The 4th Industrial Revolution – a solution to unemployment?
The Employment crisis in South Africa continues to increase, as South Africa has just experienced its biggest unemployment rate in sixteen years. The Fourth Industrial Revolution(4IR) is alive and well and many believe it could potentially help solve South Africa’s unemployment crisis, whilst others disagree completely.
The current unemployment rate in South Africa has increased to 29%, which represents the highest rate since 2003. The Youth unemployment rate reached an all-time high of 58.2% in the third quarter of 2019. Only 1 in 3 young people of working age are employed. According to Statistics South Africa (StatsSA), the number of employed people increased by 62,000 between September 2018 and September 2019, while the number of unemployed people increased by 78,000, resulting in an increase of 141000 that could be employed in the labour force.
In a recently 25 year Review Report published by the Government, it was revealed that the number of people employed since 1994 has almost doubled to 16.5 million people. Despite this, unemployment has continued to climb due to the economy not being able to absorb the number of people that enter the labour market each year. In short, although the employment rate is growing, it is not at the same rate of new employable entrants.
The graph below shows South Africa’s unemployment rates from 1994 to the start of 2019.
There has been a lot of talk about 4IR and whether it has the ability to improve South Africa’s economy. Unemployment is mainly caused by the mismatch of skills, high-level entry requirements and the inability of the economy to create enough jobs to keep up with the growing labour force. Creating jobs should be government’s main approach to solving the employment crisis – the question is whether 4IR can support that.
4IR has already created jobs that did not exist before – think of the staff member that administers your online shopping once you select “Pay”, the warehouse packer that neatly packages your order, to the delivery driver that makes sure it gets to your doorstep in one piece. Online retail continues to grow as a result of massive investments, which should result in more employment.
Ride-hailing (Uber, Bolt, eDriver, etc) is another industry where jobs have been created as a result of 4IR. It has put the power of 4IR directly in the hands of commuters. Drivers who were previously unemployed and/or those who were looking for another source of income can now make a good living from being a driver in the ride-hailing industry. Some drivers have even started their own fleets of vehicles, which has fuelled entrepreneurship and employment for other drivers.
The revolution will change the way all industries operate. Banking will become more automated, smart classes could eventually replace traditional learning, self-driving cars will make traveling easier and safer. It will bring out new technologies which will process information easier and perform services with more efficiency, which will increase outputs and could create more jobs, some of which did not exist before.
However, many believe that technology is taking over current jobs that will not be replaced. In South Africa, some banks have closed down branches and retrenched workers, Multichoice plans to retrench workers in order to roll out new automated technologies. Earlier this year, President Cyril Ramaphosa warned South Africans to brace themselves for mass job losses to technology with the implementation of the 4IR. As technology advances, more jobs will be automated, limiting the need for human input.
Analysts have predicted that in the long-term online shopping will have a negative effect on South Africa’s employment, like it did in America. Employment growth in the American retail industry has remained strong, but the retailers are still shedding more jobs than they are creating. Our local sales people could get replaced by informative websites, and daily tasks that are performed by store employees could be replaced by machines or outsourced to customers. These jobs are likely to decline slowly while online employment is growing.
Employees in South Africa’s meter taxi and minibus taxi driver industries have seen a decline in earnings and employment due to the rapid growth of the ride-hailing industry. Despite this, the ride hailing industry has created more jobs than it has destroyed, as it has increased self-employment. The slight increase in unemployment due to this industry has resulted in the launch of an app called Taxi Live Africa which was designed to allow metered taxi drivers as well as private and owner taxi drivers to also operate efficiently in this competitive industry. It has recently been launched in a few cities in South Africa, and it will hopefully help increase employment in the transport industry as a whole.
4IR will require future entrants in the labour force to be equipped with skills that will be required to take on the new jobs that 4IR will create, and with the skills that will be necessary to help them succeed as entrepreneurs. This could open up more job opportunities that do not exist, which will decrease unemployment. However, currently primary and high school teachers are not being provided with training and development that they need to enable them to teach a 4IR-geared education to their learners. This could result in a further mismatch of skills in future and an increase in the rate of structural unemployment due to 4IR.
The fact remains that 4IR is taking over. What is not clear is the impact it will have on employment, particularly in a country like South Africa. Some occupations will decline, but others may be created. The jury is out – iIs the Fourth Industrial Revolution a major solution to solving South Africa’s employment crisis?
