Will rapid automation in SA’s economy affect the outcome of the 2024 elections?

President Cyril Ramaphosa and Gauteng premier David Makhura have recently been emphasising the importance of fourth industrial revolution (4IR) technologies and the development of township economies. This reminded me of the book authored by Oxford professor Carl Benedikt Frey titled The Technology Trap — Capital, Labour and Power in the Age of Automation.

Frey asserts that 4IR may worsen economic inequality and even influence electoral outcomes. He notes that during the 2016 US presidential election electoral districts where automation was higher tended to vote for Donald Trump. Frey observed that three swing states that were traditionally safe for the Democratic Party surprisingly voted for the Republican candidate, which he attributed largely to job losses in those states caused by automation.

The phenomenon of uneven geographical development tends to be associated with technology-related development. Major concentrations of productive resources become more predominant in certain districts, cities and new developmental nodes than in others. Technology shocks rarely happen evenly and across space. There are more robotics in Michigan than the whole of the American west, for example.

This tight concentration of 4IR technologies in some US regions led to huge automation-related job losses. In general in the US, where there are more 4IR technologies there are more social problems caused by unemployment, including higher divorce rates, more drug-related crime and higher suicide rates. Such uneven geographical development is believed to have worked against Hillary Clinton in the 2016 US presidential elections. Trump promised radical economic change, which was precisely what these voters wanted.

This might explain why ANC leaders are inclined to pressurise companies that intend retrenching employees to discourage them from going ahead. Most liberals and analysts criticise these leaders for interfering with the running of companies. However, it is very apparent that the ANC is aware that retrenchments in the private sector could lead to its downfall as national government. This brings one to this question — will rapid automation in the SA economy affect the outcome of the 2024 general elections? Your guess is as good as mine.

Could technological shocks have contributed to the decline of the ANC and DA’s electoral support during the 2019 general elections, while boosting the vote share of the EFF? The EFF advocates for “radical economic transformation” through the nationalisation of land and other strategic sectors of the economy. Its relative electoral success has been instructive. The party has a populist leader and strong message appealing to a critical segment of the population — black youths who are socio-economically marginalised. Though EFF policies have dismally failed in many socialist countries and are wildly unrealistic, they are tantalising to those who have been locked out of economic opportunities, have been retrenched, are unemployed or are victims of grinding poverty.

Though apartheid urban planning has disintegrated and technology shocks have increased the uneven geographical development phenomenon, this does not necessarily mean Johannesburg residents who live in Soweto can leave their township and go and stay in Sandton, or their counterparts in Thembisa migrate to Midrand. What provincial and local governments need to do is ensure Soweto is directly connected to Sandton, and Thembisa to Midrand, through reliable, cheap public transport and integrated spatial development. This would mean people can continue to live in Thembisa and Soweto, where housing is cheaper, and commute to Sandton and Midrand where there are better paying jobs. Because people spend most of their money where they live, this would boost township economies. On the other hand, employers would see Soweto and Thembisa as labour market zones, and this would create a virtuous circle.

Connecting places that are far from each other will be critical during the era of the 4IR. Former Johannesburg mayor Parks Tau was in the process of doing this when he unfortunately lost the 2016 local government elections. Before this, about 2007, then MEC and later Gauteng premier Paul Mashatile wanted to embark on a monorail project that would have linked Soweto to the Johannesburg central business district. The intention was to ensure no-one from Soweto had to wait more than 15 minutes for transport. It was hoped that the monorail would move about 1.5-million people per day. The project was going to be funded through a public-private partnership model, and there were to be 39 stations between Soweto and the CBD. Unfortunately, the project was cancelled after failing to get the approval of the national cabinet.

I have used the connection of Soweto and Thembisa to major commercial hubs to make a point. This should be done throughout SA. To reduce pressure from the fiscus the build, operate and transfer model can be adopted to enable the private sector to recoup its capital expenditure and the state to strengthen its balance sheet by acquiring fixed assets.

­• Dagada is a professor of practice at the University of Johannesburg. This is an extract from his recently published book “Digital commerce governance in the era of 4IR in SA”.