The World Economic Forum on society discussed “how to reskill and upskill a billion people in the next decade” inviting nations like South Africa to review its education, training and development working with industry in coming with a benchmarked strategy for skilling and reskilling. Photo: Denis Balibouse/Reuters
The World Economic Forum on society discussed “how to reskill and upskill a billion people in the next decade” inviting nations like South Africa to review its education, training and development working with industry in coming with a benchmarked strategy for skilling and reskilling. Photo: Denis Balibouse/Reuters

South Africa needs renewed skills development and reskilling revolution

By Miyelani Mkhabela Time of article published Feb 6, 2020

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JOHANNESBURG – The World Economic Forum on society discussed “how to reskill and upskill a billion people in the next decade” inviting nations like South Africa to review its education, training and development working with industry in coming with a benchmarked strategy for skilling and reskilling. 

Education in every sense is one of the fundamental factors of development and Education raises people's productivity and creativity and promotes entrepreneurship and technological advances. In addition, it plays a very crucial role in securing economic and social progress and improving income distribution.

As the world faces the transformative economic, social and environmental challenges of Globalization 4.0, it has never been more important to invest in people. South Africa must consider systems thinking tools to reskill their large pool that are educated but affected by the changes in jobs or the future of work. Valuing human capital not only serves to equip individuals with the knowledge and skills to respond to systemic shifts, but it also empowers them to take part in creating a more equal, inclusive and sustainable world.

Education is and will remain critical for promoting inclusive economic growth and providing a future of opportunity for all. But as the technologies of the Fourth Industrial Revolution create new pressures on labour markets, education reform, lifelong learning and reskilling initiatives will be key to ensuring both that individuals have access to economic opportunity by remaining competitive in the new world of work, and that businesses have access to the talent they need for the jobs of the future.

The Fourth Industrial Revolution is causing a large-scale decline in some roles as they become redundant or automated. According to the 2018 Future of Jobs Report, 75 million jobs are expected to be displaced by 2022 in 20 major economies. At the same time, technological advances and new ways of working could also create 133 million new roles, driven by large-scale growth in new products and services that would allow people to work with machines and algorithms to meet the demands of demographic shifts and economic changes.

South Africa is part of the global economies that are positively and negatively affected with the current industrial revolution, that is expected to swallow random jobs such as administrative roles, tellers at retail shops, pharmacists, Lawyers, Accountants and radiologists and related professional staff. 

The South African retail sector will be undergoing an unmanageable transition that will lead to many jobs being lost by people. In large, medium and small complexes. While Accounting, Pharmacists and attorneys are already impacted with artificial intelligence. In general, robotics will be taking much-needed jobs in South Africa and the rest of the African markets. 

To proactively realise the benefits of these changes, at least 54% of all employees will need reskilling and upskilling by 2022. Yet only 30% of employees at risk of job displacement from technological changes received training in the past year, and those most at risk are often the ones who are least likely to receive any retraining at all.

Creating a reskilling revolution will require investment. For example, transitioning 95 percent of at-risk workers in the United States into new jobs through reskilling may cost more than $34 billion. Yet the private sector could today only profitably reskill about 25% of those workers, suggesting a need for business collaboration, government investment and public-private collaboration to lower costs and reach scale. 

The Department of Higher Education South Africa confirms that the purpose of their Skills Development branch is to promote and monitor the national skills development strategy. Further, it is responsible for developing and implementing appropriate legislation and policies for a sustained quality and accessible post-school education and training system.

The universities and colleges must align their education with corporates needs, we cannot continue to take family members to institutions who can’t manage to produce market expected outcomes and private colleges are worse as they are much for commercial purpose and less educational. Department of education must ensure that they have continuous assessments for private institutions so they produce expected outcomes and with universities, they all need a completely new system to nurture skills that the markets need. 

The question can be, with this department created in South Africa, why the country’s competitiveness shows to be lower? ; With the global rate of investment in education, why the outcomes are too low? and lastly, Does South Africa needs to modify its education system or South Africa needs a new education system that will be a benchmark of the global marketplace and the expected competitiveness in advance societies?

We need to look at two nations that have similar standards to our needs as a country and we have a hybrid system to assist in the economic development of the country key sectors such as manufacturing, telecommunications, agriculture and infrastructure development. 

The Department of Higher Education Skills Development strategic objectives are: To provide a dynamic interface between the workplace and learning institutions and to promote quality learning at work and for work; To promote alignment of skills development outputs to the needs of the workplace and to the broader growth needs of the country's economy; and to provide funds to support projects that are national priorities in the national skills development strategy that advance the human resource development strategy of South Africa.

The challenge with South African government institutions is poor implementation of good strategies, inefficiencies and ineffectiveness caused by human capital employed in those departments. The country also has a huge responsibility to transition with its corporates for meaningful collaboration that will prioritize skills development and reskilling employees affected by the fast-changing environment. We must instil an attitude of excellence and passion for work and that will add value in productivity South Africa. 

There is innovative quantitative cost-benefit analysis for companies’ considerations on whether to reskill current workers or fire and hire different workers. If a company chooses to reskill, the costs incurred include the costs of reskilling, wages and lost productivity while the worker retrains; benefits include post-training gains in productivity. If a company chooses to fire current workers and hire new ones, costs include severance, hiring and wages and benefits include gains in productivity.

We find that this balance sheet could be significantly extended further through public-private collaboration—such as a pooling of resources or combining of similar reskilling efforts, leading to economies of scale and lowering reskilling costs and times, significantly impacting the number of workers who could be reskilled with a positive cost-benefit balance. For example, if industry-led collaboration could reduce reskilling costs and times by 30%, nearly half of the disrupted workforce could be reskilled by employers with a positive cost-benefit balance.

If businesses work together to create economies of scale, they could collectively reskill 45% of at-risk workers. If governments join this effort, they could reskill as many as 77% of all at-risk workers, while benefiting from returns on investment in the form of increased tax returns and lower social costs including unemployment compensation. When businesses can’t profitably cover costs and governments can’t provide the solutions alone, it becomes imperative to turn to public-private partnerships that lower costs and provide concrete social benefits and actionable solutions for workers.

The World Economic Forum document on Closing the skills gap emphasized that governments in developed and emerging economies are under increasing pressure to find solutions, including by involving the private sector in areas where changes are required. Few governments, however, are able to act rapidly and collaborate with private sector actors to reform education and training systems. The banking sector transitioning to the Fourth Industrial Revolution technology investment was one of the bad scenarios of implementing the fourth industrial revolution in the South African markets as there were no proper solutions for reskilling the affected employees and secure them jobs for sustainable livelihood.

Business leaders in European and American markets believe that the shift to stakeholder capitalism is up to them which is the direct opposite to the South African business leaders. Stakeholders' demands are forcing executives and decision-makers to rethink their organizations' goals. Corporate governance is key to define the role of stakeholders within a corporation and to give a concrete meaning to “stakeholder capitalism”; The adoption of collaborative models will require new corporate governance approaches and lastly, Business leaders have a unique opportunity to transform their companies for the future.

Businesses are initiating their own programmes aimed at skilling, upskilling and reskilling their workforces (and more broadly, communities), although few are able to effect systemic change alone, buy-in by all corporates can add value as the crisis of leadership and management that listed companies complain about, its partly their responsibility in building a capable leadership for the future growth of the South African economy and its competitiveness. 

Drawing on the insights developed through the Future of Jobs Report, the Platform for Shaping the Future of the New Economy and Society has identified four key focus areas to accelerate the closing of global skills gaps: Lifelong learning and upskilling; Future readiness and employability; Innovative skills funding models and Skills anticipation and job market insight. 

Sustained economic growth remains a critical pathway out of poverty and a core driver of human development. In fact, there is overwhelming evidence that growth has been the most effective way to lift people out of poverty and improve their quality of life. For least-developed countries (LDCs) and emerging countries, economic growth is critical for expanding education, health, nutrition and survival across populations. 

With a decade left, the world is not on track to meet most of the 17 United Nations’ Sustainable Development Goals by the deadline of 2030. Budget allocations to the reskilling revolution will help South Africa to participate in industrial revolutions in the future, currently, the country can consume products of the Fourth Industrial Revolution and Imagine the fourth Industrial Revolution, but we are still too behind in terms of competitiveness to add value and be a key party foe globalisation 4.0. Leaders who talk about the Industrial revolution needs to also know that the only way to participate, it’s by repressing the skills gaps the country face and then we will build tech and manufacturing conglomerates to supply products to the global markets. 

We must be all ashamed in seeing the increasing unemployment, inequality and poverty as it’s the gauge of our leadership traits and capabilities. Leadership is solving problems, inspiring and motivating youth and the entire society. Leaders must change from looking at themselves and focus on society, achieving political freedom it’s just the beginning but realizing economic freedom for the people at large or realizing the better life for all must be our focus and we need to be mindful and reflective about the challenges facing South Africa on a daily basis. 

The South African government and all its multinationals and corporates have the capacity to redress the skills gap and build a capable human capital base that can make South Africa competitive in the global economy. We believe executives will continue in reflecting on the stakeholder capitalism or the World Economic Forum 2020 and others at the past that shaped discussions about shared growth and inclusive growth. 

Miyelani Mkhabela is an economic strategist and director of Antswisa Transaction Advisory, contactable at: [email protected] and Twitter:@miyelani_hei.


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