone can add on to the blockchain. As described before, once
checked, the transaction is added to the block chain. With the permission less ledger, anybody may
decide to participate in this verification network and receive possible incentives for their participation. The
method of verification or mining can be very complicated (Greenman, 2017). There is always the
possibility of an entity or person effectively threatening the system, seeing as sufficient focused computing
power can override the system. Another issue with permission less blockchains, permission is
adaptability. Blockchain's data criteria restrict this kind of technology's growth potential. Each node in the
network must process every transaction in a permission less blockchain. Due to the increased provision
of transaction services, this is not effective.
 Permissioned blockchains gain momentum between financial and virtual ledger based start-ups. For the
transaction to be complete, a financial institution needs to test non-cash transfers between people. It is
reasonable that organisations want the same level of control on digital currency verification and
documentation to reduce risks (Makridakis, 2017).
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It can take longer to carry out transactions but could be cheaper, because transaction service delivery is limited
and the network hash rate is lower and the evidence of concept solution is harder to obtain, but that means that
transactions are less expensive for providers of transaction services.
A public, permission less blockchain, is the latest type of blockchain applied to most virtual currencies. Security
issues are there.
Blockchains can guarantee that payment authentication and transactions can take place without centrally
controlled monitoring, similar to a central bank or even just a bank (Siau and Yang, 2017).
Think Point 3.4

What do you think are the risks of blockchain technology?
Practical Activity 3.2

What are the blockchain technology applications do you know in Africa?
3.5 Main Potential Applications of Blockchain

Blockchain can be used as an open data for interrelationships between an organisations and third parties: networks
of agencies, vendors externally, and clients. Dispersed ledgers, like blockchain, have many opportunities for cross-
industry usages. These include dispersed ledgers with verification, transaction recording and access limitations.
While these key innovations have slight impact on the basic engineering of the blockchain when it comes to viewing
or verification of the transactions on any distributed ledger they have an impact (Siau and Yang, 2017). The
decentralised ledger's core concept should also fundamentally be the same. Blockchain is a very cost-effective
way to make data accessible and exchanged between a number of organisations.
It is a reliable tool which enhances the profitability of the financial sector. Blockchain may impact fund management,
bond and debt management, trading and the handling of claims. It may offer strong assistance to trade finance in
the financial environment.
Blockchain could help with a distributed ledger solution in the development of smart contracts (a computerised
program or transaction mechanism designed to automatically execute, monitor or record events and acts that are
legally significant in compliance with the contractual terms or agreement). It may help with customer identity,
reference information and assets management in a contract or order (Agrawal, Gans and Goldfarb, 2019). It will
boost the exposure of most industries and ensure a fast, efficient and disrupted messaging service.
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Case Study 3.1
What are the benefits of Bitcoin to the business?
Think Point 3.5

What recent example of blockchain technology do you know that changed the banking
industry?
In the financial services sector, there are also other possible blockchain uses, once major financial players (for
example banks, brokers, clearers and funds) trust the degree of protection and the stability of the transactions,
Blockchain or dispersed ledger technology can gain more momentum. An industry agreement must be achieved
about the architecture of the ledger and the verification methodology (Agrawal, Gans and Goldfarb, 2019).
Companies should believe that technology in their industries is at low risk for use. In addition to potential threats
and prospects, digital currencies such as Bitcoin are the key technological breakthrough in blockchain technology
(more information on bitcoin will be outlined in the following section). This is sufficient to state that a cryptocurrency
is a currency that uses cryptography for security purposes: it is therefore difficult to clone and does not come from
the centralised authorities (Popenici and Kerr, 2017).
Video Activity 3.6

https://youtu.be/ydp3sj0N0GQ
What are the main applications of Blockchain?
Video Activity 3.7

https://youtu.be/7IKoXDT_h0s
What are the blockchain technologies used on a daily basis
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3.6 Robots
A robot is a technology or technological process that can execute operations previously performed by humans.
Robots are increasingly finding ways to provide financial services as well. Fintech has disrupted the financial
services sector with contemporary services and products and has disrupted the traditional organisational paradigm
through technological innovations (Cockburn, Henderson and Stern, 2018). Virtual robotics is one of the major
innovations in this area. This technology mainly takes the form of financial robot consultants in its applications to
the economy. Robo-advisors are defined as specific group of advisers who offer online services with "limited
person interference". While robot consultants might back up wealth administration services, they have so far been
used primarily in portfolio administration. Some robot-advisor companies have already been connected to existing
businesses (Cockburn, Henderson and Stern, 2018).
Think point 3.6

Are you comfortable with a robot helping you with financial advice?
3.7 Virtual Robotics

According to Wang and Siau (2019) approximately 50% of today's service jobs are taken over by computers. Many
schools in economics have examined organisational changes with a number of concerns (Cockburn, Henderson
and Stern, 2018).
This means a period in which organisational structures undergoes major changes and transformations together
with their own elements. The consequences of an organisational change need one to be open minded in order to
understand the effect within the boundaries of an organisation (Wang and Siau, 2019).
3.8 Robo-Advisors
Nowadays, financial advice comes primarily from people. Virtual applications could give advice. The whole process
underlying it is vastly different, starting from its design right up to distribution. Moreover, the human brain can never
operate as an algorithm (and vice versa), therefore the content of the recommendations generated will rarely be the
same, at least at present (Bini, 2018). Another factor, that is, the underlying cost structure, is the major
differentiation. Many economic perceptions propose that the use of digital solutions can significantly lower costs
and be more effective in some cases.
The value proposition provided could be reshaped by robotic advisors (Wang and Siau, 2019).
Firms could provide affordable services, reach various markets and acquire new customers. This is a way of doing
mass banking and insurance services. The advice will actually go virtual, according to Siau and Wang (2018). New
entrants are reinventing the market by modifying user experience and reducing costs, by developing contextually
new models to enable them to achieve undiscovered designs (Ongsulee, 2017).
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Case study 3.2

Robo-advisory in finance
Algorithms have already been used with success in the area of financial
advisory and wealth management. Allan Gray, a firm using AI-powered robot
advisors, is changing the way financial business advisory is conducted. The
firm uses “robo-advisors”, an AI-based system of intelligence that offers
personalised wealth management advisory, has replaced hundreds of experts,
and is better than humans at the job, with diminished costs. Allan Gray's
clientele is diverse, and all age-groups are represented. In 18 months, Allan
Gray's assets under management expanded from R7.3 billion to R13.6 billion.
Are Robo-Advisors beneficial?
Video activity 3.8

Watch the following video to learn more about robo-advisors and answer the
question that follows:
https://www.youtube.com/watch?v=L90ywD3vc1s
What did studies predict about 2020?
3.9 Summary
Big Data Analytics allows for significant cost savings, not only by providing cost benefits, but by initiating different
alternative ways of conducting business. It helps bring forth a better decision making process, in terms of quality,
performance and time. People with the responsibility of making decisions, have a chance to assess the new data
sources more quickly, which might lead to the establishment of completely "uncharted waters", as new products,
markets and/or services are discovered. Robots have enabled the expansion of the client base to be achieved by
substantially lowering the cost of the service rendered. The internet of Things (IoT) is a linkage between
distinctively identifiable embedded computing devices in the existing network infrastructure. the Internet of Things
(IoT) allows the use of the internet to link not only human beings, but also objects of any kind. Sensors and other
technologies need a network infrastructure to be "linked" to a network: a few examples include portals, access
points, routers and sockets. For instance, printers, mobile devices, or laptops can be connected to the home
network using a Wi-Fi router. Blockchain technology has the capability and capacity to transform many sectors, by
guaranteeing trust and traceability between participants of the same network. Individuals and institutions should
take these innovative technologies into consideration for use in their day-to-day operations as the world changes.
This becomes even more essential for conventional institutions introducing new technological advances. The key
to growth is to implement an innovative environment and to be captivated, not vilified, by change and innovation.
MANCOSA 77
Unit 3: Revision question

Discuss Big Data including its advantages and disadvantages.
Think point 3.1: Consider how loyalty points make people go back to the same shop to accumulate more points.
In that process the business retains customers and is able to build a market share.
Think point 3.2: This is one of the fastest growing advertising platforms as it brings products directly to your
interface where you are personally involved. You can only buy what you see. So the fact that you googled it, shows
you are interested in it, the more you see it, the more you will want to buy it. It is helpful in the sense that it brings
to your attention the fact that a shop that you did not know well, sells that product
Practical Activity 3.1: Consider how this gives competitors and emerging companies a chance to fight an already
stiff market. Analytical tools help companies to offer personalised and customer cantered products and services
which in turn increases the probability of sales and hence profits.
Video activity 3.1: Consider the following Big Data for cybersecurity. Health status prediction. Anomaly detection
in cloud servers. Recruitment for Big Data job profiles. Malicious user detection in Big Data collection. Tourist
behaviour analysis. Credit Scoring and Electricity price forecasting.
Video activity 3.2: Consider the following in your answer

Advantages: Improved business processes. Fraud detection. Improved customer service. Understanding and
Targeting Consumers. Optimise and Improve Business Processes. Supports Developments in Artificial
Intelligence. Empowers Online Businesses and the Digital Ecosystem. Equipping Organisations with Better
Capabilities.
Disadvantages: Privacy and security concerns. Need for technical expertise. Issue Over the Value of Big Data.
Knowledge Check 3.1

1. Volume, variety and velocity
2. True
3. False
4. Many Big Data analytics outlets are only partially structured.
5. False
6. False
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Video Activity 3.3: The internet of Things (IoT) is a linkage between distinctively identifiable embedded computing
devices in the existing network infrastructure. The Internet of Things (IoT) allows the use of the internet to link not
only human beings, but also objects of any kind. Sensors and other technologies need a network infrastructure to
be "linked" to a network: a few examples include portals, access points, routers and sockets. For instance, printers,
mobile devices, or laptops can be connected to the home network using a Wi-Fi router.
Video Activity 3.4: Such systems are industrial automation systems that allow many creative features, through
their connectivity and access to the cyber world, to dramatically change our daily lives. In this sense, new business
models, work processes and production methods that are actually unthinkable will arise. Such reforms would also
have a significant effect on culture and individuals. Community life, globalisation, economies, etc. would have to
be redefined. At the same time, however, Fourth Industrial Revolution reveals features that create difficulties in
terms of the production of cyber-physical structures, reliability, security and data protection.
Think point 3.3: Consider at your home how printers, mobile devices, or laptops can be connected to the home
network using a Wi-Fi router.
Knowledge check 3.2

1. IoT system consists of three main parts: Sensors, Network connectivity, Data storage applications.
2. This is the common IoT Interview Questions asked in an interview. Data security and privacy are major
concerns related to IoT. These devices are vulnerable to hacking and cloud endpoints could be used by
hackers to attack servers. Software developers and device designers have to ensure adequate security
and privacy measures.
3. True
4. False
5. True
Video activity 3.5: Blockchain is a technology focused on digital currencies (Bitcoin, Ethereum, Litecoin, and the
like). The technology allows digital information to be transmitted, but not copied. It means that each set of
information can have only one owner. You can hear it defined as a "digital ledger" maintained on a distributed
network. A good example to help you comprehend how Blockchain works: "Imagine a spreadsheet that has been
duplicated millions of times over a computer network. Then assume that this network is built to constantly update
this spreadsheet. The information is continuously reconciled with the database, which is stored in various locations
and updated instantly. This ensures that the documents are available and verifiable. Because there is no central
location, it is more difficult to hack because the knowledge occurs concurrently in millions of locations.
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Think Point 3.4: In your answer pay attention to the following risks: Legal risk, Settlement risk, Financial risk,
Operational risk, Key management risk, Code and cryptography risk, Forks and chain-split risks, Consensus and
governance risks. Risks have long been managed in the mainstream financial sector with a clear legal structure.
Blockchain poses new threats, establishing a void in the legal system and a new range of security issues that must
be addressed for the successful implementation of blockchain technology and the fulfilment of all its intentions.
Finance practitioners need continuing education to keep ahead of this rapidly evolving technology and to take
advantage of its benefits and opportunities.
Practical Activity 3.2: Blockchain used to validate diamonds throughout Africa by DeBeers, Interpol & VoguePay
uses Blockchain platform to fight criminal activities in Nigeria, The DRC Pilot scheme uses blockchain to oversee
the DRC’s cobalt sector, WISeKey & Microsoft Partnership aids the Rwandan administration to embrace blockchain
technology.
Case Study 3.1: The following should be considered in your answer: User Autonomy, Discretion, Peer-to-Peer
Focus, Elimination of Banking Fees, Very Low Transaction Fees for International Payments, Mobile Payments and
Accessibility.
Think Point 3.5: Bitcoin, Ethereum, Litecoin, among others.
Video Activity 3.6: Consider the following applications of blockchain: Payment processing and money transfers,
Monitor supply chains, Retail loyalty rewards programs, Digital IDs, Data sharing, Copyright and royalty protection,
Digital voting, Real estate, land, and auto title transfers.
Video Activity 3.7

Entertainment- KickCity, B2Expand, Spotify, Shazam
Retail- Warrantee, Blockpoint, Loyal
Supply chains and logistics- IBM Blockchain, Food industry, Provenance, Blockverify, OriginTrail
Healthcare- MedicalChain, MedRec, Nano Vision, Gem, SimplyVital Health.
Real Estate- BitProperty, Deedcoin, Ubiquity
Charity- BitGive, AidCoin, Utopi
Financial Services- Bitcoin Atom, Securrency, Ripple, ABRA, Aeternity, Smart Valor, E-wallet, send imali, Circle—
Send money via text without any fees.
Think point 3.6: Consider the amount of time you would otherwise spend on the queue to ask a simple question,
take into account how the bank tellers and those attending queries tire after a long day of being asked simple
questions. Also consider how easily accessible the robo-advisor is from the comfort of your home.
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Case study 4.2: Consider both sides of the coin i.e. the saving of the employment cost to the firm and secondly
the loss of jobs by the employees and present a well-balanced argument on whether the introduction of robo
advisors is beneficial.
Video activity 3.8: Studies assumed the Robo Advisors or digital advice market as they call it will swell to 500
billion dollars by 2020 and traditional investing firms like Fidelity, Schwab and Vanguard, they'll control two thirds
of all assets in that market which is a huge chunk. Currently the typical customer is between 35 and 45 years old
and has an average account balance between twenty thousand and one hundred thousand dollars. That's a lot
less money than financial advisors are used to managing. So is there still a place for people in a digital advisor
world? Well probably if they learn to use robot technology as part of their services. You see Robo Advisors have
yet to experience a true bear market, they haven't had panic clients watch their savings and investments circle the
drain. That day will come, it always does and the need for a real person with expertise on the other end of the
phone will be there, but who or what will be on the other end of that line is the multitrillion dollar question facing
investors, advisors and money management companies around the world?
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Unit
4: The 4th Industrial Revolution
and Artificial Intelligence in the
Real World.
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4.2 The 4th industrial Revolution in  Explain 4th industrial revolution in our everyday lives
our Everyday lives
4.3 The Dominance of the US and  Understand the dominance of the US and the West in
the West in ushering in the 4th ushering the 4th industrial revolution through AI research
Industrial Revolution through AI
Research
4.4 The 4th Industrial Revolution in  Discuss 4th industrial revolution in South Africa
South Africa
4.5 The 4th Industrial Revolution and  Recognise the 4th industrial revolution and AI in economic
AI in Economic Growth and growth and social development
Social Development
4.6 The 4th Industrial Revolution’s use  Recognise the 4th industrial revolutions use of AI in
of AI in Manufacturing, manufacturing, maintenance and distribution
Maintenance and Distribution
4.7 The 4th Industrial Revolution in  Discuss the 4th industrial revolution is business
Business
4.8 The 4th Industrial Revolution and  Demonstrate and understanding in the 4th industrial revolution
AI in Solving Real-World and AI in solving real work problems
Problems
4.9 Summary  Summarise topic areas covered in unit
MANCOSA 83

 Schwab, K., 2017. The fourth industrial revolution. Currency
 Li, G., Hou, Y. & Wu, A. (2017). Fourth Industrial Revolution:
Technological Drivers, Impacts and Coping Methods. Chinese
Geographical Science, 27(4): 626-637
 Lu, H.P. and Weng, C.I. (2018). Smart manufacturing technology,
market maturity analysis and technology roadmap in the computer
and electronic product manufacturing industry. Technological
Forecasting and Social Change, 133, pn.85-94
 Pabbathi, K.K. (2018). Quick Start Guide to Industry 4.0: One-stop
reference guide for Industry 4.0. Kiran Kumar Pabbathi
 Pereira, A.C. and Romero, F., (2017). A review of the meanings and
the implications of the Industry 4.0 concept. Procedia Manufacturing,
13, pn.1206-1214
 Philbeck, T. & Davis, N. (2018). The Fourth Industrial Revolution:
Shaping a New Era. Journal of International Affairs, 72(1): 17-22
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4.1. Introduction
Unit 4 examines how the 4th Industrial Revolution is positively impacting humanity in many areas of life, such as
manufacturing, business, supply chains, health, education, security, and so on. This unit also tracks the emergence
of Silicon Valley in relation to advances made in the 4th Industrial Revolution.
4.2 The 4th industrial Revolution in our Everyday lives.

For a long time, AI was a topic for scientists. This has changed recently. The systems we require to sustain our
way of life in the 4th Industrial Revolution are now run by AI algorithms. In the 4th Industrial Revolution AI is already
being used to manage power grids connecting power generation plants, manufacturing plants, and homes. AI is
the bedrock of the 4th Industrial Revolution and it is everywhere now. For example: When you type a query into
Google or any other search engine, machine learning algorithms working in the background figure out which results
to show you, and which advertisements to accompany those results. When you wake up to check your email, you
do not waste your time reading spam email because machine learning algorithms have removed tens, even
hundreds, of spam email so that you only view priority email that requires your attention. If you use Gmail, it has
conveniently organised your email in folders with primary (priority) email to which you should give the most
attention, updates that you may want to check and promotions comprising of commercial sale events from Amazon,
Ali Baba, Takealot and other online stores to which you have subscribed. Netflix recommends movies or shows
from the thousands they have that you may prefer to watch based on your viewing behaviours and patterns.
Similarly, Amazon recommends books that you may prefer to read.
Suppose you are doing an assignment that requires you to understand information written in another language -
no problem! Google Translate automatically translates it for you. In the background, algorithms are working with
Big Data to give you a personalised and curated experience. When you and your friends use Uber to visit a new
restaurant on the other side of town, you simply use an application that calculates distance, arrival time and the
fair. By using Uber, you are interacting with an intelligent system.
4.3 The Dominance of the US and the West in ushering in the 4th Industrial Revolution through AI Research
Kai-Fu Lee is one of the leading AI scientists and entrepreneurs, and he is the former president of Google China.
Lee thinks that in the past 20 years, companies in Silicon Valley - a region in the southern part of the San Francisco
Bay Area in Northern California, US - have achieved their dominance in the world technology markets. In the past
two decades the so-called "dot.com" companies from Silicon Valley - of which Google and Facebook are the most
popular - have surpassed their competitors in the US and the rest of the world (Tuomi, 2018). In the past 20 years,
Google has become the most popular technology corporation in Silicon Valley and beyond. Similarly, Facebook
has excelled in the area of social networking.
Apple is another big-tech firm from Silicon Valley that comes to mind. In the mid-1990s, Apple was facing extinction,
but it re-emerged with brilliant high-tech gadgets, the iPhone and iPad (Jackson, 2019).
MANCOSA 85
15Figure 4.1, Companies in Silicon Valley

(Steiber & Alänge, 2016: 37)
There are many other billion-dollar technology corporations in Silicon Valley (see figure 4.1 above), and we
consume and interact with their products every day without realising it. One of the biggest movie deliverers, Netflix,
is headquartered there. Hewlett-Packard, a tech-giant that provides some of the printers that we use at home and
work started in the Valley way back in the late 1930s. The modern automotive company known for making electric
and self-driving cars, Tesla, originated in the Valley. In addition to established tech-giants, Silicon Valley is home
to thousands of technology start-ups, a sizeable number of which get to invent products. Therefore, Silicon Valley
has become the global centre of technology innovation (Fink and Elisabetta, 2019).
Many experts believe that the leading technology companies in Silicon Valley had given the US dominance in the
digital world, which extended its supremacy in the military and economy spheres (Lee, 2018).
For a long time, Silicon Valley companies produced computer chips and transistors made with semiconducting
silicon material. Silicon Valley is known for producing computer processors and microcomputers which enable the
computer to work. However, the history of the region reveals that the status of the valley as the hotbed of
technology and management innovation and entrepreneurship is no coincidence.
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Nowadays, Silicon Valley is producing high-tech products beyond silicon transistors and microprocessors.
Companies in Silicon Valley are riding the current wave of AI (Penprase, 2018).
16Figure 4.2, Silicon Valley (A Centre of Innovation and Technology)

(Steiber & Alänge, 2016: 37)
Silicon Valley in figure 4.2 is the cradle of much of today’s information technology. How did a single region evolve
into a birthplace of IT technology? To explain this evolution, let us first consider where the name Silicon Valley is
derived from.
Silicon Valley refers to a geographical area - a region in the southern part of San Francisco in the Bay area in
Northern California. It roughly corresponds to the Santa Clara Valley. But Silicon Valley is more than a geographical
area. In the past two decades, it has become synonymous with the global centre of innovation in technology and
management and a “hotbed for breeding start-up companies” (Steiber & Alänge, 2016: 37).
Video activity 4.1

Watch this video to learn more about the history of innovation in technology and innovation in
Silicon Valley and answer the following question: How did the Silicon Valley become became
a 2.8 trillion neighbourhood?
https://www.youtube.com/watch?v=UO-8CMdeSHA
Silicon Valley’s inventions and high-tech products have contributed immensely to the
strengthening of the US military. This dates back to the early 1900s when the focus was on
radio and transmission equipment. The invention of integrated circuits (transistors), which
enabled the production of smaller and faster microprocessors used in personal computers,
MANCOSA 87
and the development of the internet that i accessible to the mainstream society, all have the
Silicon Valley footprint. At the centre of value addition through invention and manufacturing is
Stanford University. More than 50% of Silicon Valley’s product development is due to
companies founded by Stanford University Alumni (Li, Hou and Wu, 2017).
What are the AI technologies that you use daily
4.4 The 4th Industrial Revolution in South Africa

The first Summit of the Fourth Industrial Revolution (4IR) of the Digital Economy was held in South Africa in July
2019. Here, President Cyril Ramaphosa positioned Industry 4.0 as a chance for South Africa to utilise R5-trillion in
value over the next decade which is about the size of South Africa's current GDP. It has been stated that companies
will "unlock the economic potential and build the Silicon Valley" in South Africa. To recognise this, a 30-member
committee was set up to provide policy guidance to the government on how policy strategies and policies could
help this initiative (Manda and Dhaou, 2019).
The president's enthusiasm has seen 4IR proclaimed as a new phenomenon for the salvation from the economic
crisis facing South Africa, the real hero that could take the nation out of its economic gloom. Nevertheless, the
questions still remain: is the 4th Industrial Revolution what it has been cracked up to be, and is South Africa willing
to use such innovations to the benefit of its citizens? (Manda, 2017).
4.4.1 Is South Africa Ready for Industry 4.0?

At the very same summit that Ramaphosa applauded the 4th Industrial Revolution, keynote speaker George
Friedman, US-based geopolitical prognosticator and strategist, indicated that Fourth Industrial Revolution may not
be an economic messiah for South Africa. His unpopular view is that South Africa might be served better by
concentrating on and exporting a low-wage labour model, following the model used by China to develop the
economy before moving to the Fourth Industrial Revolution (Lombard, 2019).
Instead of trying to skip the phases that developed economies such as the US, China and Japan underwent, SA
needs to place far more emphasis on a low-wage export system, Friedman said. His belief is that so much of the
South African population is impoverished and lacks access to technology, that it will not fully reap the benefits of
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4IR- or indeed that it may greaten inequality in the population. Many also argue that a look back at the previous
three industry advances shows that they did not necessarily advance the prosperity of the working classes and
poor, instead they were largely to the advantage of big capital- and that South Africa’s alienated poor run the risk
of being no different (Manda and Backhouse, 2017).
In a survey conducted by Deloitte, 100 South African executives, along with others around the world, were asked
about their impression of the future of the Fourth Industrial Revolution and the readiness of their organisations to
embrace it. Only 4 percent of the South African executives surveyed compared to 14 percent worldwide were
confident that their organisation would be ready to embrace the 4th Industrial Revolution. An astounding 73 percent
of South African executives thought that the 4th Industrial Revolution technology would replace human employees
instead of complementing them, as opposed to 47 percent globally. Although 86 percent of global executives
claimed that they were doing well in positioning their workforce for the Fourth Industrial Revolution, only 63 per
cent of South African executives agreed (Lekhanya, 2019).
The 4th Industrial Revolution is not all negative and has some major economic benefits when used and facilitated
correctly in the economy, helping to secure and maximise the competitive advantage of the global markets.
There is no doubt that, properly harnessed, the 4th Industrial Revolution wave could propel parts of the South
African economy forward. The question remains if this gain will be felt by all the South Africans or by only a few
capitalists and politicians (Pillay, Maharaj and van Eeden, 2018).
4.4.2 The Future of the 4th Industrial Revolution in South Africa

The South African government began the procedure of acknowledging the need to tackle the future by naming the
Department of Communications and Emerging Technology's Presidential Commission on 4IR. South Africa needs
to invest in new skills in research and technology that will help bolster and develop future leaders. The alliance,
which comprises of the private and public sectors, including that of the 4th Industrial Revolution Network Centre
for the World Economic Forum, offers incentives for both the public and private sectors to tackle key issues of
governance in response to major technological changes in South Africa (Pillay, Maharaj and van Eeden, 2018). It
is worth noting that the investment magnitude in the 4th Industrial Revolution should yield a significant return in the
form of economic and social development as this could result in increased investment in high-growth technologies
or corporations, higher technology expenditure e.g. Tablets, wearable smart devices and an increase in
technological exports of services and products to other African countries.
For governments, the 4th Industrial Revolution creates great and interlinked opportunities such as enhanced
access to high quality services, increased transparency, confidence and social harmony, a focus on intimacy at
scale and lowered service delivery costs, but there are also a variety of risks that need to be managed effectively,
such as infringement of civil liberties, regulatory compliance and a high rate of employee layoff. Making meaningful
decisions and taking action is critical in achieving our set objectives of harnessing the 4th Industrial Revolution
benefits (Manda and Backhouse, 2017).
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South Africans have a chance to learn from one another on how to use the 4th Industrial Revolution technologies
that are able to shape a better future for both South Africa and Africa. This can only be done if South Africans can
acknowledge that the 4th Industrial Revolution is not a sector issue and must be considered as part of a national
conversation. The economic effect of the 4th Industrial Revolution on individual industries has to be
considered because it has the ability to boost sustainable and inclusive growth or to exacerbate our economic
development (Lombard, 2017). South Africa needs to aggressively counteract detrimental effects and take
advantage of opportunities in the short and long term through an organised and consented national framework to
deal with the 4th Industrial Revolution.
Repositioning South Africa as a leading nation on 4th Industrial Revolution in Africa and addressing all that is
required to be ready for implementation is very important. South Africans should never allow the next generation
to inherit a nation that is less habitable than what they inherited themselves, and should not stand by whilst their
nation struggles to adapt to a fast-paced evolving world (Manda and Ben Dhaou, 2019).
There is another great opportunity for South Africa and Africa in the 4th Industrial Revolution which is how to use
data to drive financial inclusion. Various reports by institutions, including the World Bank and the International
Finance Corporation, have demonstrated the advantages of financial inclusion, not only for individuals and
societies, but for economies as a whole. When there is growing consumer spending, it becomes a horse that
moves the economic cart, as it were (Ranchod, 2020). Data is important in helping organisations to locate people
who were previously "credit irrelevant" and make them creditworthy, thus enabling them to access formal economic
systems and create credit profiles. The Aite Group study revealed that organisations are putting an increasing
importance on the value of enlarging sources of data to also include non-traditional, third party and alternative
data. Over the next 2 years, 89% of organisations are preparing to use alternative data such as mobile data, buying
habits and even social media data (Manda, 2017).
Integrating data from across consumer's credit history provides a rich source of understanding. The challenge is
to obtain, prepare and manage the appropriate information. If South African financial corporations can do this right,
then South Africa will witness the promised difference that the 4th Industrial Revolution can make in people's lives.
4.5 The 4th Industrial Revolution and AI in Economic Growth and Social Development
As we learnt in Unit 2, AI can perform many tasks that humans cannot even dream to master because of concerns
surrounding safety and complexity. This is great news for corporates who can use AI in the 4th Industrial Revolution
to cut costs and increase the efficiency of their services. However, AI in the 4th Industrial Revolution has capabilities
that could also be used to achieve social good. This means that in the 4th Industrial Revolution the use of AI can
provide solutions to those seemingly impossible problems that we collectively face (Manda, 2017).
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Global analysts warn that "digitalisation comes with potential issues and vulnerabilities that make people subject to
data manipulation and cyber-attacks, even before a fully automated revolution such as the Internet of Things
(IoT) and artificial intelligence becomes a daily reality." Karen, a global analyst, alludes to the City Power
Johannesburg ransomware attack in July 2019 as just one example of the South Africa being attacked before it
has even got on its feet with the 4th Industrial Revolution (Ranchod, 2020).
4.6 The 4th Industrial Revolution’s use of AI in Manufacturing, Maintenance and Distribution.
AI is making meaningful improvements in the manufacturing and distribution of goods, significantly reducing costs.
AI takes automation to a level we have not witnessed before in the past. Traditional automation tremendously
improved productivity and profits for corporates. For example, after the introduction of the conveyor belt, workers
need not move about on the factory floor to collect tools and supplies. This increased time-on-task for factory
workers has boosted productivity. Robots – especially those robots controlled by computer software − boosted
productivity (Agrawal, Gans and Goldfarb, 2019). They could do menial jobs better than humans and could
accomplish tasks that were simply too dangerous to be performed by a human. However, AI-powered automation
generates even greater efficiency and productivity at a much lower cost. Let us consider some examples:
4.6.1. An intelligent robot arm on the factory floor.

Conventional robotic arms have been used in factories to perform many tasks such as installing gearboxes and
windshields in the assembly line. However, engineers had to pre-program them to perform specific tasks. When
the task changes, engineers had to re-program these robots. A Tokyo-based factory is using a new kind of robotic
arm that can learn new tricks in a few hours. In partnership with software-maker Preferred Networks, Fanuc (both
based in Japan), has developed intelligent robot arms that are self-aware and can adapt on their own (Popenici
and Kerr, 2017). This is a new type of robotic arms that can learn and adjust their actions on the go. Fitted with
sensors, cameras and machine learning software, these arms can, on their own, decide the most efficient ways to
pick up objects and set them down somewhere else. Because these arms use deep learning algorithms, they can
learn new techniques required for a new task, on their own, in a few hours. No explicit programming is required.
Furthermore, once one robot learns a task, it can share its knowledge with other robots in the network (Siau and
Yang, 2017).
Video activity 4.2

Watch this video to understand how the intelligent robot arm works and
discuss how this has changed the world?
https://youtu.be/4TOotC_Q3sU
MANCOSA 91
4.6.2. Collaborative Robots

In the 4th Industrial Revolution humans and robots collaborate on the same factory floor. Conventional robots
performed a great deal of work in the factory, such as highly repetitive tasks, heavy lifting, and injurious work.
Because they were automated but unintelligent, they posed a threat to human beings and were made to work
alone behind protective barriers (Cockburn, Henderson and Stern, 2018).
Yet, there are some tasks that require the human hand. How can humans work side by side with conventional
robots? With AI in the 4th Industrial Revolution there is a solution. Companies such as Rethink Robotics, founded
by robotics and AI scientist, Rodney Brooks, have developed collaborative robots that come with built-in sensors
that enable them to perceive a range of objects and avoid knocking people around. Factories that use collaborative
robots often share the work between the robot and the human worker, “working side by side, performing tasks best
suited to their abilities” (Dougherty & Wilson, 2018: 22). See an example of collaborative robot on figure 4.3 below.
1718Figure 4.3, Collaborative robots

(Dougherty & Wilson, 2018: 22)
Video activity 4.3

Watch the video using the link below to understand how the collaborative robots
work.
https://youtu.be/Sb6JjH3Kn34
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4.6.3. Self-Adapting Assembly Lines

In the 4th Industrial Revolution, AI can reconfigure the assembly lines in many other ways. Engineers are
experimenting with the idea of self-adapting assembly lines in car plants. Engineers at the Fraunhofer Institute of
Material Flow and Logistics (IML) have been testing embedded sensors that will collect the data required to have
the assembly line modify itself to produce more customisable cars. If these efforts succeed, engineers will not
simply design an assembly line to make one type of car at a time. Instead, these lines can adapt in response to
new demands. The potential benefits of using AI in smart factories are simply too many. One might be inclined to
think that with AI, components of the factory can communicate when and where weakness is developing, and
preventive measures can be taken before the factory comes to a complete stop (Arel, Rose and Karnowski, 2010).
19Figure 4.4: Self-adapting assembly line

(Dougherty & Wilson, 2018)
4.6.4. An AI-Based System for Factory Maintenance Work In The 4th Industrial Revolution
In addition to using robots in the factory, companies in full adoption of the 4th Industrial Revolution are using AI
systems to provide innovative maintenance to equipment. For instance, General Electric uses its AI-enabled
system called Predix to keep track of its products in the field. The system employs a “digital twin” concept to monitor
all assets of a factory and beyond. All assets are modelled on a computer
Predix gathers and manages a lot of data and has enabled innovative maintenance of parts. Instead of the
traditional scheduled maintenance, every x-number of miles, checks, and replacement are now done in a flexible
waI as to when needed. Predix frees up human workers to do less routine work and more engaging work and it
lowers business costs (Ongsulee, 2017).
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4.7 The 4th Industrial Revolution in Business

In the area of finance, banking, insurance and wealth management, the AI systems in the 4th Industrial Revolution
work by collaborating with humans. Algorithms offer innovative, customised products and services. Large
organisations and some individuals are turning to algorithms for automated trading. Known as algorithmic trading
(or algo-trading in short), automated trading is already performing better than humans.
4.7.1 Marketing
In 5 to 10 years, we are estimated to be fully in the 4IR, which will ultimately lead to more and more prominent new
and evolving technologies in the world of the B2B. It will have an effect on key qualities that are fundamental to the
company today; more equipment works for us; new communication strategies will allow us to connect rapidly to a
wider audience. Virtual Reality (VR) and Artificial Intelligence (AI) are examples of innovations that form the 4IR.
VR is a great example of a new technology device that affects the way we market and work. When a company is
introducing a new product to the market, for instance, VR is a valuable tool as it allows their consumers to connect
more closely and interactively with the product.
In this prospective way of business, the transformation of the brand will be important and technologies such as VR
will be vital. Your brand is your business and should reflect who you are and your future ambitions. It is advised
that people in the area of film, animation and other visual and multimedia technologies introduce a variety of
upcoming and new marketing techniques. Creativity and innovation should be one of the key principles. Making
sure that the company embraces transition to effectively show that the business and the management choose the
best technologies for the business. Ultimately, the 4th Industrial Revolution is a move that should be planned by
many organisations. To be effective, companies must ensure that they revive the way their products are being
placed on the market. It will become more about creating a story and experience for your customers through key
methods such as VR and AI.
4.7.2 Supply chain

Disruptive innovations change all end to end phases in production and business models in most industries in the
economy. Products, processes and ecosystems demanded by customers, and management of International supply
chains are being reformed to a degree of unparalleled dynamics and unprecedented pace. Consulted industry
leaders believe modern technological solutions, such as advanced robotics, autonomous systems and additive
manufacturing, promoted by the Fourth Industrial Revolution will revolutionise traditional methods of value creation.
With the cost of deploying technology continuing to decrease, international labour cost differentials no longer play
a decisive role in choosing the production location.
The resulting increased spatial and time flexibility created by technology will put production and sales locations
closer together and will lead to significant changes in the design of future supply and value chains. These patterns
are changing the nature and shape of globalisation, affecting the path of goods. In the detriment of intercontinental
trade, local and regional flows will become more significant.
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The Fourth Industrial Revolution not only changes the way we oversee the supply chain and the technologies it
brings, but also establishes the way for new value chains to be built. In the various phases of its value chain, digital
connectivity opens up completely new forms of collaboration among corporations. The following advancements
are expected to play a significant role in this process going into the future:
 Open innovation, i.e. increased participation of companies in design and innovation processes, with the
participation of the other corporations and their clients
 Distributed manufacturing as a means of integral decentralisation and the removal of classical
manufacturing paradigms
 New models, mainly horizontally but also vertically, of cooperation among businesses
4.7.3 Logistics
The 4th Industrial Revolution influences the logistics industry as well. The development of existing goods and
services, and also a fundamental change in the manner of the production and distribution of logistics services,
could result in new business models in the field of supply chain management. The four components namely;
"customer", "performance", "value creation" and "profit model" are critical features of business models and
reinforce the fact that a creative or new business model should not be constricted to product innovation and novel
services. The new business models, presently under discussion and improvement, would have been inconceivable
without digitalisation. Two characteristic features of modern business models in logistics are the extensive use of
data and the physical interrelation of all stakeholders in the value chain. In order to adapt to the paradigm shifts
that the 4th Industrial Revolution has already initiated or triggered, logistics service providers (LSP) will have to
reinvent themselves as technological institutions. Third-and fourth-party logistics service providers (3PL and 4PL)
ought to establish and launch new business models that can support their evolving, existing and new customer
base. The consequent transformation of the logistics sector is predicted to further blur the lines between
manufacturing, retail and logistics. Logistics service providers have to identify their strategic blueprint on how to
react internally and externally to the digitalisation in logistics and supply chain management. Decisions must be
taken about whether to extend current business models or to develop new business models. An immense potential
for LSPs that emerges in the broader context of digital transformation arises from their experience in the
orchestration of complex supply and manufacturing networks.
Orchestrating is a central skill in the globalised society. Operations such as final product assembly and product
design have been the initial step for the reinvention of the conventional logistics market.
4.7.4 Human Resources

Ignore the paper-based CVs – they are relics of the past. Experience and competencies should be in a modern,
searchable form. Platforms such as LinkedIn have now replaced CVs for many people where information is already
recorded and available. One should be advised that abilities, expertise and knowledge are beginning to become
immutable in blockchain. Candidates would no longer be able to disregard work that they did not end well,
exaggerate or concoct anything.
MANCOSA 95
Artificial intelligence (AI) and machine learning are invading human space and improving the skills of HR
practitioners. AI is increasingly being used to align expertise and experience with requirements. Those that do not
use the appropriate search words and tags are easily dismissed. The robots are already administering the first
interview in a process. It is constructive rather than detrimental, because robots reduce the discrimination in the
recruiting process. If you think racism doesn't happen, consider 70 percent of Americans say they have witnessed
it in the recruitment process, and we know it is also very real in South Africa. Another important argument is that
geography is no longer an obstacle in linking skilled people to employment possibilities. Interviews on video
conferences allow for the acquisition of talent that would have traditionally been omitted due to distance.
Individuals are no longer going to have a 35-year career. This prevailed when people died in their sixties, when
the first human to live for 120 years was born. We lead longer and happier lives, which ensures that our jobs will
have to last longer. However, jobs are evolving so rapidly that the half-life of a technology job is now just 18 months,
and most of the industry jobs are only 30 months, which is why there is a need to keep learning and unlearning.
So the real issue of Human Resource Management in the 4th Industrial Revolution is managing employees, not
lost jobs. It is as if we are preparing our youth for the Olympic games, but we still do not even know which event
they are going to take part in.
Many workers in positions currently under pressure would have the chance to prepare for some of the new positions
that exist and for others that have yet to be developed. Deloitte anticipates the increase of ‘superjobs', integrating
jobs that were initially separate and enhancing them with advanced technologies. Such hybrid positions may
include integrating technical skills such as coding and data processing with interpersonal skills such as
communication, teamwork and curiosity. The best part for human resources practitioners is that they are no longer
the guardians of learning. Individuals are now enhancing their own competence with training from Udemy,
Coursera, LinkedIn Learning, and other online portals.
The role of human resources on this front would be to have forums to keep track of who has mastered what skills
and to ensure that opportunities are built to obtain useful relevant experience.
Human resource professionals need to keep abreast of technological progress and consider which technologies
will boost their efficiency and performance. If you believe your industry or company is exempt from the 4th Industrial
Revolution, think again. All would be influenced by the changes brought on by the 4th Industrial Revolution, from
agriculture and government to education and manufacturing.
Video activity 4.3

Using the video link below, Watch the following video to learn about algo-
trading and answer the question that follows
https://www.youtube.com/watch?v=ezom23o2boM
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What is Algorithm Trading? The following 4th Industrial Revolution case studies demonstrate the use of intelligent
systems in the financial services sector. Answer the questions that follow.
Case study 4.1 Intelligent systems for rewarding healthy behaviours

In South Africa, a good example is Discovery, one of the country’s leading
insurers. The company uses its Vitality platform to provide economic rewards
to clients through discounts on gym memberships, healthy food, travel,
entertainment, sports equipment, health products, and so on. The incentives
are based on whether clients engage in healthy behaviours. Members earn
points by swiping the company’s Vitality card.
How does vitality rewards ensure and boost economic activity?

The following 4th Industrial Revolution case studies demonstrate the use of
intelligent systems in the financial services sector. Answer the questions that
follow.
Case study 4.2 Robo-advisory in finance

Algorithms have already been used with success in the area of financial
advisory and wealth management. Allan Gray, a firm using AI-powered robot
advisors, is changing the way financial business advisory is conducted. The
firm uses “robo-advisors”, an AI-based system of intelligence that offers
personalised wealth management advisory that has replaced hundreds of
experts, and is better than humans at the job, with diminished costs. Allan
Gray's clientele is diverse, and all age-groups are represented. In 18 months,
Allan Gray's assets under management expanded from R7.3 billion to R13.6
billion.
Are Robo-Advisors beneficial?
Video activity 4.4

Watch the following video to learn more about robo-advisors and answer the
question that follows:
https://www.youtube.com/watch?v=L90ywD3vc1s
What did studies predict about 2020?
MANCOSA 97
With AI in the 4th Industrial Revolution, factories are getting smarter. Factories are becoming self-aware. Equipment
in the factory can now communicate when a part needs replacement, and this avoids unscheduled (forced)
maintenance shutdowns. In the 4th Industrial Revolution the factory is connected to the whole supply chain (which
comprises suppliers of source materials, manufacturers, providers of services and end-users). With AI, the
authenticity of supplies, e.g., whether or not vegetables have truly originated from an organic farm, can be
ascertained. Therefore, in the 4th Industrial Revolution trust is increased throughout the supply chain. In the factory,
in 4th Industrial Revolution maintenance is easier and frees up time to allow human experts to engage in less
routine tasks (Greenman, 2017).
In the previous section, we looked at how regional developments such as Silicon Valley have contributed to and
have been a catalyst for AI innovation and development in the 4th Industrial Revolution. The previous section also
looked at the 4th Industrial Revolution in manufacturing which has enabled manufacturing efficiency in businesses
of today and of the future. This section will look at the ways in which AI in the 4th Industrial Revolution is being used
to solve real-life problems and how it applies to different areas of human life (Hwang, 2018).
4.8 The 4th Industrial Revolution and AI in Solving Real-World Problems
4.8.1. Tackling World Hunger with AI

Food Security and the 4th Industrial Revolution
AI could end the problem of hunger. Worldwide, more than 30% of all food produced goes to waste. The food
wasted in developed countries alone is nearly sufficient to feed all hungry mouths in sub-Saharan Africa. AI can
be used to 3D print food waste. Such food can then be transported to regions with hunger (Luo, Tong, Fang and
Qu, 2019).
Video activity 4.5
Watch the video using the link below to understand the 3D printing of food
waste in developed countries. Answer the question that follow.
https://www.youtube.com/watch?v=mJ3jD12Kagk
Will this improve security in the world?
Changing weather patterns and climate change has been cited as one of the causes of hunger in the region. When
applied to supply chains, from farm to fork, AI could end the problem of hunger. For example, precision agriculture
could reduce wastages (of water and fertiliser) in many countries, and the benefits from the efficient production of
food could end hunger (Jackson, 2019).
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Precision Agriculture in the 4th Industrial Revolution

Precision agriculture uses AI data collected from sensors in the field to provide information about the state of crops.
It has the potential to significantly diminish waste of inputs such as water and fertiliser, and boost overall efficiency
with regards to farming.
Video activity 4.6

What is precision agriculture? Answer this question after watching the following
video:
https://www.youtube.com/watch?v=581Kx8wzTM
Think point 4.1

Why it is a likely answer to climate change and food security?
4.8.2. The 4th Industrial Revolution in Health and Well-Being

AI could identify potential signs of deadly diseases at the early stages where interventions could prevent disease.
Furthermore, early diagnoses could save countries lots of money since prevention is better than cure.
Faster, more accurate diagnoses

In medicine, AI-powered machines are doing a good job of diagnosing disease and they are better than human
radiologists. Scientists at Houston Methodist Hospital use AI software to interpret results of breast X-rays 30 times
faster than doctors and with 99% accuracy. Contrastingly, unnecessary biopsies occur nearly 20% of the time
when human experts review mammograms (X-rays from machines used to diagnose and locate breast tumours).
Many applications of AI in medical diagnoses are being developed and these will make early diagnosis possible.
Wearable AI-enabled gadgets are predicting potential diabetes with 80% more accuracy. Wearable technology
can also help with tracking fitness. However, widespread accessibility of diagnostic gadgets will require more public
and private investments (Li, Hou and Wu, 2017).
Think Point 4.2

Think about how AI in the 4th Industrial Revolution can improve medical
services?
MANCOSA 99
4.8.3. Addressing Environmental Challenges with AI in the 4th Industrial Revolution

AI could provide solutions to the challenge of maintaining and restoring biodiversity. Similarly, AI is being used to
build and maintain infrastructure in hard-to-reach areas such as the seabed.
Have you ever wondered how the African continent has been connected to faster internet? Engineers use AI-
powered equipment to lay fibre optic cables (through which internet messages travel) on the seafloor, many
kilometres deep into the sea. The AI-powered equipment can lay the 4000 kilometres of cable in a few months,
connecting places with high-speed internet. Without AI, the job of laying internet cables underwater will take many
years to complete (Lu and Weng, 2018).
Video activity 4.7

Watch this video to see how high-speed fibre internet cables are laid down on
the seafloor:
https://www.youtube.com/watch?v=_drQT3eMli4
Did this aid Africa in gaining internet access?
Earlier in the module, we learnt about group intelligence. A school of fish or swarm of locusts represent this type
of intelligence. In the 4th Industrial Revolution AI uses this type of intelligence to work on complex tasks that require
collaboration among AI systems. Drones can work together in the sky, sharing technology to collectively
accomplish a task. Swarm technology can be used to perform tasks that are dangerous for humans, including
crisis response during climate-induced and human-made disasters (Pabbathi, 2018).
Think point 4.3

Can a thousand tiny swarming robots aid humans in solving nature crises

Examples of the use of AI in solving environmental challenges:
 Farm Drive is a start-up that draws on AI and machine learning to
assist creditworthy farmers in Kenya to get access to finance.
 Sowing App has been developed through a partnership between
Microsoft and ICRISAT to help farmers to sow based on feedback on
optimal weather conditions. The Sowing App uses AI to predict the
best weather conditions for farmers to sow, and the AI interface draws
on existing weather forecasting data to formulate these predictions.
Click here to read more about this initiative.
How is your country using AI and machine learning to help the poor?
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4.9 Summary
This section sought to highlight some of the global trends in advances made because of AI, highlighting some
major global actors found in Silicon Valley. The name “Silicon Valley” was a reference to a large number of high-
tech manufacturers and innovators of the silicon chip that were present in this region. Silicon Valley refers to the
geographical area, a region in the southern part of San Francisco in the bay area in Northern California. But, Silicon
Valley is more than a geographical area. Silicon Valley is believed to be the international standard for regional
development in high technology and wealth creation and some of the top Silicon Valley companies include Apple,
Google and Facebook.
The use of algorithms has been prevalent, especially in the internet-based application companies such as Google,
Facebook and Netflix. These companies use algorithms to curate personalised and unique experiences for
individuals based on their internet history. All these companies are found in Silicon Valley and have consolidated
Silicon Valley as the global centre of innovation and are now riding the AI wave to further entrench this. One can
argue that Silicon Valley has been responsible for the re-emergence of AI after the long AI winters.
Through creating more powerful computers that enable AI innovation and research, Silicon Valley has been the
heart of the global IT revolution as we know it and is currently being replicated in other parts of the world such as
in Austria, Germany and India. AI technology is being used to respond to real-world challenges such as in the
world of manufacturing.
This unit sought to highlight some of the global trends in advances made because of artificial intelligence (AI). AI
is now being used in different areas of life. In this section, we looked at how AI is used in business and in health.
We looked at how South African is harnessing the 4th Industrial Revolution and the steps taken to at least try to be
a leader of 4th Industrial Revolution in Africa. We also looked at how AI is used to tackle world hunger, food security
and address the world’s environmental challenges. In business, we see AI technology being used by companies
such as Discovery to secure a space in the healthy-living market by rewarding the healthy living habits of its
customers.
The technology used to do this is referred to as “wearable technology”, with the most prominent being the Fitbit
watch. Fitbit is also a company based in Silicon Valley. AI has improved the way medical professionals diagnose
illnesses, with diagnosis being more accurate and performed in a much quicker time. Of course, this does not
come without its challenges. Such technologies available to most people and its widespread use and accessibility
will require more public and private funding.
In addition, AI technology has been used to tackle environmental challenges through tackling complex tasks and
performs tasks that are dangerous for humans. One example being the Boeing’s Echo voyager, which is an
unmanned deep-sea robot that inspects underwater infrastructures, takes water samples, creates maps of the
ocean floor and aids in oil and gas exploration. Of course, we must remember that AI comes with its limitations.
For instance, AI still cannot reproduce human feelings such as empathy and AI cannot discover new knowledge.
MANCOSA 101
Knowledge checks 4.1

Question 1
Match the statement below to the correct answer
Prompts: a) Built-in sensors b) Silicon Valley c) Apple d) Machine learning algorithms
I. A region in the southern part of San Francisco in the Bay area in Northern California.
The name initially referred to a large number of silicon chip innovators and
manufacturers in the region several decades ago.
II. Collaborative robots come with _______________ that enable them to perceive a
range of objects and avoid knocking people around on the factory floor.
III. ___________________ are at work from the time you wake up to the time you fall
asleep and continue to work after you have fallen asleep. For example, you may
receive recommendations for movies or shows based on your viewing behaviours
and patterns.
IV. A big-tech firm from Silicon Valley.
Question 2
A leading AI scientist, entrepreneur, and the former President of Google China.
A. Bill Gates
B. Alan Turin
C. Kai-Fu Lee
D. Albert Einstein
Question 3
Machine learning algorithms are at work from the time you wake up to the time you fall asleep
and continue to work after you have fallen asleep. For example, you may receive
recommendations for movies or shows based on your viewing behaviours and patterns. True
or false?
Question 4
Match the statement below to the correct with the correct example of AI manufacturing and
maintenance.
Prompts: a) Collaborative robots b) An intelligent arm on the factory floor c) Self-adapting
assembly lines
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A. Conventional robotic arms have been used in factories to perform many tasks such
as installing gearboxes and windshields in the assembly line. Fitted with sensors,
cameras, and machine-learning software, these arms can think on their own.
B. Human workers can effectively collaborate with a self-aware robot arm. For example,
a worker building up a car can collaborate with the robot to install the dashboard of
the car.
C. Components of the factory can communicate with one another when and where
weakness is developing.
Question 5
Silicon Valley is known for producing computer processors and microcomputers. True or
false?
Question 6
Algorithms have already been used with success in the area of financial advisory and wealth
management. True or false?
Question 7
AI is bad at analysing and generating outputs. True or false?
Question 8
Wearable AI-enabled gadgets are predicting potential diabetes with 80% accuracy. True or
false?
Unit 4: Revision question

1. How can technology reduce youth unemployment?
Answers to activities
Video activity 4.1
Silicon Valley is an almost three trillion-dollar neighbourhood thanks to companies like Apple, Google and Tesla,
but it wasn't always this way. In the late 1800s, San Francisco's port helped to make it a hub of the early telegraph
and radio industries. In 1909 San Jose became the home of one of the country's first radio stations. In 1933 the
Navy purchased Moffett Field to dock and maintain the USS Macon.
MANCOSA 103
This made Moffett Field a major hub for the early days of the aerospace industry. Many scientists and researchers
all found work in the area. In 1939 the Ames Research Centre was founded in the area and it became home to the
world's largest wind tunnel in 1949. Also, in 1939 William Hewlett and David Packard, founded Hewlett Packard in
Palo Alto which originally made oscillators. Then during World War 2. Hewlett-Packard made radar and artillery
technology. At this point, computers were about the size of a room. In the 1940s William Shockley co-invented the
transistor while at Bell Labs, the transistor is now known as the computer processor. In 1956 Shockley left Bell and
founded his own company. Shockley Semiconductor labs was the first company to make transistors out of silicon
and not germanium. The company was founded in Mountain View California. In order for Shockley to be closer to
his sick mother, Shockley’s company employed many recent graduates from Stanford in 1957. Eight Shockley
employees grew tired of his demeanour and left the company. Shockley called this group the traitorous eight. They
partnered with Sherman Fairchild to create Fairchild Semiconductor. In the early 1960s Fairchild helped make
computer components for the Apollo program.
Later in the decade many of the traitorous eight left Fairchild including Gordon Moore and Robert Noyce who in
1968 founded their own company in Santa Clara called Intel. Soon after other ex-Fairchild employees and traders
consisting of eight members helped found AMD and Venture Fund Kleiner Perkins. In 1969, the Stanford Research
Institute became one of the four nodes of ARPANET, a government research project that would go on to become
the Internet. In 1970 Xerox opened up PARC lab in Palo Alto. PARC invented early computing tech including
Ethernet computing and the graphical user interface. In 1971 journalist Don Hofer titled a three-part report on the
semiconductor industry, Silicon Valley USA. The name stuck. In the 1970s companies like Atari, Apple and Oracle
were all founded in the area. In the 1980s Silicon Valley became the widely accepted centre of the computer
industry. eBay, Yahoo, PayPal and Google are just some of the companies founded in the area in the 1990s, with
Facebook, Twitter, Uber and Tesla joining them The growth of the tech industry in the following decade, in the
area, continues to this day.
Practical application 4.1: Consider Siri, Alexa, Bluetooth, Aux, 5G network, Shazam.
Video activity 4.2: Consider how it used to be difficult for people to carry things around the factory, how fatigue
hindered efficiency and productivity and how the intelligent arm has helped in this regard.
Video activity 4.3: Algorithm Trading is a system of trading which facilitates transaction decision making in the
financial markets using advanced mathematical tools. A trading system that utilises very advanced mathematical
models for making transaction decisions in the financial markets. The strict rules built into the model attempt to
determine the optimal time for an order to be place. That will cause the least amount of impact on a stock's price,
large blocks of shares are usually purchased by dividing the large share block into smaller lots and allowing the
complex algorithms to decide when the smaller blocks are to be purchased.
104 MANCOSA
In this type of a system the need for human traders’ intervention is minimised and thus the decision making is very
quick. This enables the system to take advantage of any profit-making opportunities arising in the market much
before a human trader can even spot them, as the large institutional investors deal in a large amount of shares
they are the ones who make a large use of Algorithmic Trading. It is also popular by the terms of Algo Trading,
Blackbox Trading etc. and is highly technologically driven. It has become increasingly popular over the last few
years.
Case study 4.1: As you answer this, think about how discounts encourage spending on travel, gym, sports and
entertainment.
Case study 4.2: Consider both sides of the coin i.e. the saving of the employment cost to the firm and secondly
the loss of jobs by the employees and present a well-balanced argument on whether the introduction of Robo
advisors is beneficial.
Video activity 4.4: Studies assumed the Robo Advisors or digital advice market as they call it will swell to 500
billion dollars by 2020 and traditional investing firms like Fidelity, Schwab and Vanguard will control a huge chunk
consisting of two thirds of all the assets in the market. Currently the typical customer is between 35 and 45 years
old and has an average account balance between twenty thousand and one hundred thousand dollars. That's a
lot less money than financial advisors are used to managing. So is there still a place for people in a digital advisor
world? Well probably if they learn to use robot technology as part of their services. You see Robo Advisors have
yet to experience a true bear market, they haven't had panic clients watch their savings and investments circle the
drain.
That day will come, it always does and the need for a real person with expertise on the other end of the phone will
be there, but who or what will be on the other end of that line is the multitrillion dollar question facing investors,
advisors and money management companies around the world?
Video activity 4.5: Consider how much food is saved and not thrown away but instead preserved and sent to
regions in dire need of food.
Video activity 4.6: (What is the precision agriculture?) and Think point 4.1 (Why is it a likely answer to climate
change and food security): With Precision Agriculture, farmers need to know precisely what inputs are needed
where, in what amount and when. This requires collecting a lot of information from different sources and in different
parts of the field on things like soil nutrients, the presence of pests and weeds the level of greenness of the plants,
inputs applied and the weather forecast. Once collected this information needs to be analysed to produce
agronomic recommendations.
MANCOSA 105
For instance, given the developmental stage of a plant it’s level of greenness may reveal its nutritional needs. This
information combined with the characteristics of the soil where the plant is located, and a forecast of the weather
can be used to determine how much of a certain fertilizer should be applied to that plant the next day, delivering
agronomic recommendations on time to farmers and ensuring they're able to apply these recommendations is key.
Farmers need to have all the necessary inputs at hand and be able to translate the recommendations into actions
in the field, to solve this problem big farmers use sophisticated machinery that collects geo referenced information
on soil characteristics, yields and greenness of the plants. These machines are often connected to the Internet and
send the information automatically to AG Big Data firms that analyse the information and send agronomic
instructions back to the machines which are able to automatically apply them in the field, for instance, using robotic
devices attached to G.P.S. guided tractors. However, solutions like these may be economically infeasible for
medium and small-scale farmers. These farmers lack the scale to afford that sophisticated machinery, lack the
knowledge to operate the non-automatic aspects of the machines and lack the resources to hire a person who
knows how to do it. Sometimes many of the necessary complements are not readily available or there is no
connection to the Internet or there are not sufficiently skilled workers. However, a number of solutions are being
developed to many of the problems that medium and small-scale farmers face when trying to implement precision
agriculture of technologies. Easy to operate economic sensors to measure soil humidity, salinity and nutrient
content. Portable networks to transmit the data collected by field sensors to a central location as well as economic
ways to connect to the Internet. Remote Sensing through the use of satellite imagery to assess the health status
of plants in an economic way and without requiring that producers know how to operate a device or interpret
complex data. The new sharing economy is creating opportunities for farmers to just pay for the services they need
whenever they need them, very similar to the way that Uber operates and there are many firms competing to
provide other services such as drones, data analytics and forecasting, all of these technological developments are
pieces of a puzzle that needs to be put together to make precision agriculture a real option for medium and small-
scale producers.
Think Point 4.2: Consider improved x-ray speed in giving results, wearable health tracking devices, new medicines
and accuracy of results.
Video activity 4.7: Think about how slow the internet would be without the high speed fibre cables and how difficult
it would be to access internet at all.
Think point 4.3: Consider how Swarm technology can be used to perform tasks that are dangerous for humans,
including crisis response during climate-induced and human-made disasters.
Practical application 4.2: Consider how the government uses micro finance, Sassa grants application, Nsfas
distribution of funds and devices to the poor.
106 MANCOSA
Knowledge checks 4.1:

Question 1: i. Silicon Valley ii. Built-in sensors iii. Machine learning algorithms iv)
Question 2: C. Kai-Fu Lee
Question 3: True
Question 4: i. An intelligent arm on the factory floor Collaborative robots
Question 5: True
Question 6: True
Question 7: True
Question 8: True
MANCOSA 107
Unit
5: The Future of the job market
in the World
108 MANCOSA
5.2 Overview: Automation  Describe what is automation
5.3 Automation Before the Age of AI:  Examine automation before the age of AI: impacts on jobs
Impacts on Jobs and the Labour and the labour market
Market
5.4 General Purpose Technologies  Understand general purpose technologies
5.5 Automation in the Age of AI: Is this  Discuss automation in the age of AI and if the time is
Time Different? different
5.6 Automation in the 4IR is AI-Enabled,  Understand automation in the AIR is AL-Enabled,
Algorithms and Drive Automation in Algorithms and drive automation in the 4IR
The 4IR
5.7 What is the Scope of Technology-  Identify the scope of technology induced job losses
Induced Job Losses?
5.8 What is the Future of your Job in the  Examine the future of your job in the Age of AI
Age of AI?
5.9 The Workforce of the AI Era  Discuss the workforce of the AI Era
MANCOSA 109

 Schwab, K. 2017. The fourth industrial revolution. Currency.
 Johannessen, J.A (2018). The Workplace of the Future: The Fourth Industrial
Revolution, the Precariat and the Death of Hierarchies. Routledge.
 Li, G., Hou, Y. & Wu, A. (2017). Fourth Industrial Revolution: Technological
Drivers, Impacts and Coping Methods. Chinese Geographical Science, 27(4):
626-637.
 Lu, H.P. and Weng, C.I. (2018). Smart manufacturing technology, market
maturity analysis and technology roadmap in the computer and electronic
product manufacturing industry. Technological Forecasting and Social
Change, 133, pn.85-94.
 Pabbathi, K.K. (2018). Quick Start Guide to Industry 4.0: One-stop reference
guide for Industry 4.0. Kiran Kumar Pabbathi.
 Petropoulos, G. (2018). The impact of artificial intelligence on
employment. Praise for Work in the Digital Age, 119.
 Webb, M. (2019). The impact of artificial intelligence on the labor market.
Available at SSRN 3482150
110 MANCOSA
5.1 Introduction
AI in the 4th Industrial Revolution will transform every industry in Africa in the next few years. The 4th Industrial
Revolution’s AI-powered machines will perform a significant chunk of the work that humans perform now. AI will
change the way we manufacture and deliver goods and services. Unit 5 encourages you to contemplate the future
of work in an AI-driven economy. It traces the impact of automation throughout economic history, from the First
Industrial Revolution to the Fourth Industrial Revolution (4IR).
Unit 5 demonstrates that, historically, the impacts of automation on employment have not been straightforward. In
Unit 5, you will learn that the impacts of AI-driven automation in the 4th Industrial Revolution occur at a rapid pace
and they are widespread.
5.2 Overview: Automation

We tend to think that automation is a modern phenomenon associated with industrial revolutions. However, there
are numerous examples that point to the fact that humans have always attempted to create devices that allow
tasks to be performed efficiently.
Think.point.5.1
20Figure 5.1, The Shaduf

(Petropoulos, 2018)
MANCOSA 111
Practical activity 5.1

Can you imagine how shaduf in figure 5.1 made irrigation tasks much easier
and faster? You would agree that the shaduf led to more harvests and better
nutrition for people?
Here is another misunderstanding associated with automation. Some people tend to think that automation is about
using machines in the process of manufacturing goods. On the contrary, automation is widespread; we interact
with many automated machines in a typical day. The household appliances that we rely on nowadays are all
automated... the dishwasher, washing machine (see figure 5.2), toaster, television, you name it (Siau, 2017).
21Figure 5.2: A dishwasher

(Hwang, 2018)
In the manufacturing sense, the term “automation” was coined in 1948 by one of the senior managers of Ford
Motor Company. At that time, mechanised manufacturing was becoming more and more automated (Razi, 2007).
The year 1948 is the year that the first car equipped with an automatic transmission was made. The automatic
transmission might appear to be a small invention compared to, say, the microprocessor in your personal computer,
but it substantially reduced the number of manipulations the driver has to make, for instance, just to get the car to
move (Carter, 2018).
112 MANCOSA
5.3 Automation Before the Age of AI: Impacts on Jobs and the Labour Market
We call automation before the recent applications of AI, conventional or traditional automation to distinguish it from
AI-driven automated systems that operate more autonomously (i.e., without human intervention). This applies not
only to the first two Industrial Revolutions but also the digital revolution (Third Industrial Revolution).
Conventional automation inevitably resulted in large-scale societal changes in terms of culture and people’s
everyday lives. Furthermore, new job titles with new skills demands emerged. Workers had to learn to perform new
tasks. The figure below summarises the changes in the content of jobs since the introduction of the cotton gin and
other machines in the First Industrial Revolution (Luo, Tong, Fang and Qu, 2019).
22Figure 5.3: Major changes experienced in the content of jobs due to technology prior to the 21st
century (Luo, Tong, Fang and Qu, 2019)
In the face of widespread automation, artisans (highly skilled people) lost jobs. Farmers also had to look for
employment elsewhere. Manufacturing and clerking jobs gained popularity as more and more vacancies opened
in these fields on the back of increasing productivity. With more advances in technology, most clerking and
manufacturing tasks were automated (Penprase, 2018). This meant that fewer people were needed to perform
clerking and manufacturing tasks. In other words, automation reduced the cost of manufacturing and clerking.
Consequently, companies could now afford to create more service and management jobs.
Think point 5.2

"Will a robot take my manufacturing job?" Yes, no, and maybe
Automation in the first two Industrial Revolutions consisted of breaking down an entire job into smaller tasks of
limited complexity, which could be performed repetitively by a low-skilled worker.
This process led to specialisation and division of labour because workers learnt to perform simpler tasks over and
over again. Automation in the first two Industrial Revolutions generally led to deskilling because the process of
simplifying the tasks required in the production of goods and delivery of services meant that people with high-end
skills could not be employed anymore (Popkova, Ragulina and Bogoviz, 2019).
MANCOSA 113
Since the earliest inventions of the First Industrial Revolution, more and more tasks were automated. The
introduction of continuous-flow technology increased the scope of automation leading to further deskilling.
Continuous flow technology refers to multiple processes − for example, in the beverage industry, cleaning the
bottle, filling the bottle with soda or the alcoholic contents, and sealing the bottle with a cork or cap − are integrated
from one end to the other (Landes, 2018). As manufacturing intensified with the use of continuous flow technology
in many sectors such as motor vehicle manufacturing and food production industries, workers lost their high status
and high incomes jobs to take up lower level and less paying jobs with low status. This process of leaving one’s
high-income job for a lower-income job with a low status is known as downward mobility (Peters, 2017).
Think point 5.3
5.4 General Purpose Technologies
Activity 5.1
Ever heard of “general-purpose technologies” (GPTs)?
List at least 3 that changed the world.
According to Lee (2018), GPTs are technologies that affect multiple industries. Lee (2018) suggests that steam
power, electricity and ICTs belong to the category of GPTs. GPTs alter the way we live and work forever. They
enable many inventions which tend to heighten the pace of automation across all sectors. Therefore, GPTs ensure
that manufacturing and trading of goods are done in a great way. GPTs replace human labour through automation
on a large scale, compared to a single technology, e.g., a typewriter (see figure 5.4), but GPTs also lead to the
creation of many new jobs which never existed.
23Figure 5.4, A typewriter

(Peters, 2017)
114 MANCOSA
Let us examine steam technology. Few highly skilled people (known as artisans) lost jobs. However, less skilled
people gained employment on a larger scale. Farmers lost their jobs, but millions of jobs were created for them in
the emerging urban centres. Electricity has had the same effect. The use of electricity in manufacturing created a
whole new range of engineering jobs (Popkova, Ragulina and Bogoviz, 2019).
Although automation led to the loss of jobs and downward mobility, it also created jobs
that never existed (Lu and Weng, 2018). Progress in technology increased the demand for highly-skilled, educated
workers. These jobs are known as white-collar jobs (non-manual, professional jobs often carried out in offices).
Although the progression of technology has contributed to job losses, it has had positive effects on society, for
example: Automation created millions of jobs that require high cognitive skills. Automation had widespread positive
impacts on the development of literacy, educational attainment and overall standards of living (Peters, 2017).
Widespread automation lowers the cost of acquiring technology. Adoption of technology lowers the cost of
producing, therefore, making goods more affordable to many people in society. Today, computers are found in
many homes in urban suburbs (Gleason, 2018).
Conventional automation shaped the structure of the labour market. An example of an aspect of the labour market
is the proportion of high-income jobs or low-end jobs in the formal employment sector. In addition, the share of
manual or cognitive jobs in the employment sector are some of the aspects of the labour market (Hirschi, 2018).
Automation has led to more employment in high-end cognitive jobs (i.e., jobs that require logical and creative
thinking, such as a manager or strategist, as opposed to routine tasks such as operating a machine) and low-end
manual occupations (cleaners, groundsmen). However, automation has resulted in fewer middle-income jobs
(clerks, secretaries, etc.). If you record the number of people employed for each income bracket and you attempt
to create a graph, you will get a graph with a trough in the middle. You will get extremely high numbers in low-
income brackets where groundsmen, gardeners, and cleaners belong to (Glen, 2019). Similarly, you will get more
people in the high-income category which includes jobs for people with higher educational qualifications. There
are very few middle-income jobs as represented by the trough. Thus, the labour market has been polarised due to
automation.
Conventional automation has had noticeable impacts on society. Societal impacts of automation relate to
inequalities between social groups based on income and skills. Major groups of people living under more or less
similar conditions emerged. These are also known as social classes. Prior to the First Industrial Revolution, the
highly skilled artisans were members of guilds or groups of artisans (craftsmen) who worked on jobs on informal
bases (Prisecaru, 2016). With increasing automation and specialisation, people could now pursue careers with
formally recognised skills such as clerking and typing. A new class known as the proletariat, comprising a workforce
of people who depended on waged labour, emerged (van den Berg, 2019).
MANCOSA 115
Video activity 5.1

What is the proletariat? Watch the video below answer the question.
https://www.youtube.com/watch?v=tMATWxYTdPk
Traditional automation is closely associated with the emergence of new inequalities based income status and
educational attainment. Too often, automation meant that those affected must look for employment in low-status
jobs that do not require skills and this creates inequalities based on income and level of education attained.
Historically, people opposed automation when they perceive potential threats to their employment (Glen, 2019).
Think point 5.4
Case study 5.1

Research on Standard Bank South Africa and how automation affected
employment in the bank and attempt to answer the following questions:
Are fears of technology-induced unemployment in the 21st century justified?
Why, or why not?
116 MANCOSA
Case study 5.2
In the McDonalds case study below how did technology affect employment? Are the
ordering kiosk available now near you since it is now 2021?
5.5 Automation in the Age of AI: Is this Time Different?

Let's begin by considering the three (3) questions below:
Think point 5.5

 Is automation in the Fourth Industrial Revolution (4IR) different? Yes,
or no?
 How unique is automation in the 21st century? Very unique? Or, not
unique at all?
 Will automation disrupt employment in novel ways? Yes, or no?
These three questions are at the centre of debates surrounding technological progress in the 21st century. We
address these questions in order to appreciate the impact of AI and automation in the 4IR.
We will start with the views of those who tend to answer “No” to the above questions.
MANCOSA 117
Answer: No! We have experienced automation so many times in the past.

Those who think that despite recent breakthroughs in AI, the story of automation and subsequent impacts on labour
and society is not new, are known as optimists. Optimists look back to the past revolutions and find overwhelming
evidence which shows that the impacts of technology have been positive. Optimists claim that: Throughout
economic history, workers have worried about the introduction of those technologies they perceived as a threat to
their employment; Historically, widespread adoption of technology, especially general-purpose technologies, has
led to profound disruptions. However, society dealt with such disruptions through policy reform and magnified the
positive benefits of technology; and, Technological advancement gave rise to more prosperity and raised the living
standards of society (Huang and Rust, 2018).
Video activity 5.2

Watch this video to understand technological disruptions in the past and
answer the question that follows:
https://www.youtube.com/watch?v=TFqQnYfncCQ
How did the technological disruptions in the past affect humanity?

Optimists believe that, despite recent breakthroughs in AI-driven automation, the story of automation is not new.
Furthermore, the impacts of AI technology on labour and social life will not be different from the effects of
conventional automation on jobs. Optimists think that, generally, automation has had positive impacts on society.
They believe that workers always opposed any technology that threatened their incomes. Furthermore, while
widespread adoption of technology may have disrupted the organisation of labour and the economy, society has
always managed to create policies that maximise the benefits of technology (Huang and Rust, 2018).
Lastly, optimists believe the following:

 Technological progress generally leads to more prosperity and better living standards for many people;
 Technology lowers the cost of production;
 Goods become more affordable for many people; and,
 New economic sectors will emerge (think leisure, for example, a whole industry has emerged around
professional soccer and motorsport) driving up the demand for jobs (Hutson, 2018).
In the end, optimists claim, there are far fewer technology-induced job losses. Let us now review the views of those
on the other side of the aisle, the pessimists.
Answer: Yes! Automation in the 4IR is unique; brace yourselves for more disruptions!
Pessimists think that automation will be "different" this time.
118 MANCOSA
Think point 5.6

Why are so many people worried that AI-driven technology will upset the
labour market as we know it
Video activity 5.3

Watch this video to understand the newfound fears about technology-induced
job losses which mirror the machine-breakers (Luddites) in the First Industrial
Revolution and answer the question that follows:
https://www.youtube.com/watch?v=aIIxM5v2mm4
What are the differences and similarities of the two eras?
5.6 Automation in the 4IR is AI-Enabled. Algorithms Drive Automation in The 4IR.
AI-driven automation, which characterises the Fourth Industrial Revolution, is unique in its impacts on jobs and
society. Conventional automation largely affected manual tasks (that require physical labour). Yet algorithms that
drive AI technology make it possible to automate a wide range of cognitive tasks which require workers to mentally
process, such as processing information and rational decision-making (Došilović , Brčić and Hlupić, 2018).
Another difference is that the adoption of AI is taking place at a faster pace compared to the uptake of technologies
in prior Industrial Revolutions. Unlike past general-purpose technologies where technology transfer occurred at a
snail’s pace, algorithms, which are the engines of AI-driven technologies, can be distributed at no cost. Once
shared, algorithms can be tweaked and improved for free (Siau and Wang, 2018).
Think point 5.7

Now, ask yourself again, are you an optimist or a pessimist when it comes to
the effects of AI technology on the future of work?
MANCOSA 119
5.7 What is the Scope of Technology-Induced Job Losses?

AI will transform the world of work. Here are the broader trends covered in the published literature:
 Machines continue to replace human labour in repetitive tasks (routine) and non-routine cognitive tasks.
 In past revolutions, those who were replaced through automation looked for opportunities in low paying
jobs. In other words, workers replaced by machines moved down the occupational ladder, taking on jobs
traditionally performed by low-skilled workers. This is no longer possible because AI can fully automate
routine tasks performed by low-skilled workers. For example, once accountants, lose jobs to AI-enabled
machines, they will no longer be able to take on menial jobs. Therefore, we will witness white-collar
unemployment (Gluckman, 2018).
 Some economies will experience jobless growth as a result of automation.
 Since AI has no capacity, currently, to fully automate many occupations, automation of some tasks will
free up time for human labour to perform other tasks, for example, creative activities (Morrar, Arman and
Mousa, 2017).
 Because complete automation of cognitive tasks will remain a challenge for AI experts, the workplace of
the future will mainly consist of humans and AI-driven robots (machines), collaborating, each group
working to their strengths (Griffin, 2018).
 More than half of the occupations are vulnerable to automation, but not all tasks of the job will be
automated.
Video activity 5.4

Watch this video to learn more about the scope of technology-induced job
losses:
https://www.youtube.com/watch?v=MMIsbl3DIL8
How do doctors, chefs and drivers use artificial intelligence at work? What kind
of jobs does AI take over?
5.8 What is the Future of your Job in the Age of AI?

Very few jobs are entirely automatable. It makes sense, therefore, to ask which tasks will be automated – Kai-Fu
Lee (2018) has a very good answer. Lee thinks that “AI creates a mixed bag of winners and losers depending on
the exact content of job tasks performed”. This means that in one job, more tasks will be computerised, whereas,
in another, very few tasks are automatable.
Currently, AI can do amazing things. For example, think about a self-driving car. However, the current version of
AI is narrow AI. It is better than humans in specific tasks in a single area, for example, image recognition. However,
narrow AI lacks the capacity to perform in many domains as humans do. Humans can read, understand language,
speak, solve math problems and compose music (Webb, 2019). This is known as cross-domain thinking. AI lacks
cross-domain thinking and struggles with tasks that require creativity and complex planning.
120 MANCOSA
What does this mean for the risk of job replacement? Kai-Fu Lee (2018) says that the risk of job replacement is
different for physical labour, that is, the repetitive tangible and physical execution of tasks and for cognitive labour,
which requires mental processes solve problems that do not necessarily require physical intervention. Cognitive,
non-physical jobs that comprise routine tasks such as accounting and financial advisory have already been
automated. More jobs in this category will be automated. Creative or strategy-based jobs that require mental
processes will remain relatively safe in the near future, even if they do not involve interaction with people. Examples
are a medical researcher, qualitative researcher and artist (Petropoulos, 2018). Jobs that require a lot of human
interaction, such as social worker or wedding planner, have a low risk of replacement because they require a lot
of social interaction even though they require low levels of creativity. Cognitive tasks that can be optimised with
algorithms and data and requires little human interaction are in great danger of replacement. A radiologist and
financial planner are examples (Jackson, 2019).
Jobs that require a significant degree of social interaction will remain relatively safe for a long time. Physical jobs
require movement in a known and structured or an unknown environment. Physical jobs also require social skills
if they involve interacting with people. AI cannot accurately imitate the dexterity (movement) of human fingers.
Therefore, jobs with high dexterity, which require human interaction, are much safer from automation (Pereira and
Romero, 2017).
The risk of replacement in the future is much lower for a stylist or hairstylist, physical therapist or elderly home
caretaker because these jobs require movement of fingers and social skills. Some jobs, which do not require social
skills, e.g., a cleaner and aerospace mechanism, will be difficult to replace. This is because, while such jobs do
require social skills, they require movement of fingers. However, a job that requires movement but is performed in
a structured environment (such as a banking hall) and does not need social skills can be automated easily. An
example of such a job is an automated teller machine (Razi, 2007).
5.9 The Workforce of the AI Era

We included some of the defining aspects of the future workforce in the following bullet points:
 Humans will collaborate with evolving AI machines because partial automation will become widespread.
Currently, only 5% of the occupations are fully automatable. AI can only computerise a portion of the
essential tasks of most jobs. This means that humans will work alongside AI-powered machines
 Some jobs will change. For example, those who work on the warehouse floor can become robot operators
working with a pool of robots, diagnosing them and intervening to resolve stoppages
 Manual work will remain a significant category of the future workforce
 Rapid growth in the demand for high-level technology skills such as programming will be experienced.
 Demand for social, emotional, and higher cognitive skills, such as creativity, critical thinking and complex
information processing will swell
MANCOSA 121
 The structure of most jobs will change from full-time, permanent or temporary to part-time, distributed,
freelance and virtual structure. This is known as the “gig economy”, which is characterised by
impermanent jobs, especially freelance jobs worked over flexible hours. Most people will join the growing
numbers of those who already work in the gig economy. Many more people will work in the sharing
economy, which is another area of the gig economy (Carter, 2018)
An increasingly visible feature of the gig economy is digital talent platforms. Digital platforms divide jobs and tasks
into many smaller tasks known as microtasks and match these with potential employees.
Amazon’s Mechanical Turk (https://www.mturk.com/) is a good example of this. The Mechanical Turk is "a
crowdsourcing marketplace that makes it easier for individuals and businesses to outsource their processes and
jobs to a distributed workforce who can perform these tasks virtually.”
Video activity 5.5

Watch the video to understand the strike at GM UAW
https://www.youtube.com/watch?v=SxELjIUjqLE
Case study 5.3

Why GM UAW Workers are on Strike?
Which tasks will be automated?
When considering which jobs will be replaced, it is important to emphasise the point we have already made, that
is, very few jobs are entirely computer sable. It makes sense, therefore, to ask which tasks will be automated –
Kai-Fu Lee (2018) has a very good answer. Lee thinks that in one job, more tasks will be computerised, whereas,
in another, very few tasks are automatable.
Video activity 5.6

Watch the video to understand what the Ex-Google China President Kai-Fu
Lee says about the impact of AI on jobs.
https://www.youtube.com/watch?v=gKgE4pLuOls
122 MANCOSA
Activity 5.2
What jobs at your work place will be obliterate because of the 4th Industrial
Revolution and AI? How can employees adapt to this?
We are approaching the end of Unit 6, and it is time we asked you a quick
question. Will your (dream) job be replaced in the next few years?
Will AI replace blue collar or white collar jobs
Growing Skills and Emerging Roles in the AI Era

Look at the figure 5.5 and 5.6 below summarising 2022 skills and emerging roles, according to the World Economic
Forum.
24Figure 5.5: Growing skills

(Wang and Siau, 2019)
MANCOSA 123
25Figure 5.6, Emerging and declining roles,

(Gleason, 2018)
Think point 5.8

Do you possess any of the below skills? Does your current or dream job feature in any of
the declining or emerging roles?
Knowledge check 5.1

Question 1
Match the statement with the correct answer below
Prompts: General-purpose technologies (GPTs), Automation, Luddite Fallacy, Cleaner,
Strategist, Cotton Gin
I. The technique, method, or system of operating or controlling a process by highly
automatic means, thereby reducing human intervention.
124 MANCOSA
II. Disruptive technologies that not only affect multiple industries but alter the way
we live and work and heighten the pace of automation. Steam power and
electricity are examples of this type of technology.
III. Apprehensions about perceived technology-induced job losses.
IV. An example of automation in the First Industrial Revolution.
V. An example of a high-end cognitive job.
VI. An example of a low-end manual job.
Question 2
1970 is the year that the first car equipped with an automatic transmission was made. True
or false?
Question 3
Humans will work alongside AI-powered machines in the 4IR. This means that there will
be rapid growth in the demand for high-level technical skills. True or false?
Question 4
Professionals whose work comprises manual and physical labour.
A. White-collar
B. Blue-collar
C. Robot
D. Luddite
Question 5
Techno-optimist or techno-pessimist? Correctly match the statements below.
I. Those who think that despite recent breakthroughs in AI, the story of automation
and subsequent impacts on labour and society is not new.
II. Those who have a problem with the computerisation of non-routine tasks.
III. There is not enough time for humans to adjust as AI-driven technological
advancements are moving at the speed of light.
IV. New economic sectors will emerge, and there will be far fewer technology-
induced job losses.
V. Technological advancement gave rise to more prosperity and raised the living
standards of society.
MANCOSA 125
Question 6
Currently, what % of occupations are fully automatable?
A. 25%
B. 5%
C. 70%
D. 100%
Question 7
A financial planner's job is safe from being automated. True or false?
5.10 Summary
This unit discusses the future of global demography and discusses what effects a reduced labour force might bring
to most advanced economies. Other countries, however, will deal with an expanding younger population concurrent
to decreasing labour market participation rates. The potential inclusion of other groups, such as women and
migrants’, are seen as a solution to counteracting this trend, alongside labour market policy and pension reforms.
For the latter, different studies estimate which occupations will be substituted by automation in both developed and
developing countries. In addition, re-shoring of production from developing to developed countries to utilise
innovation hubs and access markets is highlighted. At the same time, it presents opposing views that argue,
although computerisation might eliminate tasks, it is unlikely that entire occupations will disappear. Furthermore,
several researchers expect that new jobs will appear, in particular for Engineering, Computer and mathematics-
related employments.
Conversely, others believe the overall effects from advancements in genetics, artificial intelligence and robotics
will have a negligible impact on the labour market. Demographic and climate change are also discussed in this
unit. Ageing populations are expected to create additional employment in the health and care sectors, while climate
change is likely to foster employment in green jobs particularly within the renewable energy sector. The effects of
automation in gender and race are also introduced here.
Working conditions in new business models to the future of work are presented and discussed to show their impact
in the new world. Flexible and temporary work, among other forms of non-standard employment, is expected to
become more prevalent in the near future. Many anticipate lower wages, reduced social protection and more work
insecurity to follow. Some studies point out, however, that flexible and remote work will allow marginalised workers
to join the work force, as well as workers with family responsibilities. The impact of the gig economy, entailing
increased preconisation, decreased bargaining power and reduced legal protection, is also highlighted.
126 MANCOSA

1. How will technology change the way we work?
2. How will the fourth industrial revolution impact the future of work?
Practical activity 5.1: Consider how slow watering of crops would have been without the shaduf. Consider how
tired the workers would have been if they were to carry buckets to and from the river. Take into account how the
inefficiencies of watering the plants would have affected the farming productivity and what that would have meant
for food security at the time. Lastly consider the wide spread impact especially to the poor.
Think point 5.2: Think of any job function within a manufacturing set up. Evaluate if that job could be automated.
If it can then definitely it will be taken up by a robot, if not then the robot cannot take it. If the chances are 50/50
then you will work hand in hand with the robot in form of collaborative robots.
Activity 5.1: Steam engine, Electricity, internet.
Video activity 5.1: According to Marxism, proletariat is a working class which has nothing to sell but its labour.
And it is exploited by bourgeoisie in capitalist system. Simply, it is the class who has nothing but its labour, and
who has to sell its labour to bourgeoisie in order to survive. Poor terriers are exploited more than ancient slaves.
Slaves have a master who has to take care of them. Slaves can be sold only one time. On the contrary proletariat
have to sell their labour in order to survive every single day.
And they always have a risk to lose their job. Karl Marx defines proletariat as a class which has nothing to lose but
chains. So how come this class does not destroy capitalism? Bourgeoisie postpones AIDS with AIDS degenerated
culture, mass media, and touts which are planted into socialist ideology by bourgeois ideologues, and revisionist
politicians. But when the day comes, proletariat will be the class who will destroy capitalism. Proletariat will destroy
the system of exploitation and liberate not just itself but whole humanity. Proletariat is a revolutionary, international
and labour class and I want to conclude this with a quotation from Karl Marx: “Workers of the world unite”.
Case Study 5.1: Consider how online banking, automated systems, ICT advances and faster network replaced
repetitive work done by most tellers and bank employees.
Case Study 5.2: Consider the impact of digital system on ordering food and what that means for the cashiers as
the customers can order and pay without having to interact with a person. Consider the setup of McDonalds and
how they renovated their stores to include the kiosks in South Africa.
Think point 5.5: Take into account what AI in the 4th Industrial Revolution means, how it affects our everyday lives.
How it makes tasks simpler. Think about the opportunities it brings and the threats it avails. Consider if these
factors point out to positivity or negativity in the employment of citizens.
MANCOSA 127
Video activity 5. “There will be fewer and fewer jobs that a robot cannot do better”. And what are the people going
to do, that's the 64000-dollar question. This is going to be one of the biggest challenges we face in the coming
decades. People who are not just unemployed they're unemployable. But if you ask economists, they tend to have
a different view from the futurists and Silicon Valley types. There was a spike of automation anxiety in the late 20s
or early 1930s when machines were starting to take over jobs on farms and also in factories. Automation anxiety
surged again in the late 1950s early 1960s. President Kennedy ranks automation first as job challenge. Computers
and automation threatened to create vast unemployment and social unrest. During this period, technology
displaced some 8 million farmers in the U.S., 7 million factory workers, over a million railroad workers, hundreds
of thousands of telephone operators. We've lost gas pumpers, elevator attendants, travel agents, tons of jobs have
died but work persists. What you realise when you look through these old reports is that it's really easy for us to
see the jobs being replaced by machines. It's a lot harder to visualise the jobs that come from what happens next.
New technology creates jobs in a few ways. There are the direct jobs for people who design and maintain the
technology and sometimes whole new industries built on the technology. But the part we tend to forget is the
indirect effect of labour-saving inventions. When companies can do more with less, they can expand, maybe add
new products or open new locations, and they can lower prices to compete. And that means consumers can buy
more of their products. Or if we do not want more of it, we can use the savings to buy other things. Perhaps we go
to more sports events or out to dinner more often, perhaps we get more haircuts or add more day-care for the kids.
This process is how our standard of living has improved over time and it's always required workers. The key is of
economic logic here, automation does indeed displace workers who are doing work that got automated, but it
doesn't actually affect the total number of jobs in the economy because of these offsetting effects. Warnings about
the end of work tend to focus on this part... According to research conducted by Oxford University, nearly half of
all current jobs in America, in fact 47 percent of U.S. jobs in the next decade or two will be replaced by robots. That
study assessed the capabilities of automation technology. It didn't try to estimate the actual extent or pace of
automation, or the overall effect on employment. Now all this does not mean that the new jobs will show up right
away or that they'll be located in the same place or pay the same wage as the ones that were lost. All it means is
that the overall need for human work has not gone away. Technologists and futurists do not deny that's been true
historically, but the question is whether history is a good guide of what is to come. Fundamentally, the argument is
that this time is different. Imagine a form of electricity that could automate all the routine work. So it is going to be
across the board. And it is easy to underestimate technology these days. Labour productivity is a measure of the
goods and services we produce divided by the hours that we work. Over time it goes up. We do more with less
labour and more efficiently. If we were starting to see a large amount of labour-saving innovation, you would expect
this line to get steeper but when you look at productivity growth you can see that it's been slowing down since the
early 2000s and not just for the U.S. It's possible that new technologies are changing our lives without
fundamentally changing the economy. Hence, will this all change with today’s robots and A.I. caused mass
unemployment? There's reason to be sceptical but no one really knows.
128 MANCOSA
Think point 5.6: To: understand this consider the impacts other revolutions had on the employment of people and
analyse why people are fearful and worried. What we have learned from history, is that probably, there will be
enough jobs for people. But they are going to be different jobs than what exist today. And as a result, there are
going to be hundreds of millions of people who need to transition and find new forms of work.
Video activity 5.3: It is not the first time we have seen lives fundamentally restructured by machines. In 19th
century England, an economic recession and a changing fashion and a wave of automation threw thousands of
textile makers out of well-paid jobs. The workers who reacted by violently smashing machinery came to be known
as luddites. The people that became the Luddites, the croppers and the weavers, were the middle class of that
day. That is one of the reasons why they reacted so strongly when automation and machinery came along to take
those jobs away because they were falling from a pretty high height. We are talking about change that in a matter
of a few years wiped out tons and tons of jobs. And so that makes you think about today. After the British
government stamped out the Luddite movement, the textile industry continued to automate unabated, and some
students of history say the Luddites core grievance was not really about machines at all. They were comfortable
with machinery. They had been using tools for years. If technology was going to be used in a way that benefited
everyone, they were happy with it. They saw this, not really as a technological fight but an economic fight. When
the Luddites started breaking machines it was because they had lost their attempt to mitigate the way that economic
change would happen. Today technologists say heavy economic change is coming to jobs that involve mind as
much as muscle. The same way that Google Maps slashed the mental calculations needed to navigate around
town. New systems could soon automate the judgment calls once needed to do stuff like prepare tax returns or
pass legal precedent or make a medical diagnosis. I think that is what makes this time different. So many of us
imagine that a lot of things that require emotional intelligence are inherent to human judgment and intuition. Those
are the things that are inherently human, historically we have never really needed power tools for those things. It
is likely that many people who never considered their work a possibility for automation, will see artificial intelligence
changed their jobs in big ways. To the extent that automation is destroying the routine, uninteresting,
dangerous/hazardous work may be a good thing.
Think point 5.7: Consider how you feel about AI technology on the future of work and take into account if you are
looking forward to it being implemented in the work place.
Video activity 5.4: Doctors are beginning to rely on A.I. for diagnosing disease, machines are taking the wheel
from truck drivers and chefs are handing their labels to robotic line cooks. It doesn't matter whether you're working
in a factory or sitting at a desk or working in the service sector, if you're doing something that is fundamentally
routine and predictable that job is ultimately going to be threatened by machine learning.
MANCOSA 129
Case study 5.3: They say that they are fighting a good fight and it is a reasonable fight. A fight for what they think
is fair. The rebirth of solidarity. Not only in Flint but across America. They say “They should pay for our health care.
We do a lot, the repetition, it wears you down”. The union wants the temporary workers hired. These people are
hard workers and need to be treated fairly. They like to see them get the full wage and benefits. They are making
money and they just need to start sharing with the workers. They went without a raise for almost 11 years with the
bankruptcy. Everybody does the same work and everybody should be getting the same pay and there should be
no inequality at the work place. “We have to fight for the next tier of people out there. We are the last vanguard of
anarchy so that the companies would rule the roost like they did over a hundred years ago” they say. People had
no say-so, and they could be summarily dismissed for any reason.
Video activity 5.6: Well both will happen. A.I will be, at the same time, a replacement for white-collar jobs and be
a great symbiotic tool for doctors, lawyers and you, for example. But the white-collar jobs are easier to take because
they are a pure quantitative analytical process. Let's say reporters, traders, telemarketing telesales, customer
service, analysts, yes these can all be replaced just by a software. To do blue-collar, some of the work requires
hand-eye coordination, things that machines are not yet good enough to do.
Activity 5.2: Consider repetitive tasks that could be learnt by machines and any functions that can be victim to
automation. Workers need to up skill themselves and learn to do jobs that need collaboration with AI e.g.
programming the robots and fixing them to do the tasks that they themselves know better.
Think point 5.8: Take a look at the list provided to find out where you fit. If you think you are not safe then start
thinking about how you are going to make yourself relevant.
Knowledge check 5.1

1. Automation, General-purpose technologies (GPTs), Luddite Fallacy, Cotton Gin, Strategist,
Cleaner
2. False
3. True
4. B. Blue-collar
5. i. Techno-optimist,
ii. Techno-pessimist,
iii. Techno-pessimist,
iv. Techno-optimist,
v. Techno-optimist
6. B. 5%
7. False
130 MANCOSA
Unit
6: Social and Ethical Considerations
MANCOSA 131
6.2 Why You Should Care About AI  Discuss why you should care about AI ethics
Ethics
6.3 AI Risks in the 4th Industrial  Identify AI risks in the 4th industrial revolution
Revolution
6.4 Biases That Emerge from How  Recognise biases that emerge from how algorithms work
Algorithms Work in The 4th Industrial in the 4th industrial revolution
Revolution
6.5 Societal Risks of AI Technology  Understand societal risks of AI technology risks in the 4th
Risks in the 4th Industrial Revolution industrial revolution
6.6 Future Jobs and Ethics  Recognise the future of jobs and ethics
6.7 Computer Systems Are Proxies or  Understand why computer systems are proxies of their
Their Makers makers
6.8 AI technology is not neutral  Discuss why AI technology is not neutral
6.9 Potential Counter measures to  Examine potential countermeasures to ethical risk and
Ethical Risks and Challenges challenges
6.10 What is Happening in The New Field  Discuss what is happening in the new field of AI ethics
of AI Ethics?
6.11 Other AI challenges summarised  Summarise AI challenges
132 MANCOSA

 Chen, B., Wan, J., Shu, L., Li, P., Mukherjee, M. and Yin, B. (2017).
Smart factory of industry 4.0: Key technologies, application case,
and challenges. IEEE Access, 6,.6505-6519
 Hozdić, E. (2015). Smart factory for industry 4.0: A review.
International Journal of Modern Manufacturing Technologies, 7(1),
pn.28-35
 Jackson, P.C. (2019). Introduction to artificial intelligence. Courier
Dover Publications
 Skilton, M. and Hovsepian, F. (2017). The 4th Industrial Revolution:
Responding to the impact of artificial intelligence on business.
Springer
 Skilton and Hovsepian (2018), “The 4th Industrial Revolution:
Responding to the impact of Artificial Intelligence on business”
MANCOSA 133
6.1 Introduction
Unit 6 focuses on ethics - the field dealing with right versus wrong and the moral obligations and duties of humans
as they relate to AI in the 4th Industrial Revolution. The adoption of AI in the 4th Industrial Revolution is occurring
rapidly and on a large scale. However, AI is being adopted in societies with multiple differences along racial, gender
and religious lines. AI in the 4th Industrial Revolution will affect people differently depending on their individual and
social group characteristics. AI is not neutral. AI can negatively affect the life chances of some groups in society
while promoting other social groups. Moreover, like any technology, AI can generate wrong and biased results.
Unit 6 considers what humans can do to minimise or even eliminate the risks posed by AI in the 4th Industrial
Revolution.
"Even with good intentions, AI systems can cause unintentional harm" - Ó Fathaigh (2019).
Unit 6 examines the ethics (a system of moral principles that defines what is right and wrong) of AI technology in
the 4th Industrial Revolution because “even with good intentions, AI systems can cause unintentional harm” (Ó
Fathaigh, 2019). Unit 5 demonstrated that AI technology would lead to job losses. This is true because the
automation of a wide range of cognitive tasks that were only performed by humans is increasing with the
development and adoption of AI technology. We learnt that, by and large, enterprises realise the benefits of AI
technology by replacing human labour with AI systems and robots. This is one of the many examples of AI
technology-induced harm that will be examined in this unit. Job losses harm retrenched workers and their families.
Is it right for enterprises to replace human workers with robots in order to maximise profits? These are questions
of ethics and morality rather than science (Robandi, Kurniati and Sari, 2019).
In Unit 6, you will learn about the different types of potential harm caused by the use of AI technology.
For example:
 Like any other technology, AI systems are neither neutral nor impartial;
 AI does not benefit different people equally;
 Some groups of people will derive more benefits from AI than others;
 AI is negatively affecting some groups of people (defined by race and gender) more than others;
 Algorithms that power AI systems are neither objective nor transparent;
 When technology goes wrong, e.g., when decision support systems powered by AI discriminate against
certain people from specific groups (African communities, women, pedestrians) with serious life-and-
death consequences, often there is no clarity as to who should take responsibility;
 Robots can harm people physically and in other ways; and,
 Robots can be controlled, misused, and hacked by people with ill intentions.
Ethics of AI are needed to minimise as much as possible, these and other potential risks associated with the use
of AI systems in the 4th Industrial Revolution. Therefore, in Unit 6, you will learn about the social and ethical
considerations of AI technology.
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6.2 Why You Should Care About AI Ethics

AI is a “double-edged sword” which gives rise to serious problems that affect people differently even as it delivers
immense benefits for society. However, you need to gain a deeper understanding of both the problems and benefits
of AI in order to take part in the collective efforts to minimise the potential harm from AI technology. The potential
harm from AI can be physical harm (Hirschi, 2018). For example, service robots (AI-enabled robots designed to
serve humans such as the elderly) can physically injure humans. AI algorithms are sort of black boxes at present.
For example, since algorithms are currently less transparent, it is difficult to explain why the algorithm reached the
conclusion to either reject or accept a loan application. A decision made based on results generated by an algorithm
may erroneously constrain the life opportunity of specific groups of people, especially people with a history of
disadvantage. Even their makers do not have complete knowledge of how they actually learn or how they have
reached a specific decision. We need people like you to seriously think about how you can minimise their potential
of harming humans. Some public and private institutions are already using AI to support decisions. In what ways
and to what extent must we rely on such decision support systems? The world needs you to contribute to these
debates (Jones and Pimdee, 2017).
Given these concerns, some of which we will elaborate on later, ethics of AI are needed to minimise as much as
possible, any potential risk associated with the use of AI systems. We have attempted to nudge you in the direction
of being aware of the reasons why you should care about AI ethics (Humphries and Schneider, 2019). This is an
appropriate time to examine the risks that AI technology poses in much greater detail.
Video Activity 6.1

Watch the video below to learn more about what ethics are and answer the
question: What is ethics?
https://www.youtube.com/watch?v=4vWXpzlL7Mo
Video activity 6.3

Watch the video below to find out more about the AI ethics and risks.
Note the major challenges to answer the next activity. Discuss any ten
challenges in AI ethics and risk.
https://www.youtube.com/watch?v=1oeoosMrJz4

Which of the ten challenges in the previous video relate to the field of work you
want to venture in?
MANCOSA 135
6.3 AI Risks in the 4th Industrial Revolution

We can examine the risks of AI technology on three levels, namely: 1) Individuals, 2) Organisations and 3) Society.
For the sake of brevity, we will focus on the individual level and societal level (Shahroom and Hussin, 2018).
26Figure 6.1, Societal levels at which AI risk occur

(Cheatham, Javanmardian, and Samadari, 2019).
The above blocks in figure 6.1 shows the various types of risks that AI technology poses to humans on individual,
organisational and societal levels. Privacy and reputation, equity and fair treatment, and physical safety are some
of the main risks for individuals.
6.3.1 Individual Risks

Many AI risks for individuals come from the way AI models ingest, sort and reveal connections in the data. AI
models use data from various sources, including social media, sensors, mobile devices and the Internet of Things
(IoT). However, some of the data is neither labelled nor structured. This can create different problems, ranging
from lack of sufficient anonymity in the data fed into AI models to biases embedded in the data (Huang and Rust,
2018).
Video activity 6.4

Watch this video to learn more about algorithmic biases:
Explain what an algorithm bias is.
https://www.youtube.com/watch?v=bWOUw8omUVg
The video shows that AI predictions can be biased. There are many types of biases, but we will only learn about a
few in this unit.
6.3.2 Data-Driven Biases

AI technology’s reliance on data for predicting results raises big ethical concerns. You have learnt that the more
data we create and share – which scientists will use as examples to train models – the better AI becomes at
predicting outcomes. Once AI models have been trained, they can make predictions based on new data inputs
based on prior data (Hutson, 2018). But what happens when the data we use to train AI systems is biased in some
way? Once AI models have been trained, they can make predictions based on new data inputs based on prior
data.
136 MANCOSA

Let us briefly consider a more recent example of data-driven biases.
Example: Misclassifying Darker-Skinned Women
Studies conducted by a black female scientist, Joy Buolamwini, with the Massachusetts
Institute of Technology (MIT), on the software created by high-tech firms such as Amazon,
IBM and Microsoft revealed higher error rates in misclassifying the gender of darker-skinned
women than for lighter-skinned men. Joy Buolamwini’s research has revealed that darker-
skinned women were the most misclassified group, with error rates of up to 34.7% (O’Brien,
2019). By contrast, the maximum error rate for lighter-skinned males was less than 1%.
What is the impact of such biases in the society especially in light of the Black Lives Matter
movement?
Think point 6.1

Reflect on Joy Buolamwini’s (see figure 6.2 below) findings using these questions:
What do you make of these errors in the facial recognition technology?
What sort of misjudgements arise from such flawed predictions?
How might biased AI predictions affect the way government officials (e.g., police and judges)
enact their duty to protect and treat women as consumers, victims of violence or any other
identity
27Figure 6.2, A picture of Joy Buolamwini behind the white mask

(O’Brien, 2019).
MANCOSA 137
Apart from facial recognition intelligent systems, all AI systems that are now being used to support everyday
decision-making are fraught with biases. In units 4 and 5, we learnt that algorithms were already being used to
make lending decisions in finance, hiring decisions in the human resources sector, and sentencing decisions in
the courts of law. Imagine what would happen if these systems had some form of biases. Consider the following
case study.
Case study 6.1:
Racial biases in AI-powered legal decision-making systems

Are the results produced by COMPAS ethical and fair?
28Figure 6.3, Racial bias and gender bias examples in the COMPAS AI system
(Bini, 2018).
138 MANCOSA
The above figure shows that an AI system used to help judges during sentencing was biased against people of
darker skin.
6.3.3 Interaction biases

Scientist Kristian Hammond notes that there are biases that affect systems that learn from interaction with users
instead of learning from numerous examples of data. Users that interact with the system drive these biases. A
classic example is that of Microsoft’s AI-powered chatbot, Tay.ai, which was designed to learn from internet users
(Bini, 2018).

Example: Tay.ai, the chatbot that learned the racist language
Microsoft intended Tay.ai the chatbot to learn from internet users and interact with
them like a human being. However, they let Tay.ai loose on the internet to interact
with users, and the outcome was not good. Unfortunately, Tay.ai internalised and
communicated biases of a racial, sexual and anti-Semitic nature. These biases were
there for everyone to see on Twitter. For example, to the question “Did the Holocaust
ever happen,” Tay replied that it was made up
Tay lasted only 24 hours before Microsoft pulled it down. Although Microsoft took down Tay.ai in under 24 hours,
we learned a lot about the AI systems that learn from people. Firstly, an AI system that learns from people will
learn all the biases and stereotypes of those people around it. Furthermore, we need to be careful in designing AI
systems that learn from interaction with people (Ongsulee, 2017).
6.4 Biases That Emerge From How Algorithms Work in The 4th Industrial Revolution.
In addition to biases embedded in the data, and those biases that are passed on to AI systems that learn through
interacting with humans, another type of bias to emerge is from the way algorithms have been designed to work.
These biases are being amplified by the way people use the internet (Ongsulee, 2017).
Algorithms such as those that are used by technology giants such as Google and Facebook tend to suggest the
sort of content that the user likes. For example, if you like what your friends liked on Facebook, the algorithm will
suggest more, or less, the same content to you. You end up receiving those views that like-minded people support.
You will not be able to appreciate diverging opinions and different views. This is not right, especially if you were
the leader of a country or large societal organisation (Arel, Rose and Karnowski, 2010).
Moreover, what would be considered newsworthy is different for social media platforms than traditional media such
as cable news. You may have learnt that much of the content that “goes viral” is not worth your attention. Biases
that emerge from how algorithms work and the way we use the internet tend to define what is “newsworthy”. The
sad part of this is that many stories that matter to us as human beings with a shared heritage and common
MANCOSA 139
challenges (for example, climate change, poverty, and disease) do not become newsworthy on social media
(Agrawal, Gans and Goldfarb, 2019).
6.5 Societal Risks of AI Technology Risks in the 4th Industrial Revolution.

According to Torresen (2018:4), there are AI risks of a technological nature which affect us as a society, as
described below.
6.5.1 Technological risk 1 – Losing human skills:
The first technological risk is the possibility of “losing human skills due to technological excellence” (Torresen,
2018:4). When machines increasingly take over intelligent work from us and even get better at cognitive tasks, we
might become more reliant on machines. Humans will not rely on their cognitive capabilities such as problem-
solving, reasoning and memory decreases.
6.5.2 Technological risk 2 – AI can be used destructively:

The second technological risk mentioned by Torresen (2018:5) is that “artificial intelligence can be used for
unwanted and destructive tasks”. AI is already being used to enhance defence and military power of countries.
President Trump’s FY2019 budget has identified AI and autonomous and unmanned systems as the
Administration’s R&D priorities (China Institute for Science and Technology Policy at Tsinghua University, 2018).
China, the second-largest AI superpower after the US, believes that AI technology is indispensable in the future
global military and power. A potential AI arms race is brewing with huge negative consequences for human life.
Yet the use of AI technology is poorly regulated, if at all, at present.
Video activity 6.5

Watch this video to learn more about the ongoing AI arms race and the ethical
concerns of AI scientists:
https://www.youtube.com/watch?v=Kgf8vl9TbpI
What are the main ethical concerns of AI?
Further development of AI capabilities in unmanned autonomous agents may increase the number of civilians killed
during operations. There are well-founded concerns that the increasing use of AI-powered military robots will make
going to war an easy decision. The US, for example, has been using drones to kill enemy combatants outside war
zones (Pereira and Romero, 2017). These combatants include persons categorised as terrorists by the US
Government. Many human rights groups have observed that more civilians, including children and women, die in
drone strikes in and outside warzones. They allege that the US tends to under-report the numbers of this collateral
death. Even if these numbers were very low, it would be unethical if a single civilian death occurs from drone strikes
in the future (Philbeck and Davis, 2018).
140 MANCOSA
Video activity 6.6

Watch this video to know about ethical issues associated with the use of
unmanned intelligent agents: What happened in Yemen?
https://www.youtube.com/watch?v=I3M862xbeKU
Case study 6.2

In the video you just watched, is it justified for the US to use drone strikes in
Yemen?
6.5.3 Technological Risk 3 – Can AI in The 4th Industrial Revolution Lead To the Extinction of Humans?
Evil people can penetrate the AI systems we increasingly rely upon, feed them with wrong data and generate
negative outcomes for us. This is known as hacking. Another very remote possibility is the global catastrophe that
can occur if AI technology develops into Artificial General Intelligence (AGI) (intelligence which is comparable to
human intelligence) technology and turn on the humans that created it. Often depicted in films and sci-fi novels,
this technological risk is not a threat in the long-term future since AI technology has yet to develop to that level
(Skilton and Hovsepian, 2017).
6.5.4 Technological Risk 4 – Data Privacy Breach:

Perhaps, a data privacy breach due to technological failures is a more realistic perceived threat than is the
extinction of humankind from AI-powered technology. This is a problem for individuals and society. AI-powered
digital technology enables us to do many super cool things on the internet faster, often with immediate feedback
(Jackson, 2019). The problem is that for nearly every activity we do on the internet, we are required to share
private, personal data such as one’s date of birth, location, photos, addresses, and credit card numbers. The risk
is that giant tech companies make huge profits from advertising. The more they target potential consumers with
the products and services they prefer, the more profits they make (Petropoulos, 2018).
Think point 6.2

What do you think about “targeting”, i.e., the way algorithms suggest content, including
news, stories, and advertisements, that a user is more inclined to click and pay more
attention to? Have you ever sent an email to get more information about a service or
commodities - for example, inquiring about the prices of flights and cruises from a travel
agent - and subsequently see advertisements of the same services and goods in your
browser? Does that sound creepy? Do you not feel like Google or Facebook or any other
internet service provider, is watching all your moves on the internet?
MANCOSA 141
Video activity 6.7

Watch this video to learn more about private data breaches:
https://www.youtube.com/watch?v=jC8cNqT4vBQ
Discuss any of the top 5 breaches .
Knowledge check 6.1

Question 1
Even with good intentions, AI systems can cause unintentional harm. True or false?
Question 2
AI can never bring physical harm. True or false?
Question 3
Biases are being amplified by the way people use the internet. True or false?
Question 4
Studies conducted by a black female scientist, Joy Buolamwini, with the Massachusetts
Institute of Technology (MIT), on the software created by high-tech firms such as
Amazon, IBM and Microsoft revealed higher error rates in misclassifying the
_______________________________________. for darker-skinned women than for
lighter-skinned women.
Question 5
Microsoft intended Tay.ai the chatbot to learn from internet users and interact with them
like a human being. However, they let Tay.ai loose on the internet to interact with users,
and the outcome was that Tay.ai _______________________________________.
A. communicated without any bias
B. communicated biases of a racial, sexual and anti-Semitic nature
C. communicated in a friendly and just manner
D. communicated in an ethical way
6.6 Future Jobs and Ethics
In Unit 5, we emphasised that many people may lose jobs due to increased AI-powered automation. AI technology
will lead to overall job losses. There will be fewer jobs, shorter working hours and shorter flexible working contracts.
Given that we live in an unequal society; it is plausible to think that such future opportunities may benefit only the
elite. Is that right?
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Video activity 6.9

To understand the ethical risk of losing jobs to AI technology, watch this video:
https://www.youtube.com/watch?v=59d3UZTUFQ0
What should companies consider before laying off people?
Think point 6.3

Before you move on, we invite you to reflect on the following questions:
 Have you ever wondered why the names of intelligent assistants such
as Cortana, Alexa and Siri reflect the names of women in the real
world?
 Have you ever questioned why the names of those AI-powered robots
that perform “mentally-demanding” and “manually-demanding” work
have Western “male” names?
6.7 Computer Systems Are Proxies for Their Makers

In a book titled Artificial Unintelligence: How Computers Misunderstand the World, Meredith Broussard claims that
“computer systems are proxies for the people who made them [and] historically, there has been very little diversity
among the people who make computer systems” (Broussard, 2018). People that make computer systems are
predominantly Caucasian males. The field of AI, then, reflects the gender hierarchies in society.
Refer to unit 3, the answer to "what is a beautiful baby?" will bring up mostly pale-skinned babies. Thus, AI models
are trained using biased data of children and poor quality data on non-Caucasians.
Applin (2019) has similarly asserted that designing AI systems now “do not represent all of us and are not
considering all of our needs equally”. Broussard has asserted that instead of a diverse network of scientists, “a
single small group of elites have been imagining and misunderstanding the interplay between technology and
social issues since the 1950s”. It is possible that the values and beliefs that the creators of AI technology possess
are not shared by other social groups in society.
Think point 6.4

 Shouldn’t we worry about the extent to which the inventors of AI care
about our common needs for the privacy and safety accorded by the
new technology?
 Are we certain that the makers of AI technology care enough about
the value systems of the different communities
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6.8 AI technology is not neutral

AI technology works in a highly unequal society and affects all people differently.
 Asian countries used cheaper human labour in the domestic markets to make cheaper exports and
achieve economic growth. Because automation replaces cheap, repetitive human labour, the least
developed countries will no longer be able to use cheap exports based on cheap human labour strategies
(Prisecaru, 2016).
 Least developed countries in Africa, Asia, and Latin America, for example, have yet to effectively develop
strategies to leverage AI in economic development. Therefore, AI might worsen inequalities between
regions of the world, with profound impacts on human conflict and forced migration (Huang and Rust,
2018).
Video activity 6.10

Watch a video of a surveillance system that uses facial surveillance at a primary
school in China. This school scans classrooms every 30 seconds:
https://www.youtube.com/watch?v=FPGWmnTL79M
Would you love to have this system in your class rooms?
Think point 6.5

After watching this video, think about the following questions:
 Would you feel comfortable knowing that your classroom makes use
of facial surveillance?
 How do you think facial surveillance may benefit or not benefit
students in the classroom?
To end Unit 6, we examine potential countermeasures to ethical risks.
6.9 Potential Counter measures to Ethical Risks and Challenges

There are two main approaches to addressing the ethical concerns around robotics and AI (Torresen, 2018):
Approach 1:
The first approach tasks engineers developing AI systems and intelligent robots to be aware of the possible ethical
pitfalls of AI technology, including the potential of misuse, and they should consider these when developing
algorithms. Furthermore, this calls for developing mechanisms for transparency, enabling human inspection of
algorithms. This concern falls in the robotics (or robot ethics) approach, understood as the human ethics of those
who design, manufacture and use robots (Wang and Siau, 2019).
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Approach 2
The second approach falls squarely in the new field of machine ethics, which is: “concerned with giving machines
ethical principles or a procedure for discovering a way to resolve the ethical dilemmas they might encounter,
enabling them to function in an ethically responsible manner through their own ethical decision making” (Anderson
& Anderson, 2011:1 quoted in UNESCO, 2017:43). The field of machine ethics is concerned largely with the
question of how to “programme robots with ethical procedures, rules or codes” (UNESCO, 2017:37).
6.10 What is Happening in The New Field of AI Ethics?

Discussions about the ethics of AI technology are gaining momentum on various levels but coordination is lacking.
For example, the United Nations Educational, Scientific and Cultural Organisation’s (UNESCO) World Commission
on the Ethics of Scientific Knowledge and Technology (COMEST) published a report on robotic ethics in September
2017 (UNESCO, 2017).
In the same year, the Future of Life Institute convened a conference which developed the Asilomar Principles – “a
set of 23 principles... which include research issues, ethics and values, and longer-term issues... intended to
promote the safe and beneficial development of artificial intelligence”. By the end of 2018, the State of California
had signed up to the Principles, adding to a growing list of signatories that had endorsed the Principles; including
AI research leaders at OpenAI, Facebook, Google DeepMind, GoogleBrain, and Apple. Interestingly, the Future of
Life Institute’s 2018 Annual Report, signed off by the Institute’s President, Max Tegmark, does not seem to mention
the COMEST’s robotic ethics reports (UNESCO, 2017).
The European Union too has developed guidelines to promote Trustworthy AI, which has three components which
should be satisfied throughout the AI system's entire life cycle, namely:
 It should be lawful; it must comply with all applicable laws and regulations
 It should be ethical, that is, it should ensure adherence to ethical principles and values and
 It should be robust, both from a technical and social perspective because AI can cause harm despite
the initial intentions
These EU guidelines acknowledge that AI can do good. Therefore, we should maximise its benefits while
minimising its risks. The EU guidelines combine (rather than isolate) robotics and machine ethics.
While the ethical guidelines for a trustworthy AI represent a step in the right direction, again, they do not seem to
acknowledge prior and ongoing efforts at designing principles that will make AI safer. Perhaps the EU has passed
the most robust data protection laws, thus far. The European Union Data Protection Regulation seeks to give online
users control over their data (Agrawal, Gans and Goldfarb, 2019).
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Video activity 6.11

Learn more about the European Union data protection regulations by watching
this video and answer the question that follows:
https://www.youtube.com/watch?v=UdWkFloDbAs
Explain the EU data privacy laws.
Despite this lack of coordination, these and many other initiatives are good starting points in the journey toward a
universal code of AI ethics. The biggest challenge, however, is that regulation is moving light years behind
innovation. Although it is never too late, AI systems are already causing great harm to humans (Li, Hou and Wu,
2017).
6.11 Other AI Challenges Summarised

There are many other AI challenges according to Schwab (2017), as summarised below:
 Traceability – Trustworthy technology should be traceable, especially when errors occur. Tracking a
robot’s prior actions is hard. This is even harder when the robots in question are AI-powered autonomous
agents that can learn and modify their behaviour while interacting with the environment.
 Responsibility – As robots become increasingly autonomous with the capability to learn and modify
behaviour, who should be legally and ethically responsible for their behaviour? Who among robot
designers, computer scientists, programmers, investors, wholesalers, retailers, or users should be held
accountable and responsible?
 Legal contracts - Can an intelligent machine capable of programming itself and formulating goals be
legally responsible for its actions?
 Programming ethical robots – Whose ethical principles and values should be programmed into AI-
powered robots? This is an important question because we live in a very diverse and unequal world where
values of certain groups have managed to dominate and even replace the value frameworks of other
social groups. Can there be consensus on the sort of values to encode into AI-powered robots?
 Regulating fast-paced technology –AI technology is developing at a fast pace. How do we regulate it
without slowing down innovation?
 Robot rights – The chances are very high that robots will become smarter and quicker than the humans
they must serve. If we increasingly accept robots as moral agents, then programming ethical robots
becomes more imperative. Should robots have rights at all? What sort of punishment should be
administered at robots for violating rights?
 Consciousness – If indeed, robots should have rights or some form of simulated humanity, they must
have consciousness like humans. Humans respect rights because they possess consciousness. Can we
successfully simulate human consciousness in machines?
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 Human exceptionalism, cats and dogs – Human value frameworks are based on the idea that humans
are superior animals with a consciousness. Will the bestowing rights to robots challenge the very idea of
human exceptionalism? If we develop rights for robots, should we not develop rights for cats, dogs, and
other animals?
Unit 6 addressed the potential harm that may affect individuals, organisations and the society at large, due to AI
technology. AI might affect more people in profound ways as its capabilities continue to grow in the foreseeable
future. Unit 6 demonstrated that, like any technology, AI is being used in the real world with myriad stereotypes,
biases, and asymmetries. These include stereotypes and inequalities based on one’s neighbourhood, cultural and
racial group, gender and age. Numerous examples were used to show that AI is not a neutral technology. Instead,
it amplifies some of the worst of human biases and stereotypes (Pereira and Romero, 2017).
There is a real danger that AI may reinforce oppression experienced by women of colour, migrants and other
economically inferior groups in society, with far-reaching consequences for human flourishing at the societal level.
AI algorithms are being used to make lending decisions. Black people in some communities may have fewer
chances of accessing a home loan. Globally, AI will boost the fortunes of highly developed countries, worsening
existing global economic inequalities (Razi, 2007). Such countries already benefit from unequal trade and they will
use AI to increase their advantage by producing even cheaper goods for the world markets. Least developed
countries might fail to use cheaper exports produced by labour intensive means to compete with their more
developed counterparts. This can lead to more conflicts in the least developed countries and forced emigration
from these more impoverished regions to richer countries resulting in a humanitarian crisis (Lu and Weng, 2018).
Unit 6 also considered many legal and ethical challenges posed by AI technology. One of the areas for which
disagreements will arise is the question of whom to hold legally responsible if an autonomous learning agent (e.g.,
a robot) harms people or damage property. As technological abilities grow, this question will become even more
pressing. A worrying observation made in Unit 7 is that legal and ethical regulation is lagging light years behind AI
innovations. This means that many people might be experiencing the negative consequences of AI without
recourse to the law (Lu and Weng, 2018).
Going forward, it seems that we will co-exist with more sentient, autonomous thinking AI systems (Unit 8 explores
the topic of sentient robots in a predicted radical future).
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Knowledge check 6.2

Question 1
AI technology works in a highly unequal society and affects all people differently. True or false?
Question 2
Match the statement below to the correct answer
Prompts:
a) Machine ethics
b) Robo ethics
c) Robo rights
d) Traceability
e) Trustworthy AI
I. Understood as the human ethics of those who design, manufacture and use robots.
II. Programming robots with ethical procedures, rules or codes.
III. Tracking a robot’s prior actions is hard. This is even harder when the robots in question
are AI-powered autonomous agents that can learn and modify their behaviour while
interacting with the environment.
IV. The chances are very high that robots will become smarter and quicker than the
humans they must serve. If we increasingly accept robots as moral agents, then
programming ethical robots become more imperative.
V. The European Union Data Protection Regulation seeks to give online users control
over their data.
Question 3
The United Nations Educational, Scientific and Cultural Organisation’s (UNESCO) World
Commission on the Ethics of Scientific Knowledge and Technology (COMEST) published a
report on ____________________ in September 2017.
A. robot ethics
B. human ethics
C. animal ethics
D. world ethics
Question 4
These EU guidelines acknowledge that AI can do good. True or false?
Question 5
There will be no jobs lost due to increased AI-powered automation. True or false?
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Question 6
AI might worsen _______________ between regions of the world, with profound impacts on
human conflict and forced migration.
A. Hunger
B. environmental factors
C. politics
D. inequalities
6.12 Summary
This section of unit 6 really tries to show us the other side of AI in the 4th Industrial Revolution that is seldom talked
about in the public discourse, the potential and the current ethical use of it. This presents ethical challenges and
can be referred to as AI having a “double-edged sword”. With this huge improvement of algorithms and AI one
major contention is how algorithms and AI are still rooted in bias and that the decisions they make that can have
far-reaching consequences for some groups of people. AI technology and algorithms are less transparent about
how they arrived at certain decisions which can result in a lack of accountability. An example of this is how AI has
been used to reject or accept loan applications or online job applications. This can result in inherent biases rooted
in AI reinforcing existing biases in loan approvals.
AI systems used to make or inform everyday decisions are therefore fraught with bias such as decisions to lend
money, hiring decisions, and sentencing decisions in the courts of law. Besides algorithmic biases, AI technology
presents societal risks, namely: the loss of human skills, the possibility of destructive use of AI, the possibility of
extinction of human life, and finally, data privacy breach.
This unit signals the main fear of the advent of the 4IR and AI technology and the loss of jobs due to an increase
of AI-powered automation. This is due to the fact that in previous revolutions, there was some sort of replacement
for cognitive and repetitive tasks, which were previously done by humans. AI technological innovation is happening
at such a blistering pace that societal problems, which need our intervention now, are lagging. AI technology is a
reflection of those who make it. This means that it can exclude certain groups of people. Because of this, AI
technology is not neutral, or rather, objective. Therefore, AI technology will affect and impact different groups of
people differently. To counteract this, several approaches have been proposed. The first one is for AI developers
to be aware of the possible ethical pitfalls of AI technology. The second one falls squarely in the new field of
machine ethics. Ultimately, the following are the adverse challenges that are presented by AI technology, which
are: traceability, responsibility, legal contracts, programming ethical robots, regulating for space technology, robot
rights, consciousness and human exceptionalism.
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Unit 6 Revision questions

1. If a technology is going to proceed, to what end should it be deployed?
2. If the technology is to go forward, how should it proceed?
3. Once norms have been set, how will the field be monitored to ensure
adherence?
Video Activity 6.1: Ethics. The term ethics often describes the investigation and analysis of moral
principles and dilemmas. Traditionally, philosophers and religious scholars have studied ethics. More
recently, scholars from various disciplines have entered the field, creating new approaches to the study
of ethics such as behavioural ethics and applied ethics. The term ethics can also refer to rules or
guidelines that establish what conduct is right and wrong for individuals and for groups. For example,
codes of conduct express relevant ethical standards for many professions such as medicine, law,
journalism, and accounting. Some philosophers make a distinction between ethics and morals. But many
people use the terms ethics and morals interchangeably when talking about personal beliefs, actions, or
principles. For example, it’s common to say,
“My ethics prevent me from cheating.” It’s also common to use morals in this sentence instead. So,
whether we use the term ethics to refer to our personal beliefs, or rules of conduct, or the study of moral
philosophy, ethics provides a framework for understanding and interpreting right and wrong in society.
Video activity 6.2:

We create these technologies and we need to choose how we want to use them, or otherwise we will be used by
them. This idea of ethics is really this glorious opportunity that we have as humans right now, today, for deep
introspection. The awareness and being told by creators of this technology is to not be blind, to not ignore those
negative possibilities but to understand them upfront, make the world aware of them and do what we can to mitigate
their impact. How do we represent our values in these systems such that the systems are aligned with us? They
would make the same decisions we might make, had we been given a long time to think about it? The power of
these A.I. systems is going to be, that they will know us better than we know ourselves, we will be tracked in a lot
of different ways and with some kind of underlying goal. Is that goal to sell us products? Is that goal to make us
more educated? To make us more civil? More open minded? It is potentially an indoctrination machine and how is
that governed? Who runs that? Is that going to be strictly for commercial purposes? This is too powerful just to sell
lawn chairs to people. This will change the way you look at the world. Hence, it would be good if it were taken that
seriously, How will machines know what we value if we ourselves do not know
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Video activity 6.3:

One: Machines that make it harder to think for ourselves. Of course, apps like Google, Alexa and Siri are already
doing this to some extent. But the more we rely on smart machines to do stuff for us, the more we risk losing skills
that we may one day regret.
Two: Machines that take away jobs. This is a huge issue as smart machines begin to outperform smart people.
The big question is whether we can keep on inventing jobs that humans do better, or if we need to consider a
future without paid jobs.
Three: Machines that learn from our worst habits. As we train smart machines, will they end up as opinionated,
biased, and anti-social, as some of their human trainers? The evidence so far is that, unless we work hard on
avoiding this, sadly they probably will.
Four: Machines that make decisions we don't understand. Imagine failing a job interview, or flunking a class, or
being fined; all because a machine made a decision that no one could explain, but you had to live with anyway.
Scarily, were already on the slippery slope of giving smart machines the authority to make such decisions without
being accountable for them.
Five: Machines that don't understand what's important to people. Imagine an AI that has the power to change your
life, but it has its own ideas about what's important and what's acceptable. This is great if you both agree; but it's
a nightmare if you don't.
Six: Machines that kill people. Of course, machines kill people all the time. But usually there's a person making the
final decision. What happens though when we replace that person with another machine?
Seven: Machines that alter their own instructions. Interestingly, we want machines that can think for themselves
when solving complex problems. But what if they get too smart?
Eight: Machines that make smart-dumb decisions. We know that smart people can make decisions that look really
stupid with hindsight; especially when they can't appreciate the full consequences of their actions. Sadly, from what
we know of complex systems, smart machines are likely to have exactly the same problem.
Nine: Machines that decide we're not needed! What if AIs get so smart that they realise people are a waste of
space? The good news is that we are probably a long way from super intelligent machines that are disdainful of
mere human beings. But it's worth thinking about, just in case.
And finally Ten: Machines that use our human weaknesses to control us. What are the chances that we create
machines that are smart enough to understand our human foibles and use them against us? If we're not careful,
we won't be fearing our AI lords: we'll be worshipping them! Of course, despite these and other risks, AI could
make our lives amazingly better if it's developed responsibly. But this won't happen if we don't think about the
possible downsides up-front. The good news is that AI developers and others are already beginning to do this. But
we're going to need a whole lot of input from experts in many other areas, if the benefits of AI are too far outweighing
the risks.
MANCOSA 151

Consider the risks and challenges in the previous activity and tick those that relate to your field.
Video activity 6.4

Algorithms are everywhere. From powering our internet search results, to taking out the guesswork in our online
shopping experience. They are everywhere. We use and trust them each and every day to make countless
decisions for us. Despite this seemingly neutral mathematical nature, algorithms however aren't necessarily any
more objective than humans, because at the end of the day they are written by people and this is where the
phenomenon of algorithmic bias comes into play. It has many examples like when Nikon cameras ‘EQUIPPED
WITH THE BLINK DETECTION’ feature would not snap photos of many of its Asian users because the software
thought their eyes were never open. Or how Amazon's Alexa struggles to recognise different accents, and when
Google Translate insistently associate certain jobs with certain genders while translating sentences with gender
neutral pronouns from languages like Turkish, Finnish and Chinese. In 2015, Google's photo recognition tool
mistakenly tagged a photo of two black people as gorillas. Meanwhile in the U.S. a crime predicting algorithm
wrongly labelled black people with offenders, at nearly twice the rate of white people. You see the pattern here.
Algorithm bias is rooted in the way A.I., artificial intelligence algorithms work by using what's called machine
learning and deep learning, which are both ways in which computers make decisions. Both are simply dependent
on data, a huge amount of it, and ultimately the people who feed the data. So, let's say we have an image
classification algorithm. When you have that algorithm, data like millions of photos correctly labelled as a mug, it
will be able to detect other pictures of mugs by comparing it to a set of characteristics it has learned, thanks to its
database. Similarly, a speech recognition algorithm transcribes words by comparing it to the millions of voice
samples that it got earlier. The more labelled data an algorithm is trained on, the better the outcome will be.
However, if there is too little data or too much unspecific data, these algorithms will have some blind spots. Here
is where the problem that algorithmic bias comes into play. There is generally a person or a group of people who
decide what goes into the sample data set the machine learns from. So, if a camera company teaches its A.I. to
detect open eyes and has used Caucasians as its main dataset, then it's easy to see how the blink detection would
be triggered when an Asian person steps into frame. This is an example of the algorithms in question not trained
with enough or related data in order to produce correct results. So, what is really important to remember here is
that behind every algorithm, there are people. And of course, that person’s set of values and beliefs, ethnicity and
cultural intelligence all play a part. These mistakes were perhaps unintentional. But the potential for software
products to accidentally adopt some bias is serious. And as more industries which have a deep impact on people's
lives turn to technology and specifically to algorithms and services like school admissions, job applications,
insurance rates and credit scores, a significant question arises: Can algorithms really yield fair results? And whose
responsibility is it to ensure that companies and people who create these systems are doing so in the spirit of social
equality?
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Practical activity 6.2:

Take into account how the people of colour feel about being looked down upon by other equals who are in white
skin. How they are fighting for the system to be fair. These technologies are built to aid the system hence should
make the same mistakes for all groups or no mistakes at all. Simply they should not be biased.
Think point 6.1:

Consider the impact of errors in facial recognition. How the mistaken person would feel and the trouble they will
go through if they are associated with crimes they did not commit. Consider the social injustice in a case where
the person who actually committed the crime is not caught because of facial recognition biases.
Case study 6.1: The results are not fair and the system has racial bias as the blacks were said to be more probable
to re-offend as compared to whites, however, in actual fact is was found to be the other way round.
Video activity 6.5: It sounds like the plot of a Sci-Fi movie but major players in the tech and science industries are
warning world leaders in artificial intelligence arms race that there could be a problem in the future. Tesla CEO
Elon Musk, Apple co-founder Steve Wozniak and renowned physicist Stephen Hawking, among other prominent
figures are warning world leaders of the potential problem as autonomous military weapons continue to grow. In a
letter presented at the International Joint Conference on Artificial Intelligence and Buenos, the group says A.I.
technology has reached a point where the deployment of autonomous weapons is practically, if not legally feasible
within years not decades and the stakes are high. Autonomous weapons have been described as the Third
Revolution in warfare after gunpowder and nuclear arms. The argument as The Guardian points out, is going to
war would be an easier decision if robots are the ones fighting. Drone strikes are already a contentious issue in
the US but reliable statistics for how many are killed by those strikes overseas every year are tough to come by.
Civilian deaths caused by drones are also an issue, though President Obama's defended their use. Actually drones
have not caused a huge number of civilian casualties. For the most part they have been precision strikes against
al-Qaeda and their affiliates, and we are very careful in terms of how it's been applied.
Musk has warned of this kind of A.I. take over before including this August 2014 tweet reading: We need to be
super careful with A.I. potentially more dangerous than nukes. The letter asks the United Nations to ban the use
of autonomous weapons.
Video activity 6.6

The US Senate has advanced a resolution to end military support for the Saudi led coalition in Yemen's civil war.
The war that began in 2015 has killed tens of thousands of people and created the world's most urgent
humanitarian emergency. But there's another war being waged in Yemen overshadowed by the strife in the country.
The US has been conducting drone strikes in Yemen for the last 16 years. There are 127 strikes in 2017 alone.
The so-called signature strikes have aimed to suppress members of al-Qaeda in the Arabian Peninsula. But the
MANCOSA 153
campaign has killed scores of civilians targeting houses, schools, hospitals, markets and even wedding
processions. In an examination of drone strikes this year, the AP and Bureau of Investigative Journalism found
that at least 30 of those killed were not al-Qaeda members. That's around a third of people killed in drone strikes
so far this year. They would kill two or three from al-Qaeda on one hand and 10 or 15 civilians on the other hand,
whereas this al-Qaida that they claim to be killing, there are many other incidents like this due to drones. The sUS
started its drone warfare in Yemen in 2002. And it has drawn widespread criticism for hitting targets and regions
without a proven source associating them with militants.
Case study 6.2: No it was not justified as a lot of civilians who had nothing to do with the war died. And only a few
who had something to do with war died. The use of the drones was not for greater good as families lost their loved
ones.
Think point 6.2: If you found targeted advertising creepy, then you should be more concerned about AI data
synthesis capabilities. Did you know that more than any other technology, AI technology has unimaginable and yet
to be understood capabilities to synthesise data in ways that were not initially intended or thought to be possible?
With AI, we may soon fail to keep to ourselves some private information that we do not want to share. AI even
knows some aspects of ourselves that we have yet to discover! This is why Netflix algorithms are good at
suggesting just the sort of movie you would love to watch.
Video activity 6.7:

1. Facebook. The Facebook - Cambridge Analytica scandal erupted in March 2018 in a watershed moment for
the tech industry. A former employee turned whistle-blower helped reveal that CA had harvested the personal
data of 87 million users Facebook profiles without their consent and used it for political purposes.
2. Quora - Quora data breach exposed about 100 million users’ data including names, email address and
encrypted passwords. It also included public content, such as questions answers and comments. The
company announced the breach on 3 December 2018 saying it’s systems were compromised by “a malicious
third party”.
3. Google Plus - Google announced to shut down its Google Plus service on 8 October 2018. A security bug had
allowed third-party developers to access the private data of up to 500 000 users since 2015.
4. Marriott - The Marriot security breach left the personal information of up to 50 million hotel guests exposed.
The hotel revealed in December there had been unauthorized access to its Starwood properties reservation
database since 2014.
5. Uber - A 2016 data breach exposed the names, phone numbers and email ID’s for more than 20 million users
of the ride-sharing company. Uber withheld the announcement of the breach in 2016 it was fined $148m in
September 2018 for failing to report the same.
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Knowledge check 6.1

1. True
2. False
3. True
4. Gender
5. B. Communicated biases of a racial, sexual and anti-Semitic nature
Video activity 6.9: In your answer consider the following factors: Give everyone a little head up. Master the
technology. Give individuals' privacy in group layoffs. Rethink how you shut down employee access to the company
network. Now more than ever, be honest and compassionate.
Think point 6.3

Consider how gently and helpful women are as compared to their male counterparts in nurturing and giving
assistance. In manually demanding AI consider how physical the male species are and their body frame.
Think point 6.4

We should definitely be worried about privacy and safety because it makes humans who they are and every
individual has rights that ought to be respected. AI also has to observe that and not infringe on the rights of people.
We certainly can never really be sure but the code of ethics and standards in building AI should be a positive step
in the right direction.
Video activity 6.10: Consider the benefits of facial surveillance on security and examination invigilation. And also
consider the privacy issues.
Think point 6.5: Consider the benefits of facial surveillance on security and examination invigilation. And also
consider the privacy issues
Video activity 6.11: WhatsApp is putting an age limit on users. Instagram is about to let users download their
content and Facebook is now sending notifications about new privacy policies. All of this in the European Union.
Wondering why? It's all part of the European Union data protection regulation, the biggest intervention and online
privacy ever, its main purpose is to give users control over their data letting them know what information is being
stored and where and how it's being used. Users also have the right to be forgotten which allows you to potentially
have your data deleted. Meaning, if your high school photos are not of public interest, a controller, let's say Google
will have to raise them at your request but not only that, the law forbids consent statements that are confusing.
They now have to be clear and as easy to cancel as they are to accept. If a misuse of your data could put your
rights and freedoms at risk, a data processor has to notify you within 72 hours without undue delay. In other words,
if a company like Cambridge Analytica misuses your data and a company like Facebook is aware of it you must
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be informed about it within three days. So, you won't have to wait for a whistle-blower and an international scandal
to find out. The law also includes something called a subject access request. Which means you can send an email
to your boss asking for all the emails that refer to your performance reviews, computer access logs, lists of phone
calls to, from or about you, even the CCTV footage and all the other private data about you. And your employer
needs to send it within 30 days. But what happens if a company breaks the law? Well, it would have to pay a fine
of up to 24 million dollars or 4 percent of their annual income whichever is greater, is paid. The data protection law
was passed in April 2016 and was enforced on the 25th of May 2018. But the Assistant to the European Data
Protection Supervisor says the EU doesn't want to do witch hunting. On the other hand, you have to remember
that when the complaints come through the Data Protection Office, the Data Protection Authority has to approach
it with the whole approval given by digital revolution. The biggest change the new law brings is that it would affect
all companies from around the world dealing with data of users in the EU. But if you do not live in this part of the
world there is bad news. You do not get all this protection. Companies around the world are not willing to offer the
same rights nor are other countries asking them to and we are more and more shrivelled both by the state and by
the other entities that exist on the market. We do not want live either in the world of the 1984 by Orwell or the
“Brave New World” by Huxley where everybody is shrivelling everybody.
Knowledge check 6.2

1. True
2. Robo ethics, Machine ethics, traceability, Robo rights, trustworthy AI
3. A. Robot ethics
4. True
5. False
6. D. Inequalities
156 MANCOSA
Answers to Revision Questions

Unit 1
Question 1: When where the other revolutions?
 The First Industrial Revolution is generally seen as the move from human reliance on animals, human
activity and agriculture as primary energy sources to the use of natural energy and the mechanical
strength that it has made possible
 The Second Industrial Revolution took place at the end of the 19th century and within the first two decades
of the 20th century, bringing significant advancements in the field of energy delivery, wired and
wireless communication, ammonia synthesis and new methods of generating power.
 The Third Industrial Revolution then began in the 1950s with the emergence of digital technologies,
networking and rapid developments in computing power, allowing new ways to produce, process and
exchange information
 The Fourth Industrial Revolution can be defined as the emergence of "cyber-physical systems" involving
completely new abilities for humans and machines. Although these capabilities draw on the technologies
and infrastructure of the Third Industrial Revolution, the Fourth Industrial Revolution reflects completely
new ways in which technology is incorporated into society and even in human bodies
Question 2: What is the potential impact of 4IR?

 Inequality: According to Credit Suisse's Global Wealth Report 2015, the richest 1 % of the population now
owns half of all household wealth. Oxfam's latest study reveals an extra drastic accumulation of assets,
with 62 persons owning more assets than the poorest 3.6 billion people together, half of the world 's
population. This is a remarkable gap – especially given that researchers such as Richard Wilkinson and
Kate Pickett have found that disadvantaged communities appear to be more aggressive, have a higher
number of people in jail, experience higher rates of mental illness, and have lower life expectancy and
lower levels of confidence
 Furthermore, the types of jobs that are produced in these industries tend to need high levels of education
and advanced training, whereas those that are lost include physical or repetitive tasks. The Forum's
Future of Jobs Report surveyed senior managers in human resources and offers proof that future
employment will necessarily involve nuanced problem-solving, social and system skills. Upward bias
against skill requirements has an unproportioned impact on older and low income groups and those
employed in the sectors most vulnerable to transformation through emerging technologies
 Shifts in jobs and skills can also cause a raise in gender inequality. In the past, technological
unemployment has concentrated in industries that mainly employ males, such as manufacturing and
construction. But the capacity to utilise artificial intelligence and other techniques to automate duties in
service sectors puts many more categories of jobs at risk in the future. They involve jobs that are a source
of livelihood for a lot of young female employees and lower middle-class women globally, including the
customer service centre, retail and administration positions
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 Security: Increasing inequality does not only affect growth, mental health and trust – it also raises security
issues for people as well as governments. The Forum's Global Risks Report 2016 points out that a hyper-
connected environment, coupled with increasing inequality, could lead to instability, inequality and social
disorder. This blend of variables generates the conditions for vicious extremism and other security threats
through shifting power to non-state actors. In addition, the strategic space for conflict is changing. The
convergence of the digital world and emerging technology is generating new "combat rooms," widening
access to lethal technology and making it more difficult to rule and negotiate between states to ensure
that there is peace
 The rapid expansion of digital technology thanks to the Third Industrial Revolution means that, during the
Fourth Industrial Revolution, cyberspace is now as strategic an arena of interaction as land, sea and air.
 Identity, voice and community: In addition to concerns about increasing inequality and endangered
protection, the Fourth Industrial Revolution would also impact individuals and community leaders. Online
media is now gradually becoming the primary driver of our individual and collective system of culture and
community, connecting people to individuals and organisations in new ways, cultivating connections and
forming new interest groups. In fact, these relations cross many of the conventional limits of interaction.
Unit 2
Question 1: How do we take a right-first approach to digital transformation and technology use?
 Innovation activities for non-profit organisations usually focus on the utilisation and ranking of technologies more
than the rights and effects on their users. This trend must be overturned as Nathaniel Raymond and other key
thinkers have said, more so as a number of instances have been found where non - profit organisations have
been culpable in digitally harming the vulnerable populations they represent.
 Defining rights-first solutions would then demand deeper understanding and greater cross-sectoral relations with
academia, industry and philanthropic work in order to inform organisational application and influence it.
Question 2: How do we define a digital transformation process that makes sense for us?
 Government, industry and civil society research emphasises how digital transformation can improve efficiency,
broaden reach and open up new perspectives that can have greater effect on organisations. However, in non-
profit and civil society organisations, the definition of digital processes appears to be drastically different from the
traditional industry models and case studies.
 Civil society and other well-being organisations, in particular when working with vulnerable communities, require
strategies and resources which reflect their values, limited resources and a responsible use of data. Advocacy
groups and philanthropist organisations, development and other non-profit organisations need an extended
platform for shared insights into the development of responsible data.
158 MANCOSA
Question 3: How do we develop our organisational capacities for change – our people, our management
processes, our foresight?
 The success of initiatives depends largely on how well civil society organisations respond to digital and emerging
technologies, investing in literacy and fostering a sustainable learning culture and adaptive management.
 To drive organisational change and technology literacy it is necessary to develop long-term approaches and
experiments rather than to impose technological tools or illusions of nominally 'innovative' programs. Common
guidance and practical insights across civil society, as well as critical philanthropic and
governmental investments would strengthen the capacity of the sector to change.
Question 4: What’s our role in the bigger conversations on how technology governs and impacts society?
 Society requires civil society and community groups to keep asking these questions for themselves, and more
frequently, in order to promote a people-centered Fourth Industrial Revolution.
 Such organisations put together long-term expertise in the field, community relations and holistic solutions that
are vital to the human application of technology, taking into account the perspectives of culture, authority and
systemic injustice that are not always part of governance conversations.
Unit 3.
Big Data challenges include capturing data, data storage, data analysis, search, sharing, transfer, visualisation,
querying, updating, information privacy and data source. Big Data was originally associated with three key
concepts: volume, variety, and velocity.
Advantages: Improved business processes. Fraud detection. Improved customer service. Understanding and
Targeting Consumers. Optimise and Improve Business Processes. Supports Developments in Artificial
Intelligence. Empowers Online Businesses and the Digital Ecosystem and Equipping Organisations with Better
Capabilities.
Disadvantages: Privacy and security concerns. Need for technical expertise and Issue Over the Value of Big Data.
Unit 4.
 Google and Richard Branson are experimenting with new employment methods under which they hire
two individuals on a part-time basis instead of one person on a full-time basis. This gives the employee
time to follow certain hobbies and self ambitions, while the employer is in a position to minimise his or her
costs
 Coca Cola is pursuing a groundbreaking approach to find out how to add value to its vast network of
companies and supply chains through a system called 5by20. 5by20 is the global commitment of Coca-
Cola Company to facilitate the economic empowerment of five million female entrepreneurs throughout
the company's value chain by 2020. The program is aimed at small businesses with which the company
operates in more than 200 countries worldwide. From farmers to craftsmen, this project seeks to assist
females overcome the challenges they face to succeed in business
MANCOSA 159
 Upon being the winner of the Global Shapers Community 'Coca Cola Shaping a Better Future Contest' at
the World Economic Forum at Davos in 2014, the Global Shapers Community in Cape Town successfully
launched The Social Collective, which is a Global Shaper Hub project that became a profit-driven
technology start-up. This stems from the work that the Hub did with some South African government
entities to provide technology to increase and monitor the employability of the youth, especially through
volunteering
Unit 5.
Question 1.
 Major changes in technology have led to significant changes in social systems and how people can
contribute to society and make a living. For example, the Industrial Revolution has brought huge changes
to our socio-economic systems and the types of work people have done
 Currently, technical advancements are making it possible to automate most of the work being done by
workers currently. This applies both to manual labour jobs, through robotics and the Internet of Things,
as well as to white-collar work, by means of artificial intelligence. The widespread applicability of such
innovations has contributed to widespread concern about job loss. Moreover, according to the Oxford
report of 2014, 47% of workers in the US could be replaced by automated processes over the next two
decades
 Indeed, as many have pointed out, while technology has always eliminated the need for certain types of
jobs, it also creates new ones. Technology is a collection of instruments that we use in a number of ways
to improve production. Some jobs were destroyed by the Industrial Revolution, but many more were
created. It also increased the aggregate wealth of society and developed a middle class that could
experience health, education and other advantages that had previously been available only to the richest
Question 2.
 The Fourth Industrial Revolution is primarily influenced by four different technological developments,
namely: high-speed mobile Internet, AI and automation, the utilisation of large data processing and cloud
computing. Of these four innovations, AI and automation are projected to have the most important effect
on job figures in the global workforce
 Above bringing about new roles and responsibilities, the 4th Industrial Revolution could also lead to more
businesses that hire specialised contract workers or mobile workers. Because of new technology and
changing demands, business owners may also become more accommodating of current employees who
want to work remotely or flexibly
 Almost every industry will be affected by the Fourth Industrial Revolution, with The Economist predicting
that 50% of jobs will be affected by automation. Even so, some sectors are more prone to automation than
others because robots, like humans, have a specific skill set
160 MANCOSA
 In the approaching future, we should expect to see a decrease in the number of full-time workers in
industries such as manufacturing and agricultural roles, since much of these roles have already been
phased out due to increased automation. Robots can also carry out tasks within industrial facilities more
effectively and safely, and as such, their use in manufacturing goes all the way back to the 1970s
 It is unlikely to automate roles that involve recognising cultural sensitivity, caring for others, creative or
complex thinking and perception. So, social workers, nurses, nuclear engineers, teachers and writers can
be guaranteed that they won’t be substituted by robots any time soon
Unit 6
Question 1: If a technology is going to proceed, to what end should it be deployed?
 There will be a large range of so-called human improvements during the Fourth Industrial Revolution
 Others will be able to enhance or reduce human capacity, such as elevated athletic capacity, improved
memory, and far less violent behaviour. Some are designed to reduce illnesses
Question 2: If the technology is to go forward, how should it proceed?

 How a technology is developed and how it is launched into the world is vital
 A major report was published recently by the National Academy of Sciences, Engineering and Medicine
in the United States which takes care in the usage of gene drives. Gene drives are techniques that can
increase, at an exponential rate, the occurrence of particular genetic elements in the entire population of
certain species of wild plants or animals, in combination with CRISPR Cas9 genetic modification
 The national academies report promotes the development of gene transmission technology but
provides for thorough investigation in laboratories and by means of small field research prior to the actual
release of engineered organisms into the wild
Question 3: Once norms have been set, how will the field be monitored to ensure adherence?
 There are already guidelines in relation to several aspects of research and technology dissemination, but
there are serious inconsistencies in people’s capacity to manage compliance or to hold foul players
responsible.
 Governance mechanisms for the 21st century must now address the fields of compulsory regulations and
how they can be enforced.
MANCOSA 161
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DIGITAL TRANSFORMATION

IN THE BUSINESS ENVIRONMENT

 Higher Certificate in Social Media and Communication

 Higher Certificate in Business Management

Unit 1: Industrial Revolution and Automation ........................................................................................................ 11

Unit 2: Evolution of Artificial Intelligence ............................................................................................................... 35

Unit 3: Emerging Technologies ............................................................................................................................. 64

Unit 6: Social and Ethical Considerations ........................................................................................................... 131

Answers to Revision Questions .......................................................................................................................... 157

Figure 1.2, The first Industrial Revolution \ ....................................................................................................... 15

Figure 1.3, The steam engine ........................................................................................................................... 16

Figure 1.4, The Second and Third Revolutions contrasted ............................................................................... 21

Figure 1.5, The industrial revolutions ................................................................................................................ 25

Figure 2.1, The founding members of AI .......................................................................................................... 40

Figure 2.2, A timeline of the major developments in AI..................................................................................... 41

Figure 2.3, Example of a neural network .......................................................................................................... 42

Figure 2.4, reCAPTCHA, .................................................................................................................................. 43

Figure 2.5, Word cloud common concepts associated with AI .......................................................................... 44

Figure 2.7, Illustration 1 of machine learning .................................................................................................... 50

Figure 2.8, Illustration 2 of machine learning .................................................................................................... 50

Figure 2.9, AI, Machine Learning and Deep Learning ...................................................................................... 52

Figure 4.1, Companies in Silicon Valley ........................................................................................................... 86

Figure 4.2, Silicon Valley (A Centre of Innovation and Technology) ................................................................. 87

Figure 4.3, Collaborative robots ........................................................................................................................ 92

Figure 4.4: Self-adapting assembly line ............................................................................................................ 93

Figure 5.1, The Shaduf ................................................................................................................................... 111

Figure 5.2: A dishwasher ................................................................................................................................ 112

Figure 5.4, A typewriter (Peters, 2017) .......................................................................................................... 114

Figure 5.5: Growing skills................................................................................................................................ 123

Figure 5.6, Emerging and declining roles, ...................................................................................................... 124

Figure 6.1, Societal levels at which AI risk occur ............................................................................................ 136

We hope you enjoy the module.

C. Learning Outcomes and Associated Assessment Criteria of the Module

LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE MODULE

 Develop an understanding of digital  An industrial revolution is used to describe its key

 Economical and societal issues in the World are identified

 Costs of the emerging technologies on the institutions are

D. Learning Outcomes of the Units

4IR 4th Industrial Revolution

F. How to Use this Module?

H. Prescribed and Recommended Textbook/Readings

The prescribed and recommended textbooks/readings for this module are:

Special Feature Icon Explanation

The Associated Assessment Criteria is the evaluation of the students’

Case Studies are included in different sections in this Module Guide.

You may come across links to Videos Activities as well as instructions

Unit. Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

1.1 Introduction  Introduce topic areas for the unit.

1.4 The Second Industrial  Discuss the second industrial revolution

1.8 An Outline of the Fourth  Outline the fourth industrial revolution

1.9 Summary  Summarise topic areas covered in unit.

Prescribed and Recommended Textbooks/Readings

1.2 Life Before the First Industrial Revolution

1.3 The First Industrial Revolution

2Figure 1.2, The first Industrial Revolution \

3Figure 1.3, The steam engine

Think point 1.1

In today’s world do Luddites still exist? Do people appreciate the technological

Follow this link to read more about the Flying Shuttle:

1.4 The Second Industrial Revolution

Video Activity 1.1: