By John Young
It is in everyone’s interests that the rate of youth unemployment in South Africa comes down. StatsSA has published figures suggesting that as many as 60% of the 15-24 age group are unemployed. The rate for the 25-34 cohort is above 40%.
The single, simplest solution would be for the national economy to grow faster, but because making that happen is actually extremely complex, other solutions have to be found. And this is where collaboration between business and industry, the education sector and non-governmental organisations (NGOs) becomes vital.
Since 1998, South Africa has had Sector Education and Training Authorities (SETAs). These vocational-skills-training organisations were established by an act of parliament and there are currently 21 of them. SETAs create and manage learnerships, internships, short-course skills programmes and apprenticeships. SETAs are well placed to act as the linking factor between tertiary institutions and private companies or to ensure collaboration between NGOs and industry.
Every industry is covered by the SETA network and companies must contribute a skills levy to the appropriate SETA. This occurs within a National Skills Development Strategy.
Role of skills
Whether the goal is to prepare to work for someone else (get a job) or to encourage entrepreneurship (start a business), the need for skills remains essential.
Depending on the priority, the skills training programme would be biased in favour of work-specific skills (welding, computer skills, handling equipment) or business-related capabilities (keeping track of cashflow, marketing).
The South African Council for Graduates Cooperative (SACGRA) sets out to support both approaches, striving to develop both “competent graduates that can become successful entrepreneurs or competitive employees” and like many such hubs, SACGRA offers advice, mentorships and links to markets and opportunity. What makes SACGRA stand out is its focus on co-operatives.
Co-operatives are a successful model already widely adopted across South Africa for savings clubs known as “stokvels”. Old Mutual estimates that more then 800 000 such stokvels represent a value of R45-billion. SACGRA aims to professionalise co-operatives and prepare them to participate in two private-sector initiatives that have become a big part of the South African economic landscape, namely Supplier Development Programmes and Enterprise Development Programmes.
In terms of these programmes, large companies are obliged to or choose to help build up and train business owners (ED) which might be part of their supply chain (SD). The programmes often overlap, as it makes business sense for a large mining operation, for example, to have a successful local bus company supply its transport needs. The same would apply to cleaning and maintenance services, catering and many other categories. Given a steady client and a reliable income, these local businesses are much more likely to succeed in the long term and to create employment as they grow.
So widespread have ED and SD programmes become that national awards are now presented annually. The Business Day Supplier Awards has no fewer than 11 categories and an overall winner. That winner in 2021 was Tiger Brands, whose R100-million Dipuno Enterprise and Supplier Development Fund impressed the judges and which was cited as an illustration of the best kind of collaboration between the private sector, government, mining houses and their pipeline partners.
The financial sector has an important role in this environment. Old Mutual’s Masisizane Fund is geared to finance small, medium and micro-enterprises (SMMEs) and it is often to funds such as these that participants in SD programmes turn.
Venetia Mine, a De Beers Group mine in northern Limpopo, has more than 50 SMMEs enrolled in incubation programmes and 34 locally owned companies are doing business with the mine. This kind of cooperation creates jobs and can lead to expansion. A woman-owned business which was supplying accommodation on the mine is now in the process of expanding into the nearby town in the form of a hotel which will be in a position to grow its clientele beyond visitors to the mine.
Another example of collaboration across sectors that leads to employment is underway in the small Northern Cape town of Kuruman. Mining company Assmang is working with EduPower Skills Academy in a programme that combines skills training, enterprise development and community upliftment. Training is provided to potential call-centre operators while support is given to entrepreneur to set up a call centre. Once the trainees complete their 12-month learnerships, they are available to employed in the new business.
The country’s biggest private sector youth-employment programme is YES4YOUTH. The idea is for private businesses and corporates to take in young people for 12 months of work experience. Run since 2019, the programme had by 2023 reached the milestone of more than 131 000 placements.
The old debate about how much broad education should be in a curriculum in contrast to how much skills training there should be, is a debate that won’t ever be resolved.
What can be improved is the agility of educational and training institutions. When the economy needs new skills, how fast can the country’s training providers react?
The Chemical Industries Education and Training Authority (CHIETA) is showing how it might be done. Recognising that South Africa is going to need specialists in green hydrogen, CHIETA has set out to focus on the kind of skills that this highly specialised economic sector is going to need. Few people know about electrolysers, fuel cells and the storage requirements of hydrogen. CHIETA has developed a list of 17 specific training and skill requirements as it anticipates that about 14 000 jobs might be created in this new energy sector.
Another body exhibiting flexibility is the Food and Beverages SETA, FoodBev SETA. In 2023, it issued, together with the BRICS Business Council, the “Atlas of Emerging Jobs in the Food and Beverage Sector”. Taking into account global trends that include mechanisation, the atlas shows that bio-nutritionists, farm technicians and integration software engineers are going to be in demand. Many of these are jobs that did not exist 20 years ago, and some of the jobs that will exist in 20 years’ time have not even been thought of by the authors of the atlas.
Some universities are also showing an ability to adapt. Enterprises University of Pretoria is the skills division of the university and its short-course offering shows admirable variety. In listing its courses in advertising material, the unit flags the courses that are “trending”. These include project risk management, mine closure and rehabilitation, water quality management and information security management. Enterprise UP issued 11 185 certificates in 2022.
Business schools also need to examine their curriculums to ensure relevance. One way of staying relevant is to hire people who are active in business. Enterprise UP has 148 “subject matter experts” collaborating with staff members from 67 departments.
Hlengani Mathebula became a professor at the University of Limpopo’s Turfloop Graduate School of Leadership in 2023. He has been the managing executive of ABSA Private Bank and is the founder of Ignite Africa Advisory Services Group. Writing in the Sunday Times, Mathebula argued that students attending business schools should also have work experience because, without it “very little of what these schools teach will make sense, putting students at a disadvantage”.
Mathebula’s larger argument is that business schools can play a role in helping rich South Africans understand and work with poorer South Africans. He writes that a business school’s first challenge is to provide skills where both kinds of South Africans can “find common ground that will transform the dominant leadership trajectory and in that way transform the country”.