Fourth Industrial Revolution Technologies and Sectoral Output in South Africa

Abstract This study assesses the impact of the Fourth Industrial Revolution (4IR) on sectoral output in South Africa using a pooled mean group (PMG) estimation technique from 2000 to 2021. By examining the transformative effects of advanced technologies on various sectors such as manufacturing, services, agriculture, mining, and construction, the study seeks to understand the changes in sectoral output, efficiency, and competitiveness brought about by the 4IR. The findings of the study indicate that the 4IR indicators influence the sectoral output differently. Thus, 4IR indicators (patent applications by residents, technology penetration, internet usage and mobile cellular/phone penetration) have a positive effect. At the same time, patent applications by non-residents and Information and Communication Technology (ICT) exports have a negative impact on sectoral employment. Moreover, the effect of 4IR indicators across the nine economic sectors is disparate. The paper calls for the government to increase investment in ICT infrastructure, lower the cost of facilitating patent applications, and offer grants and funding opportunities for research and development to generate new patents across sectors. Again, the government and policymakers should introduce measures to prevent non-resident patent holders from monopolizing key technologies to ensure fair access and competition across economic sectors.