The Fourth Industrial Revolution – The Case of South Africa

ABSTRACT

On becoming President of South Africa Cyril Ramaphosa put the Fourth Industrial Revolution (4IR) into his national economic strategy, generating criticism for its neoliberal rhetoric echoing the World Economic Forum (WEF) and concern it would not create jobs. 4IR is an umbrella term for 3D-printing, artificial intelligence (AI), big data, industrial Internet of things (IIoT) and robotics. For corporations it means rethinking strategies and auto-cannibalisation of business models. For policy-makers in manufacturing nations it is supposed to raise national competitiveness and bring manufacturing home, potentially blocking developing nations from creating jobs through attracting labour-intensive manufacturing. Its effects on work and employment are forecast to be complex, potentially heightening inequality by reducing demand for low levels of skills. South Africa has a significant skills shortage, due to failings in its education system, limiting the supply of managers, researchers and workers needed for 4IR. There are also problems of poor quality infrastructure, reflecting weak governance and state capture. It has a poor record in policy formulation and implementation, especially across departments, with notable delays in cybersecurity and data protection. There is only a small domestic market and, despite aspirations, it is not an easy gateway to the rest of Africa, which has strong demographic growth but limited spending power and poor physical distribution systems. Moreover, South African firms have to compete with a strong Chinese presence.

Acknowledgements

This paper was developed from ideas in a wider-ranging paper delivered in July 2018 at the 4th Annual Competition and Economic Regulation (ACER) Conference in Johannesburg, organised by Simon Roberts. My thanks to Charley Lewis and Petrus Potgeiter for comments on earlier versions.

Disclosure statement

No potential conflict of interest was reported by the author.

ORCID

Ewan Sutherland http://orcid.org/0000-0001-5220-9605

Notes

1 His predecessor, Jacob Zuma, had been recalled by the ANC, i.e. told to resign, over allegations of corruption and state capture, causing Ramaphosa to be promoted from Deputy President.

2 His then junior minister at the Department for Telecommunications and Postal Service (DTPS), later promoted to be Minister of Communications and Digital Technologies, risked accusations of trivialisation by having jumpsuits prepared for herself and her civil servants emblazoned with a 4IR logo (SAfm radio 2018). Confusingly, these resembled the uniforms worn by her political opponents in the Economic Freedom Fighters (EFF), who advocate Marxist-mercantilist policies in order to boost domestic manufacturing.

3 Even MTN uses Mauritius as the base for its holding company for African assets and tax reduction.

4 This was supported by Temin (1997) with an economic analysis of trade patterns, showing widespread technical changes in British manufacturing industries.

5 There is an early stage robot for weeding gardens. https://www.kickstarter.com/projects/rorymackean/tertill-the-solar-powered-weeding-robot-for-home-g.

6 NASA (2018) sponsors an annual robotic mining competition to find technologies suitable for missions to Mars.