Digital technologies may be the solution to the declining economic growth, high rate of unemployment, poverty, and income inequality in the Eastern Cape.
This was the key finding of a study done by Nelson Mandela University (NMU) postdoctoral fellow Dr Izunna Anyikwa which analysed the impact of digital technologies on productivity and employment in the province.
Anyikwa discussed his research during a webinar organised by the university and the Eastern Cape Social Economic Consultative Council.
Anyikwa found the global economic landscape had rapidly evolved over the past three decades in a way few experts would have predicted.
There is a growing belief that the recent widespread use of digital technologies will drive innovations, productivity, and economic growth as societies are preparing for the Fourth Industrial Revolution
Most of these changes were attributable to the advancement in digital technologies, particularly information and communications technology.
“The emergence of various technologies such as cloud computing, 5G mobile broadband, automation and robotics has led to a wide range of new products, applications and services, giving rise to a digital economy.
“There is a growing belief that the recent widespread use of digital technologies will drive innovations, productivity, and economic growth as societies are preparing for the Fourth Industrial Revolution," he said.
He said studies had found evidence that strong economic performance and digital technology were highly correlated.
“However, the benefits from the adoption of digital technologies were not automatic.
“They depend on the ability of businesses, organisations and government to deploy and make complementary investments and innovations as well as implement coherent policies to ensure their contribution to productivity and economic growth.”
He said the Eastern Cape faced the quadruple challenge of declining economic growth, high unemployment, poverty and income inequality.
“While the estimated impact of digital technologies on labour productivity growth is limited across sectors, it contributes positively to labour productivity growth in agriculture and transport industries,” he said.
The progress in enhancing human development in the areas of education remain inadequate to solve the socio-economic issues
Another NMU postdoctoral fellow, Dr Clement Moyo, said despite South Africa’s successful transition to democracy, too many people were trapped in poverty and inequality levels remained high.
“The progress in enhancing human development in the areas of education remain inadequate to solve the socio-economic issues.
“The poor performance of learners in the Eastern Cape is linked to a large extent to low-quality education, high poverty and inequality levels.
“Education inequality may perpetuate poverty levels.
“The rise in average years of schooling has been driven by the two metros (Nelson Mandela Bay and Buffalo City) and Cacadu District,” he said.
Moyo’s study found that human capital had a role to play in reducing poverty.
“Income inequality in 2019 was about 0.70,” he said.
“The finding implies that high income inequality recorded in the Eastern Cape province will worsen the problem of high poverty as poorer households will continue to be excluded from participating in economic activities.
“Poverty and low levels of income are the major hindrances to the achievement of human capital.
“Ensuring access to quality education that equips students with requisite skills is of paramount importance in the province,” he said.
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