Fourth industrial revolution technologies and sectoral employment in South Africa

While the South African National Development Plan (NDP) 2030 emphasizes that Fourth Industrial Revolution (4IR) technologies offer potential economic growth and productivity gains in South Africa, they also risk significant job displacement and may deepen socio-economic inequalities if not appropriately managed. Thus, without targeted policies and interventions, the adoption of 4IR technologies may lead to greater unemployment and increased inequality, particularly affecting low-skilled workers and marginalized communities in South Africa. Therefore, a comprehensive analysis of how these changes can impact employment in different sectors will allow a smooth proposal of strategies to mitigate adverse effects while capitalizing on new opportunities. In doing so, the current paper uses the feasible generalized least squares (FGLS) estimation technique to examine the impact of the 4IR technologies on aggregate and disaggregated sectoral employment in South Africa from 2000 to 2021, aiming to assess how the technology advancements are reshaping the labor market across various sectors in South Africa. The results indicate that Information and Communication Technology (ICT) exports and imports and high technology exports negatively affect sectoral employment in South Africa. However, research and development, fixed broadband, internet usage, and mobile phone usage positively affect sectoral employment in the short run. Again, the sectoral analysis shows that the different 4IR indicators have a disparate effect on employment at the sectoral level. This calls for policymakers and the government to increase investments in technological education for the workforce by setting up high-quality education and training systems for learning skills for using new technology.