4th Industrial Revolution and Global Value Chains: Power and Technological Inequality in the South African and Thai Automotive Value Chains

Abstract:

The need to cautiously analyse the transition towards the 4th Industrial Revolution (4IR) in a context of Global Value Chains (GVCs) should involve an analysis of the impact of technological changes on productive structures, firms, and workers in both the Global North and the Global South. Analysing these changes should also entail considering both potential benefits and risks associated with the change process. In this paper, we argue that understanding how different types of power are distributed and exercised along GVCs between the various stakeholders can inform a realistic picture of potentially increasing divides that could significantly hamper the sustainability of the 4IR transition process. Drawing insights from a study of the auto and plastics value chains in South Africa and Thailand (Monaco, Bell & Nyamwena, 2019; Bell & Monaco, 2021), this paper claims that asymmetries in the distribution of Power, and the specific interplay between market, social and political power (see Phillips, 2017), can result in uneven access to smart technologies and a growing technological divide. This uneven access to smart technologies, in turn, is causing an unequal integration into GVCs, potentially exacerbating three kinds of technological inequality: at a country-level, inter-firm level, and because of a re-composition in employment, skills inequality.

Overall, whilst building on an empirical base and drawing on direct experiences with firms and industry associations in both countries, this paper mainly aims to spur a theoretical debate. From an empirical viewpoint, extracting information from six selected firm case studies (large domestically-owned tier 1 firms in Thailand, one multinational tier 1 supplier and two tier 2 suppliers in SA) and interviews with business associations (PlasticSA, ASCCI, AIDC, NAACAM and NAMSA in South Africa; PITH, TAPMA and UNIDO Thailand in Thailand), the paper intends to highlight the gap between the official narrative on Industry 4.0 and actual firms experiences in relation to technology acquisition, employment and skills development. From a theoretical perspective, the present work intervenes in several debates, and aims to connect different discussions. Firstly, it engages with the literature on Global Value Chains, from a Political Economy and Global South viewpoint. Secondly, it aims to contribute to a critical reading of the transition to a 4th Industrial Revolution, highlighting both risks and potential benefits associated with the acquisition of 4IR technologies in an era of GVCs. Finally, and in relation to the analysed case studies, it unpacks concepts of Power and Inequality, seeking to explain typologies of power linked to, and determining, potentially increasing inequalities, and the kind of inequalities the 4IR transition may generate or exacerbate. Through the comparative analysis, the paper eventually concludes with an assessment of the factors that place Thailand in a relatively more favourable position compared to South Africa, and of the reasons for South Africa’s relative weakness. In addition, the paper also underlines the competitive advantage of specific types of firms within the auto GVC and workers within firms.