In the 21st century, the world is required to reconfigure economic theory from what is traditionally known to be.
Does this mean that the growth of the Fourth Industrial Revolution has a positive correlation with economic growth because business will have enhanced production, which then stimulates supply?
This is where the emergence of a new economic theory creeps in. An economic theory that creates a dichotomy between growth, unemployment and income, implying excess supply and low demand. It must then redefine the role of labour given the presence of robotics.
It must redefine the role of households given the negative correlation between employment and the 4th industrial revolution.
It must regulate ways in which business operates to realign the distorted relationship between demand and supply.
It must also enhance the role of government as a regulator of this economic revolution.
This means that the government must ensure that the ripple effects do not lead to high unemployment, elitism and monopolies.
Currently, particularly in the case of South Africa, global giants are penetrating local markets.
Now, due to lack of regulation, monitoring and evaluation, it has led to local industries being forced to adapt to the current business trajectory or close shop.
These new giants dictate prices which lead to local markets shutting down, or mass retrenchments due to the digitisation of doing business.
Another avenue is that the current government seems to be taking a more reactionary approach.
One of the initiatives is infusing data analytics and coding into basic education systems.
As much as this is a good initiative, this economic revolution depicts signs of elitism towards human capital. This means only a few labourers will be absorbed into this new trajectory.
This avenue calls for a new and revived economic theory; a theory that will define the global system and redefine policies. The textbook of today must breed economists of the Fourth Industrial Revolution.
As much as this is a fantastic evolution, it must be closely monitored to avoid the emergence of global giants controlling countries without notice.
This new economy is currently sidelining the role of the government and labour, therefore leading to a lack of regulation, so the government must infuse itself into this market.
This means that this economic theory must redefine labour in a way that the definition aligns closely to business. Once this has been done, the dichotomy between unemployment and growth is curbed.
The Fourth Industrial Revolution proves in so many ways how business continues to find ways to cement its presence in the global economy, so economists must rethink their theories by incorporating the emergence of this revolution. White papers must shape the policy path which the economies of today must take.
At the end of the day, humanity is defined by economics and science, and it’s imperative they evolve in parallel to each other.
* Gamede is an economist and a political researcher. She writes in her personal capacity.
** The views expressed here are not necessarily those of Independent Media.