Get set for change

Financial Mail - Investors Monthly - - Opinion -

Our youth and ex­ist­ing work­force will need to adapt to trans­form­ing labour mar­kets

The old adage that the only thing that is con­stant is change cer­tainly holds true. At a global level, we have seen many sur­prises, such as Brexit in the UK and the in­au­gu­ra­tion of Don­ald Trump as pres­i­dent of the US, and in­sta­bil­ity con­tin­ues in many parts of the world.

In SA, on­go­ing un­cer­tainty and slug­gish growth have caused many peo­ple to ac­cept that what we think has been work­ing has not worked for many cit­i­zens. Many of the struc­tures that we hold onto do not sup­port the drive for equal­ity or in­clu­sive growth, and we must face the re­al­ity that too many fel­low South Africans re­main stuck in the cy­cle of poverty, and too few are able to ac­cess eco­nomic op­por­tu­ni­ties.

SA’s un­em­ploy­ment rate is stuck at about 25%, with even higher rates for the youth, at more than 50%.

An in­ad­e­quately ed­u­cated and un­skilled work­force is one of the root causes of un­em­ploy­ment.

The chal­lenge is likely to be am­pli­fied in the com­ing years due to the “Fourth In­dus­trial Rev­o­lu­tion”, char­ac­terised by fast-paced tech­no­log­i­cal progress and deeper so­cioe­co­nomic and de­mo­graphic changes. Where one-third of jobs will not ex­ist in their cur­rent form, our youth and ex­ist­ing work­force will need to adapt to trans­form­ing labour mar­kets.

Ac­cord­ing to the World Eco­nomic Fo­rum’s (WEF) “Fu­ture of Jobs” study, the re­sult could be a net loss of more than 5m jobs in 15 ma­jor de­vel­oped and emerg­ing economies, in­clud­ing that of SA. The study high­lights that skills de­mands will change sig­nif­i­cantly over the next five years, point­ing to the im­por­tance of align­ing ed­u­ca­tion with the skills needed in the labour force.

Only a por­tion of stu­dents cur­rently en­rolled in SA’s ter­tiary in­sti­tu­tions are study­ing sub­jects that di­rectly ad­dress the need in busi­ness for sci­ence, tech­nol­ogy, en­gi­neer­ing and maths, as well as fu­ture-ori­ented skills. Many or­gan­i­sa­tions also face the chal­lenge of find­ing ap­pro­pri­ately trained grad­u­ates who have com­plex prob­lem-solv­ing, crit­i­cal think­ing and de­ci­sion-mak­ing skills, good judg­ment and cog­ni­tive flex­i­bil­ity.

Skills and de­vel­op­ment are key to SA’s trans­for­ma­tion and eco­nomic growth. We are see­ing some no­table suc­cesses, such as the R1.5bn fund pro­vided by the pri­vate sec­tor to ad­vance en­trepreneur­ship among small and medium en­ter­prises. The agree­ment be­tween gov­ern­ment and busi­ness to place 330,000 youth in paid in­tern­ships in the pri­vate sec­tor is an­other.

A num­ber of other good pri­vate-sec­tor ini­tia­tives are also un­der way, driven by reg­u­lated skills spend.

If we are to make a mean­ing­ful im­pact on un­em­ploy­ment, and achieve the scale and sus­tain­abil­ity re­quired to ad­dress the skills short­age, a more col­lab­o­ra­tive and con­certed ef­fort is re­quired.

Through the WEF’s Africa Skills Ini­tia­tive, work is be­ing done to an­tic­i­pate trends in the labour mar­ket and con­vene stake­hold­ers from busi­ness, gov­ern­ment and the ed­u­ca­tion and train­ing sec­tor.

We be­lieve that the op­por­tu­nity to en­gage and learn from oth­ers is in­valu­able, and that work­ing to­gether is key; longer-term re­form by the public sec­tor must be com­ple­mented by col­lab­o­ra­tion with the pri­vate sec­tor.

We have to ac­cept that the way things used to work will not nec­es­sar­ily be the way they con­tinue to work. We need to work to­gether and act now if we are to equip our youth and work­force for a fu­ture where the only real con­stant will be change.

Kruger is CEO of MMI Hold­ings

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