Page 19 - IRMSA Risk Report 2021

1.8 OPPORTUNITIES IN DISRUPTIVE TECHNOLOGIES AND
INNOVATION

According to Dr. Jammine, the kind of disruptive technologies that are emerging provide significant opportunities for the country.
However, this requires a higher level of education and skills, especially in the new virtual environment that South Africa is entering.
The problem that we face is that our educational profile is severely lacking in the areas of mathematics, science and cognitive ability
to deal with difficult technical problems.

If we were to succeed in dealing appropriately with the educational issues in South Africa, with people rising up, innovating, creating
and being able to become productive; by getting things right on the educational front, we would have the ability to generate higher
economic growth. The ability to transfer skills is probably better than in most other African countries and, theoretically at least, the
sky is the limit. Yet, until/unless we come to grips with the growing debt problems, we will be hamstrung and unable to turn this
around.

Basani adds that, the longer the economic recession lasts and the deeper it is, the more difficult it will be for organisations to achieve
their strategies. It is, however, important to note that “necessity is the mother of invention”. We are already seeing innovation and
opportunity.

The crisis has had a direct impact on consumer behaviour. We have seen significant increases in digital channel adoption and
engagement with organisations. However, with the easing of the first wave lockdown, many consumers have returned to the more
traditional face-to-face service channels. It will be critical for organisations to understand the impact of digital transformation - on
all aspects of their value chain.

Nonkululeko Nyembezi highlights that “the level of uncertainty about the future has meant that most boards have had to confront
the issue of business model failure. Current organisational capabilities and resource structures have been challenged.” They have
had to assess whether the company is fit for purpose to remain competitive. There are significant opportunities for companies
to rethink their business models and to take advantage of a consumer base that is actually quite prepared to do things very, very
differently.

Global consumer demand for cheap alternatives and new technologies will continue to drive technological innovations. In Africa,
this will be difficult to replicate. There is space for more regionalised solutions. There will come a time when China is no longer the
cheapest producer of manufactured goods, with a move to other countries in Southeast Asia, and, increasingly, a move to Africa.
This presents a golden opportunity for Sub-Saharan Africa to pick up the slack, but will require governments to make it easier for
corporates to do business in their jurisdictions and capitalise on global technology advances.

1.9 REINFORCING THE ROLE OF THE CHIEF RISK OFFICER

Nonkululeko Nyembezi argues that, “if we talk about risk, for most organisations the pandemic we have been facing this year was
not reflected as a risk in our risk registers. The question that needs to be asked is how does the experience gained from Covid-19
change risk management practises in the immediate aftermath of the crisis, to ensure that we maintain a level of flexibility to be able
to deal with future global risk events. Even for companies that had identified a pandemic on their risk registers, and considered it in
business continuity planning, the implications were not thought through in the real world. When it came to implementing at scale,
organisations were not prepared to respond appropriately”.

Business resilience is a key risk management capability and for many organisations has been more operational than strategic. The
crisis has emphasised the importance of more strategic scenario planning, modelling and simulation, to better equip organisations
to prepare for the next crisis. Covid-19 has demonstrated, in no uncertain terms, that every one of us (individual, organisation, and
country) is much more integrated into the global system than we previously thought. Our ability to unpack, understand and manage
our integrated value chains will define our future success.

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