4IR Technology Adoption in the South African Airline Industry: Diffusion Patterns and Labour Market Effects

Alexis Habiyaremye () and Lorenza Monaco ()
Additional contact information
Alexis Habiyaremye: South African Research Chair in Industrial Development, University of Johannesburg
Lorenza Monaco: Economics of Innovation and Industrial Policy at the Institute for Innovation and Public Purpose, University College London and SARChI Industrial Development, University of Johannesburg.

No 2023-04, SARChI-ID Working Papers from SARChI Industrial Development (SARChI-ID), University of Johannesburg (UJ)

Abstract: The emergence of 4IR technologies has been presented as holding the promise of drastic transformations, both in the structures of productive systems and in the concomitant skills composition in the coming decades. While high expectations have been placed on the potential socio-economic benefits of these transformations for the South African economy, empirical evidence of the patterns and the effects of 4IR technology adoption is still scarce. This study aims to delve into the adoption of 4IR technologies in the South African airline industry in order to shed light on its drivers, patterns and constraints, and associated effects on labour market dynamics. Using qualitative data collected from interviews with airline executives and sectoral business associations, our findings – based on the technology organisation environment (TOE) framework – indicate that the adoption of 4IR technologies is slowly taking shape, but lagging behind industry leaders in advanced countries. The main drivers of technological change include the post-COVID-19 pursuit of safety standards compliance, cost reduction and international competitiveness. We also identify three major constraints to the adoption and diffusion of advanced technologies in local operations: the availability of commensurate infrastructure, the low scale of operations and an unfavourable trade-off between the required capital investments and the low labour costs in a context of high unemployment rates. While the industry has thus far managed to source the required technical skills for the implemented technological adaptation, the generalisation of 4IR technologies could also be impeded by technical skills shortages. In terms of labour market effects, job displacement has been limited, but is expected to increase as the transition to 4IR technology intensifies. The growth and environmental sustainability of the airline industry require a technology transition combining a more intensive use of digital technologies, green energy sources and the stimulation of alternatives to carbon-intensive air travel.

Keywords: 4IR technologies; labour-augmenting technical change; productive skills; labour displacement; airline industry (search for similar items in EconPapers)
JEL-codes: J23 L93 O33 Q42 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2023-04, Revised 2023-04
References: Add references at CitEc
Citations:

Published

Downloads: (external link)
https://www.uj.ac.za/wp-content/uploads/2021/10/sa ... aco-l-april-2023.pdf First version, 2023 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adz:wpaper:202304

Access Statistics for this paper

More papers in SARChI-ID Working Papers from SARChI Industrial Development (SARChI-ID), University of Johannesburg (UJ) Contact information at EDIRC.
Bibliographic data for series maintained by Melanie Ridgard ().