At the intersection of automation, unemployment and inequality in South Africa

Farouk, Fazila

At the intersection of automation, unemployment and inequality in South Africa

Thesis / Dissertation

2024

Abstract

The emergence of the digital economy in the aftermath of the Global Financial Crisis and its intersection with the mainstream economy has led to significant labour market instability and social uncertainty. Heralding an ontological shift in the global economy, these changes coincided with the announcement of a Fourth Industrial Revolution (4IR) by the World Economic Forum, which, despite being riddled with inconsistencies as a theory of change, was adopted by the South African government as a policy guide. This gave rise to a sociological debate amongst South African scholars that problematises the 4IR as a historical force, whilst raising concerns about its neoliberal ideology. Despite the vital epistemic contribution of this debate, to date, there has been no evidence-based study that analyses the digital economy in relation to South Africa's post-apartheid transformation. This is the knowledge gap that this thesis addresses, whilst posing the question: Will the 4IR, as a metaphor for the digital economy, make a difference to how post-apartheid South Africa responds to its crisis of social and economic inequality? This question prompted a multifaceted study of three sectors, which includes: 1) an ontological study of the tech start-up sector as the driver of digital innovations; 2) a study of automation and technological unemployment in the banking industry as the fastest digitalising sector in the economy; and 3) a study of the platform economy both as a new source of jobs and as the ex-post manifestation of the sharing economy within which post capitalist tendencies exist. This thesis is a study of technological and social change that draws on Marxist phenomenological and social constructivist theories to explore power and inequality in the digital economy. It applies mixed research methods and is initiated by a survey of 120 tech start-ups, which is an original contribution to the literature. This is augmented by 15 in-depth interviews across the three sectors. The significance of this study is that it moves the field forward by gathering empirical evidence to reveal the material expression of the 4IR in South Africa. The study finds that far from being a disruptive force that reduces inequality, the 4IR as a metaphor for the digital economy, instead extends historic injustices by inventing new technologies that amplify the destructive tradition of value extraction in the South African economy—thereby, preventing economic and social change for shared prosperity.