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ICT growth sparks jobs

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 23 Jan 2015
Hiring activity picked up by 12% from 2013 to 2014, with the IT industry being a big contributing factor.
Hiring activity picked up by 12% from 2013 to 2014, with the IT industry being a big contributing factor.

While 2014 could be considered a downer in terms of employment - thanks to the ICT sector having haemorrhaged a number of jobs - the very same sector represents an opportunity for upliftment, albeit in a limited capacity at this stage.

Yesterday, taxi app Uber announced it had created over 2 000 jobs in SA since launching in late 2013. The company is even more optimistic about the future, saying fulfilment of its strategy means more riders, more partner-drivers and more jobs. If things continue along the same vein, Uber is confident it could create another 15 000 jobs in the country over the next two years.

BMI-TechKnowledge (BMI-T) director Brian Neilson says Uber's predictions of 15 000 jobs in two years could well be realistic, if they are based on what the company is seeing in other parts of the world, as SA may still be on the early adoption part of the "s-curve".

Meanwhile, two international Internet giants have revealed they are hiring in SA, in as many weeks. Amazon is starting a large new division in Cape Town - Transaction Risk Management Systems - that will apparently require 150 team members, while Facebook recently started advertising three Johannesburg-based job opportunities.

Growth prospects

BMI-T analyst Tertia Smit says, in SA, there are 15.2 million people employed and more than five million unemployed - not to mention the 2.4 million "discouraged work seekers".

She divides the ICT job market up into three areas: ICT occupations in all vertical industry sectors, ICT sectors that employ people of all different occupations, and sectors or occupations that are enabled by ICT, like in Uber's case.

The third category is where the big opportunity for growth is, says Smit. She cites online businesses, companies using mobile devices or payment, and location-based services as three examples.

"[In the vertical industry category], where there are about 225 000 ICT-related occupations - mostly in the financial, business, retail and telecoms sectors - the first three sectors have driven ICT job growth.

"The retrenchments in the ICT industry sector (IT and telecoms companies) last year obviously negatively affected the employment numbers in this sector."

According to the December 2014 Career Junction Index, comparing 2014 to 2013, labour demand has grown considerably. "Year-on-year, hiring activity picked up by 12%. Growth within the IT industry was undoubtedly a big contributing factor towards this trend."

Cautious optimism

Despite growth, innovation and opportunities, Smit says it is unlikely to put a dent in SA's unemployment rate in the short term. "[This is] due to the small numbers of employment in the ICT sector (less than 1%) and occupations in the ICT sector (less than 2%)".

ICT expert Adrian Schofield says it will take more than the ICT sector to revitalise the local economy. "All ICTs can do is enable other activities. We have the eighth worst unemployment rate in the world, thanks to poor delivery of government services, disastrous education, and massive waste due to inept management and corruption."

This chart shows the occupational level of the 100 000 ICT occupations. These jobs are generally for the more skilled people and that also poses a problem with SA's poor education levels.
This chart shows the occupational level of the 100 000 ICT occupations. These jobs are generally for the more skilled people and that also poses a problem with SA's poor education levels.

Ovum analyst Richard Hurst says, while ICT alone will not solve the country's unemployment rate, it will certainly help. "The sector can play an important role in enabling other more labour-intense sectors such as tourism. At the same time, government and various regulatory agencies can and should give real impetus to the sector, as opposed to the ongoing platitudes that come from various government officials concerning ICT."

He says lessons could be learnt from other markets with similar circumstances, such as Indonesia and Brazil. "And perhaps we should be asking ourselves why Kenya appears to be far ahead of us on the mobile application development scale."

Mind the gap

SA's skills crisis is a huge factor in the rate at which ICT - however fast-growing - contributes to employment in the country. Smit says it is a big problem. "Although there are not huge numbers of people relative to other occupational categories, they are of critical importance."

Schofield says the skills shortage is a "major drag" on the ability to grow the ICT sector and, through ICTs, innovation and improvement elsewhere. "I wish it was as easy as fixing this one problem, but SA needs a holistic medicine, not a sticking plaster.

"If government performs a miracle and accelerates the rollout of broadband access, gets the digital TV conversion moving and implements the best ideas submitted to the National ICT Policy discussions - and sorts out its own procurement of ICTs to improve governance and service delivery - we could be on the road to recovery."

Labour force survey, second quarter 2014:

Total Employed

Employment in ICT Sector

Occupations in ICT sector

Employed

15 239 512

100 000 (0.66%)

225 000 (1.48%)

Unemployed

5 158 315

Discouraged job seeker

2 425 447

Other not economically active

15 306 683

N/A

15 438 291

Grand Total

53 568 248

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