Opinion Column

Social and Political License to Innovate: A Complex but Necessary Conversation

Publicado: August 18, 2020

The revolution of the Industry 4.0 is impacting all the productive sectors around the globe. Mining in Chile is no exception; the incorporation of digital technologies is now a priority given the improvements in productivity, sustainability, and safety that it promises generating. This imminent transformation process, however, is complex, challenging and is in constant change and high cultural and technological uncertainty.

Like the ones before, the Fourth Industrial Revolution has brought with it a great debate as to its benefits and potential threats, among the most important of which is the fear of job losses resulting from the replacement of workers with technological solutions.

In this context, the possibility of the national mining industry becoming a benchmark in the adoption of 4.0 technologies, depends on the support of all stakeholders and interest groups involved in the mining ecosystem. This is the scenario where the License to Innovate, which includes political and social dimensions, becomes relevant. This, given that the speed with which mining companies can move forward in their digital transformation will largely depend on an agile regulation, consistent with the accelerated pace of technological developments, and also on how the industry manages the changes that will be generated around work. Unlike the Social License to Operate, the License to Innovate focuses on managing a change process. That is why its focus is on generating agreements, both from the regulator and from the working community, to reduce the frictions associated with implementing new technologies.

Neither public policy issues nor labor relations are simple conversations, but this is not a good enough reason not to address them. On the regulatory side, constant adaptation to new technologies has proven to be a challenge for governments around the world. The typical cases of Uber and Airbnb show the difficulty of adapting regulations to new business models that result from technological advances and the power of regulators to curb these changes. However, if we do not define, for example, who is responsible in case of an accident of an autonomous vehicle, the environmental regulation associated with the use of hydrogen, or the standards of machine-to-machine communication, many technologies will not be able to be implemented because there is no regulatory body that governs them. This also applies to labor law, which needs to be updated to address issues such as part-time and flexible working hours, where today there is no consensus on how they should be addressed.

The speed with which mining companies can move forward in their digital transformation will largely depend on an agile regulation, consistent with the accelerated pace of technological developments, and also on how the industry manages the changes that will be generated around work»

The multiplicity of regulatory bodies associated with the incorporation of technologies requires in this regard from the industry a shared vision, so as to establish a single voice that enables the much needed public-private partnership to design and propose public policies that accompany this technological change.

On the other hand, it is no secret that technology will bring changes in the work area. This discussion must be frank and direct, so as to avoid generating false expectations and unfulfilled promises. We must start, however, by debunking some myths. The main one is that technology will destroy jobs. This is not the first time we have faced this dilemma.

In the early 80’s a debacle of work sources was predicted as a result of the massification of personal computers. Over time, we have seen that what really happened was a great creation of value and jobs as a result of the productivity gains enabled by information technologies. However, what happened was that employment changed, and it is that transition that we must now deal with.

Nowadays nobody knows for sure what the impact of the incorporation of new technologies will be in the mining industry. Much has been said about the destruction of jobs, but we rarely remember the potential for employment generation provided by local suppliers as a result of the development of an ecosystem that is becoming increasingly sophisticated and growing in size, or the opportunity presented by greener mining when developing new projects. However, what we do know is that the jobs will be different from those we know today.

Therefore dealing with this transition, requires first understanding and measuring the impact of this change process and then properly informing and educating the most vulnerable stakeholders. It is also essential to define the capacities required for future mining, define implementation deadlines, and generate training and labor reconversion programs according to our workers’ needs.

Local development cannot be left out of this conversation either. Unlike the closure of the coal mines, where the source of local value creation was eliminated, the existing mines will continue to operate. Therefore, there is an opportunity to integrate local communities into the mining value chain with the experience, knowledge, and networking of workers from the industry who can generate new service businesses. Of course, this would, on the one hand, imply the development of entrepreneurial skills and on the other, the generation of the seed capital required to start new businesses. We see then the flip side, that is, how a change process means generation of opportunities. It is precisely the latter that we must identify in order to emerge stronger as a country from the transition to the Industry 4.0.

One way to carry out this process is the development of change roadmaps, in order to generate a shared vision among the parties, identify needs and, together, design solutions. The ultimate goal of these tasks is to ensure that those who will end up leaving our work sites have the capacity to reconvert, either as suppliers, in other industries, or as entrepreneurs, avoiding at all costs repeating the events that occurred with the closure of the coal mines.

The challenges associated with this License to Innovate are complex and will require substantial efforts and resources, but if they are not addressed seriously, broadly, and comprehensively, we as an industry will never have the opportunity to generate the necessary changes to reap the benefits of mining 4.0.

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