The Fourth Industrial Revolution promises to change the way that we conduct business and industry, especially in manufacturing and agriculture, but also threatens many jobs. The Skills Development Summit presented a vision of how skills development and jobs can be retained in this shifting world, especially in the context of rural and urban development. We all needed to stay ahead of the pack and the Skills Development Summit provided the workshops needed to understand the state of this new world.

In 2019, we need to focus on the fourth industrial revolution and how it threatens to shake the very fabric of development and industry. In this rapidly changing world, it is even more important to invest in skills development. The summit aimed to provide answers and solutions to the many new challenges facing South Africa.

The summit intensely focused on the key growth areas of agriculture and manufacturing, two industries that are facing intense disruption as technology and socio-political issues shake the industry. As automation and artificial intelligence improve, we face many potential job losses. The aim of the summit was to put forth a framework of how to address these job losses through skills development.

Within this framework, the summit highlighted the need to empower women. The economic empowerment of women has been strongly linked to economic growth and prosperity and addressing gender imbalances in the economy is necessary to achieve a growing and sustainable economy. Drives to empower women in various sectors such as science, technology and tourism, as well as encouraging women entrepreneurs, are already occurring and need to be supported.

Attention in the summit also focused on providing skills development for people with disabilities, so as to increase workplace equity.

The sole essence of the summit focused on how to leverage the fourth industrial revolution to the advantage of South Africans. We know that industries will be threatened by job losses, but we also know through the studying of the previous industrial revolutions, that where there is loss, there is opportunity.

Skills development should be focusing on new industries and advanced technological skills that will put South Africans in the lead of the new global economy.

The 2019 Skills Development Summit dealt with these pressing issues that affect all stakeholders in the economy. It was an event of tantamount importance for all people and institutions serious about paving the way for a better, more advanced and richer South Africa.

The Summit took place at the CSIR Convention Centre in Pretoria and was hosted by, global speaker, think tank and business strategist, a powerhouse, Thabang Mashigo.

Few of the speakers included;

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A collection of business experts, SMMEs and multinational corporations – those that are making a significant contribution to the SA economy in particular – for many, the gathering was more than just another day of listening to experts share ideas on how they can take their enterprises to the next level.

The “buy local” ethos reverberated throughout many of the day’s discussions, reminding us as a nation that “we have the capability and ability to produce the best, and that we have pockets of excellence that warrant recognition and celebration,” said Cassel Mathale, deputy Minister of Small Business Development.

In his speech, Mathale highlighted the importance of buying locally produced goods as a catalyst to tackling the triple challenges of unemployment, inequality and poverty. “This is one of the few initiatives that provides opportunities for SMMEs and cooperatives to participate in the value chains of establishing viable businesses. Access to markets and procurement opportunities remain one of the serious challenges that are preventing SMMEs from reaching their fullest potential and ultimately participating and benefitting from the value streams of our economy. Hence it’s a great pleasure for me to be part of this summit as we discuss innovative ways to address the imperatives of localization in both the private and public sectors in growing our economies, creating jobs and broadening our skill base.”

He added: “Despite the many strides made as a country in the past 25 years, we are still battling the triple challenges of poverty, unemployment and inequality. Nelson Mandela started the road towards us defeating these challenges, and we are on this journey today led by President Cyril Ramaphosa. We need to intensify our efforts to radically transform our country by ensuring that SMMEs and cooperatives occupy their rightful space within the value stream of the economy. As the department of small business development, we have been making consented efforts irrespective of the limited media resources allocated to assist many people in business and those aspiring to venture into entrepreneurship. We know and understand that unless we collaborate with other departments, the private sector and the community at large, we will not have achieved this.”

Collaborations key to driving localization

To intensify efforts, he said the ministry has put in place a number of initiatives to support and advance the development of SMMEs and cooperatives which have borne some good results. “However, looking at the enormity of the challenges we have; the youth unemployment, the need for economic inclusion of women, and other vulnerable groups as well as the historical remnants of an education system focused on creating job seekers instead of job creators, all our efforts are a drop in the ocean and will remain as such if we do this alone. We need all hands-on deck. We are therefore excited about the collaborations with leaders of the industry, government departments and other entities in driving localization beyond this summit, thereby creating a demand for South African products and ultimately reducing unemployment, poverty and inequality. Together we can do more.”

Guided by the theme of the summit, ‘Localisation Through Investment Led Re-industrialization’, born as the result of the outcomes of the 2018 Presidential Job Summit, a lot still needs to be done by companies to grow the country’s economy and increase job opportunities, he said. Touching on one of the resolutions of the Job Summit, ‘the need for support for township and rural enterprises‘, he said: “It is very difficult for one to talk about SMMEs without referring to the township and rural enterprises, many of which are located in these areas, including in the so called informal settlements. The success of these enterprises sorely relies on inputs such as requisite skills, mentoring, coaching, appropriate marketing and procurement systems as well as access to market opportunities both within the public and private sectors.”

According to statistics by the Department of Trade Industry, the number of SMMEs in SA is sitting at 5,8 million, while their contribution to employment is estimated to be around 60%. Furthermore, the National Development Plan projects that no less than 90% of new jobs will be created by SMMEs by 2030. However, the risk to failure in running and sustaining a successful business remains a challenge for many township start-ups. According to statistics, more than 50% start-ups in South Africa fail within 24 months primarily due to inexperience and limited access to funding and operational resources.

That said, it is important that a greater deal of attention is given to small businesses in both the rural and township, “because that’s where majority of our people resides,” Mathale stressed adding: “25 years on they have not experienced or felt what we mean when we talk about economic transformation. It’s therefore imperative that we address this weakness and ensure that it happens.”

These enterprises he maintained are, “in most cases unfortunately not trusted by many potential markets and clients as they lack the so called track records and experience. They do not have the capital to access these big contracts, and moreover they cannot afford to pay for the necessary systems to ensure that they comply with the necessary industry standards.

“Of course as government we are also a culprit because sometimes we put conditions that make it impossible for small businesses to access funding from us. We need to come to the party as government. We don’t need to be reminded of what our mandate is, which is to serve our people.”

‘Thuma mina’: Consumers urged to consciously buy locally made goods

Urging businesses and citizens to join hands to the President Cyril Ramaphosa’s clarian call of ‘Thuma Mina’, he pointed out that the profound economic benefits of keeping money in local communities can never be stressed goods enough. “Fellow South Africans, the concept of localization is very strategic for the growth of a small enterprises as it increases the demand for locally made goods. It ensures that all products and services have no less than 50% local content, whereby SMMEs and companies benefit by participating in the value chains of big companies as suppliers of locally produced finished products or as service providers in the processing or even distribution levels.

Therefore this calls for all of us as consumers to consciously buy goods and services that are produced by South African companies, and especially those that bear the logo of Proudly SA. In that way, we not only uphold the national pride in the consumption of local products. We also contribute to employment creation, as these companies employ the many unemployed South Africans.”

CEO of Brand Leadership Thebe Ikalafeng talking all things brand building

He added: “And it’s not true that local people do not produce good quality goods. Standing here in front of you, I’ve put on a jacket produced and tailored by a young South African. And I’m convinced that I can stand next to any other jacket in the world and these will still compete as the best. Our people need to be given the opportunity and platform and they will perform,” he said to thunderous applause from members of the audience.

Getting ready for 4th Industrial Revolution

Mathale took audiences back to one of the previous Buy Local Summit’s resolutions, in which Minister of Small Business Development, Lindiwe Zulu made a call to all South Africans to become active citizens. “I wish to emphasize her statement that, ‘economic growth requires us to think out of the box rather than pursuing unimaginative approaches’.”

Thinking out of the box, he said, means being able to be innovative, creative and willing to embrace new ways of doing things. “The fourth industrial revolution is upon us and is a fact. Many businesses are operated digitally, and companies are gradually moving towards e-business in order for one to remain relevant in the world of business. We need to go where the world is going, which is e-commerce. Please allow me to borrow from our former President Nelson Mandela, when he said, “when people are determined they can overcome anything. With our joint determination to ‘localization and re-industrialization’, we will overcome poverty, unemployment and inequality.”

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This is in large part due to governments’ continued financial investment in the education sector.

A recent Statistics South Africa Community Survey revealed that the number of people, who indicated that they had no schooling, has declined from 3.7 million in 1996 to 2.3 million in 2016.

There had also been increases in the number of people who completed a bachelor’s degree over the same period, from 410 686 in 1996 to 1.2 million in 2016.

Yet despite these improvements the Department of Higher Education and Training acknowledged its responsibility to do even more to bridge the gap between skills development and employment.

The National Skills Authority (NSA) chairperson, Lulama Nare stated that the role of the private sector in this regard was also critical.

“The private sector needs to step up a bit and open up their spaces because government is also subsidising what these youths do in the private sector. This evening, we will be awarding the companies that are playing their role to train and retain young people in the workplace.”

The conference was held under the theme, ‘Skills Development for an Integrated and Differentiated Post-School Education and Training System: Past, Present and Future’.

Director-General at the Department of Higher Education and Training, Gwebinkundla Qonde said in the next five years, the department envisages to substantially expand access to education and training for youth and adults, regardless of whether they have completed school or not.

The following are the outcomes and proposals of the commissions during the conference:

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Statistics South Africa recently released a quarterly labour force survey, which shows that the unemployment rate rose to 27.2% from 26.7% in the first three months of this financial year. Commenting on these statistics Magapatona-Sangaret said:

“Economic growth, job creation and poverty alleviation are immense challenges that the government cannot meet alone. Public-private partnerships serve as one of the viable solutions in addressing this challenge as they are a catalyst for economic growth in South Africa”.

“Our country’s strong capital markets, vibrant economic policies, stable political climate, a competitive private sector, proud democracy and a robust economic outlook, put us in the ultimate position to enhance effective partnerships between public and private sectors for employment creation.”

Following President Ramaphosa’s State of the Nation address, Economic Development Minister Ebrahim Patel defined the four key areas which are addressed and inspired by PPPs; transfer of skills, exposure to work, job creation and entrepreneurial activity.

In 2015, the World Bank commissioned a benchmarking study ‘The 2015 Infrascope’ carried out by the Economist Intelligence Unit that evaluated the capacity of African countries to implement sustainable and efficient PPPs. South Africa scored highest overall in all. Factors favouring South Africa, versus its peers on the African continent, is that it has PPP-specific laws and policies, sufficient financial market depth to fully enable PPP financing and National Treasury as an established central unit coordinating and approving PPPs.

The unemployment rate was reported to have jumped 0.5% to 27.2% in the second quarter of 2018, which equates to 6.1 million unemployed South Africans who are looking for work. The jobless rate had remained unchanged at 26.7% in the first three months of the year and the end of 2017.

“We are all collectively responsible for doing our part when it comes to job creation in South Africa; the everyday citizen needs to prepare themselves with the appropriate education and direction to succeed when opportunity arises, the business owner needs check out the struggles of the people around him/her and be open to new business ideas, and the government and private sector need to strengthen collaborative efforts for the best interests of the South African people. We need to create an honest assessment of where we are and also where we want to be as a country.  From there, we can envision genuine economic progress for the future,” concluded Magapatona-Sangaret.

Credit: Brand South Africa

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Compiled by Priya Pitamber

A survey of South African chief executive officers found that 36% were extremely concerned about the availability of key skills, compared to a global average of 17%, stated a recent report on vocational education and training in four countries: South Africa, the UK, India and the USA.

The report, from the global skills development company, City and Guilds Group, highlighted how vocational education and training (VET) could have a substantial influence on global economies.

Vocational training is generally for a career in the technical or practical fields and includes a diverse range of careers, such as carpentry, plumbing, and beauty therapy. VET could significantly benefit individuals and businesses, but it was not getting the traction and recognition it needed to attract a large number of students, the report found.

In South Africa in particular, VET could help the country to reach its National Development goal of decent employment, as well as help to develop the skills necessary to create a capable workforce to support inclusive growth.

“The report indicates that vocational education can help to fill skills gaps, boost productivity, enhance industries and increase employment – all of which have a significant impact on individuals, businesses and the economy as a whole,” said Mike Dawe, the director of international at the City and Guilds Group.

Read the full story on: Brand South Africa

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