A working paper by Caitlin Allen Whitehead, Research Analyst, Development Policy Research Unit - University of Cape Town, Haroon Bhorat, Robert Hill, Timothy Köhler and François Steenkamp

This paper examines the potential employment displacement effects of technologies related to the Fourth Industrial Revolution (4IR) on the MER sector, by observing this risk through the lens of the task content of occupations or the routinisation hypothesis. It uses network analytics to develop an MER sector occupation space, which shows the occupational structure of the MER sector labour force. Given the occupational structure of the sector, it identifies occupations at high risk of displacement – i.e. what tasks, and hence what occupations, are most at risk of being automated, computerised or digitised.

Drawing on household survey data, it explores the characteristics of workers who occupy these high-risk occupations in an attempt at identifying a typology of individuals most likely to be deleteriously impacted on by 4IR technologies. Three implications emerge: Firstly, technology-induced employment displacement is likely to jeopardise low- to medium-skill employment in the production cluster occupations, and correspondingly result in an increase in the relative demand for semi- and high-skilled nonproduction cluster occupations.

Second, the non-random distribution of high-risk occupations across the two clusters of the occupation space suggests that the skill transition to shift workers from high to low-risk occupations is long, and in the event of substantial uptake of employment displacing technologies across the sector, technological unemployment is that much harder to mitigate. Third, the relatively high employment share associated with high-risk occupations in the production cluster indicates that the potential displacement effects resulting in technological unemployment are likely to be substantial..