Addressing the skills shortage in SA will reduce youth unemployment

There is a great demand for digital skilled employees across the board

An astounding 74% of South Africa’s youth is unemployed, while at the same time an estimated 77 000 jobs are available, but nobody has the correct skills to do them. Add to this the fact that more than 300 000 jobs have been outsourced to employees who live overseas, and it becomes clear that addressing the skills shortage in our country, particularly in the digital sector, is key to reducing our youth unemployment.

This was according to Takealot Group CEO Mamongae Mahlare, who opened the proceedings in a webinar sponsored by Takealot Group, hosted by the Mail & Guardian and moderated by radio and television news anchor Thembekile Mrototo. The lively discussion tackled several issues concerning how to address the skills deficit in the digital economy, to help solve the pressing youth unemployment crisis.

Mahlare said: “We are fundamentally committed to playing a role in addressing these issues, and we believe that the digital economy is a powerful way to address unemployment and create job opportunities. A key part in doing so is creating awareness about opportunities in the digital economy, and the fact that there is a broad spectrum available, for both skilled and unskilled job seekers.” 

The technical roles are the catalyst to creating more job opportunities, so the question becomes, how do we increase the supply of these roles in South Africa? The world is changing, so it is important that we train our youth for the jobs of the future.

Nompumelelo Mokou, Managing Director of Dimension Data South Africa, said that there is a significant skills gap in the digital sector, both in South Africa and globally. Key technical skills for tomorrow are software and application development, infrastructure engineering, cybersecurity and the like. Her Saturday School started teaching STEM skills, then moved onto teaching digital and other skills such as leadership. The school equips learners with diplomas that enable them to attend university, and creates a pipeline of skills. “Africa has the youngest median age across the globe, and addressing the digital gap will create a talent hub,” said Mokou.

She provided some success stories. One example is a young mother who learned the new tech and is now a sought-after programmer. Another was a young child who learned from gaming and also went on to become a programmer. “Training the youth in key skills will allow South Africa to become competitive — we have to develop a constant pipeline of these skills,” Mokou added.

Chair of Business Systems Group Mteto Nyati said South Africa’s growth is down to below 2.1%, which is insufficient. Two things are driving this: one is load-shedding, and the other is the shortage of skills. Almost all industries rely on technology to operate and grow, underscoring the pressing need for digital skills. This challenge has become a crisis and must be treated as such; it is also a great opportunity that we have so many jobs available. 

“When I worked at Microsoft we took people off the street and within a year, with the correct training, they were able to contribute to the company,” said Nyati. “We need to see our young people differently and seek ways to liberate their potential.”

SA SME Fund Investment Principle Lumka Mlambo said that the Fund was created by the government and 50 of South Africa’s largest corporations, which together contributed R1.4 billion to support entrepreneurs and small businesses. The SME Fund supports other funds and fund managers to help the South African economy to grow. It has partnered with the Gauteng government to create a debt fund of R200 million for entrepreneurs, it supports accelerators that help small businesses to scale, and it helps managers to develop investment skills. The idea is to create an ecosystem that increases digital and financial literacy. 

Mahlare said that there is a great demand for digital skilled employees across the board. Many young people are also starting their own businesses, which enable, for instance, transactions and logistics, not just in South Africa, but globally, as there are no borders in the digital world. Any kid with a great idea now has access to the market because of the digital age. The front end of sites like Takealot.com is the shop front, and both the front and back ends require tech skills, but the delivery team does not, which makes digital businesses accessible to skilled and unskilled individuals playing unique roles in the value chain. 

Nyathi said we need to bring the various stakeholders together to address the national crisis of skills development. We have seen where young people have qualifications but are completely unprepared to add value in the workplace. A standard qualification is needed, said Nyathi, so employers know that someone who has this qualification will be able to do the job required. Matching demand with the correct training is also essential. 

Questions from the audience

What is the source of the data that says there are 77 000 jobs available in SA?

Mahlare said that this data comes from reliable sources, and that many companies complain that there are jobs available, but not the people with skills for them. There is definitely a shortage of digital skills in SA.

Can we access the digital market without getting the appropriate degrees?

Nyathi said our education system in general does not equip learners for the workplace. We need to give people the skills they need to obtain work, and there are many organisations that do pass on these skills. There is a common interest in upskilling the youth so they can contribute. The youth must also take the initiative, and not wait for handouts.

Are robotics and coding the correct paths to digitisation? 

Mokou replied that they can be doorways into digital skills. All companies need someone who can code to set up the systems they require. You need to be able to understand what is available on the open market in order to use it properly. “At Dimension Data our goal is to empower people to access not just local but also global markets, all the way up from the formative years of training.”

Is there a link between the success of Takealot and SMEs? 

Mahlare said Takealot does support SMEs, which are listed on the website — over 55% of what is sold comes from SMEs. Mr D has 10 000 restaurant partners that now have access to many more customers than they had before. Takealot supports 33 000 jobs after just 11 years of operations; it supports and enables SMEs, and that in turn grows the South African economy and creates jobs. 

Are South Africans on board with the digital world? 

Nyathi said many South Africans regardless of education level know how to use mobile phones, and can take part in e-commerce because these phones are intuitive to use. The service providers have to also educate consumers so that they know, for instance, which websites are secure and can be trusted. For most young people, the digital world is second nature, but nobody can be left behind. Accessing the digital world can save money: for example, if something can be delivered, it saves having to take a taxi to fetch it, and that saved money can be used more productively.

Mahlare said education about digital services must be ongoing, to overcome people’s distrust of them. Pick-up points for Takealot.com and Superbalist, for example, serve as a physical manifestation of a digital interaction. Digital services make access more equitable for consumers. Familiarity creates trust and companies must deliver on what they promise. 

Is there innovation happening in South Africa?

Mhlambo said there is a lot of innovation going on, in many fields; for instance, South African biotechnologists are working on providing plant and meat alternatives for some retailers. Another example of local innovation is Yoco. There’s also a lot of great technologies coming out of our universities.

Closing remarks

Mokou said that reliable and secure data is needed to develop trust. The digital world can help us to save time and live better. Young people must become aware of digital technologies and skills and become part of the solution. 

Nyathi said we are nowhere close to realising our full potential, and we can’t wait for the government to catch up; as individuals and companies, we must take action. This applies especially to the digital sector, so let us continue to invest in it and develop it.

Mlambo said innovation is a great disruptor. Skills development means more job creation.

Mahlare said in South Africa e-commerce is only at 4% of retail, whereas in peer countries it sits at between 12% and 20%, so there are many opportunities in this sector, and there is a lot of optimism about the digital sector being able to create jobs. 

“The digital economy is the great equaliser — there are no constraints in terms of your age, your location or your ideas. To achieve our full potential will require entrepreneurs and great ideas, and funding, but most importantly, it will require an enabling and regulated environment to maximise the full potential of this sector and of the youth in this country.”