Digital transformation and its effects on socioeconomic outcomes in South Africa: a micro-analysis of digital transformation on economic and social welfare.

Abstract

Digital Transformation is the present era’s wave of technological transformation, pervasive and fast-paced with the promise of unparalleled human development and progression. Various studies have presented opportunities in sustainability, increased income, increased opportunities for entrepreneurship, social inclusion and equalization. However, challenges have also been noted including technology-induced job displacement and its potential to displace the incomes of people. This study is an attempt to map the societal conditions under which digital transformation can be instrumental in generating net social and economic welfare. Using a mixed-methods approach, the study investigates socioeconomic dynamics of individuals and households, termed the physical divide, juxtaposed against the digital transformation processes. In one of the major findings of the study, it was concluded that where digital transformation occurs under broadly under-skilled labour force, and poorly resourced social institutions and arrangements, digital transformation will more likely exacerbate socioeconomic inequalities leading to net welfare loss. The study also established the existence of a physical and digital divide of long duration in South Africa, with the inequalities likely to engender losses in welfare due to fast-paced change under digital transformation. The study also established that socioeconomic characteristics, skills and job competencies differ sharply across population groupings and continue based on access to developmental opportunities, assets, facilities and services which must be resolved for successful digital transformation.