The world is in thrall to AI, described by the IMF as a wide spectrum of technologies designed to enable machines to perceive, interpret, act and learn with the intent to emulate human cognitive abilities.
AI is projected to affect about 40% of all existing jobs globally — complementing some and replacing others. Who benefits and who is displaced by AI will widen income and wealth inequality between and within countries, with those countries that already have high levels of inequality, such as South Africa, being most affected.
A good measure of AI’s likely impact on inequality is the IMF’s AI preparedness index, a tool for assessing the preparedness of 174 countries for AI. The index has four pillars: digital infrastructure; human capital; technological innovation; and legal frameworks. The IMF says these dimensions will be most relevant for smooth AI adoption.
The first three — digital infrastructure, human capital and technological innovation — are key to the trajectory of inequality. Human capital — education and skill — is a key determinant of job opportunities in South Africa. Stats SA data shows that unemployment is lowest among those with postmatric qualifications. Those who complete matric but don’t progress to higher education don’t do as well. School dropouts fare even worse.
A 2024 discussion note on AI by IMF economists said while high wage earners risked having their jobs displaced by AI, potential AI complementarity was also positively correlated with income. “Model simulations suggest that with high complementarity, high wage earners can expect a more-than-proportional increase in their labour income, leading to an increase in labour income inequality.”
Workers with college (postsecondary qualification) education, the IMF economists said, were better prepared to move from jobs at risk of being displaced by AI to those most likely to benefit from the technology. Workers without postsecondary education have “reduced mobility”.
AI is likely to make this picture worse in South Africa, partly because even among university graduates there are already huge disparities. As economist Peter Courtney has pointed out, increased spending on postsecondary education in South Africa has not translated into better outcomes.
Only 30% of full-time undergraduate students in three-year degree programmes graduate within the three-year timeframe, indicating how poorly prepared they are for university education. This preparedness is likely to have worsened over the past decade due to austerity measures aimed at arresting the spike in government debt.
Outcomes such as those described by Courtney will over time reduce the trust potential employers attach to a university qualification, pushing them to place greater value on graduates’ basic education foundation.
Digital infrastructure, according to the World Bank, refers to the network services that are necessary for individuals, businesses and governments to get online and link with local and global digital services. It comprises connectivity (through high-speed internet and internet exchange points), the internet of things (mobile devices, computers, sensors, voice-activated devices, geospatial instruments, machine-to-machine communications and vehicle-to-vehicle communications) and data repositories (data centres and clouds).
Though mobile telephony penetration rates are high in South Africa, huge disparities remain, with many people being buyers of airtime or data in R5 or R10 denominations.
Access to technological innovation is equally limited to those without the means. Just based on these three dimensions — human capital, digital infrastructure and technological innovation — most South Africans are already left behind.
• Sikhakhane, a former spokesman for the finance minister, National Treasury and South African Reserve Bank, is editor of The Conversation Africa. He writes in his personal capacity.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.