In a digital world where the workplace is no longer defined by geographical borders, emerging technologies like robotics, artificial intelligence (AI) and automation have the potential to save companies, increase GDP and reduce the unemployment crisis in SA.
While the World Economic Forum expects the global job loss as a result of automation to be around 85 million, this will be counteracted by 97 million new jobs which are expected to be created.
This growth in roles will not be evenly distributed around the world, and if South Africa is going to attract our fair share of these jobs, we will need to ensure we are creating in-demand skills at scale.
The latest Quarterly Labour Force Survey data released by Statistics SAshows a significant increase of 7.5 percentage points in the official unemployment rate to a record 30.8%. The unemployment rate, according to the expanded definition of unemployment to include discouraged job-seekers, increased by 1.1 percentage points to 43.1% in the third quarter compared to the second quarter.
Our high rate of youth unemployment – even among university and TVET college graduates – is one of the biggest problems we face in our country. Six-and-a-half million people are unemployed in South Africa, 63% of them under the age of 35. If we’re smart and are prepared to invest in skills, we’ll grab the opportunity that emerging technology presents to improve lives, and in the process, improve our country too.
It boils down to whether we are able to maximise the promise of the digital dividend by assessing large pools of people, finding those with the underlying talent and training them to exploit these emerging technologies.
McKinsey projects a rise in job demand in South Africa for 1.7 million employees with higher education by 2030 as a result of automation. However, SA’s graduate conversion rate will have to improve to ensure these jobs are filled with local talent.
The question becomes how can we close the digital skills gap to realise the promise of emerging employment opportunities in the workplace?
Leveraging local talent
As digitisation permeates all sectors of the economy from financial services to manufacturing, healthcare and even transportation − the need for talent with digital skills accelerates if we are to exploit these emerging technologies.
One of the key factors in realising SA’s digital talent dividend is investing in both our students and employees whose roles have become redundant because of digital migration. We need to develop the necessary skills to participate in technologies such as AI, machine learning, robotics and data science.
We can’t only rely on government; corporates have to address the issue now. They can’t wait for the school system to catch up.
Given that these digital jobs are not limited by geographic boundaries and can be performed anywhere, if we don’t invest in local talent, new jobs will be created elsewhere and South Africa’s current record unemployment levels will be exacerbated. Local companies will source digitally skilled talent elsewhere.
If we invest in skills, we can increase the digital talent dividend by providing many digital services to overseas countries, just as we have created thousands of call centre jobs servicing companies around the globe.
In this scenario of exporting services, a weak rand is a positive factor and will positively contribute to GDP growth.
With the division of work between humans and machines expected to reach 50:50 by 2025, this necessitates strengthening South Africa’s education system to generate new technology-related and life skills that are needed at scale to facilitate the massive workforce transition ahead.
Long-term, there is no alternative but to fix our broken education system, particularly when it comes to STEM subjects.
We can’t only rely on government; corporates have to address the issue now. They can’t wait for the school system to catch up.
We need to get tablets and Internet connections into the hands of our learners and guide them to online resources to build skills. This needs to be addressed at school level. Primary school children need to learn to code. Education has to be practical and implementable.
In order to realise this opportunity and counteract workforce displacement from automation, South Africa’s current graduate conversion rate needs to increase to avoid a serious skills shortfall across the economy.
According to government’s publication Towards a 25-year review, while throughput has improved at university, only 22% of students completed their three-year degree within three years using the 2010 cohort. This is still very low.
At university level there is a huge dropout rate at the end of first year − resulting in a massive capacity problem. Students are highly unlikely to complete their degree. Many learners leave the system because of financial difficulties, but many do so because of poor subject choices and enrolling in courses that they are ill-suited to, or courses that are in low demand.
One solution to this is how we assess learners upfront to make sure they have aptitude to do the work they are being trained for. This means assessing at scale for cognitive ability, written and spoken competencies, numeracy and attention to detail.
Another solution is learnerships, where students are groomed in practical learning that emulates the workplace through case studies, assignments and mini projects so they can add value in their roles immediately and become an asset to the organisations they are employed by.
Our experience is that once deployed into the workplace, if they are mentored through their first year to make sure they assimilate into the organisation successfully, in more than 80% of cases they become permanently employed in the organisation that hosts their learnership.
A force for good
One of the key necessities of digital disruption is preparing the workforce to use and integrate emerging technologies. Used effectively, digital technologies increase a business’s agility, deliver better customer value and ensure they remain competitive.
Preparation lies in reskilling. Jobs in call centres, bank branches and retail outlets will become redundant as customers migrate to e-commerce and self-service. There is a possibility to reskill employees whose jobs are affected so they remain in the workforce. This can be achieved by assessing for ability, and for those with the aptitude, investing in their skills so that they can take the digital jobs that are emerging.
It is much better to reabsorb employees than to displace them. These employees have networks and institutional knowledge, making them more valuable than new employees coming in from the outside.
Companies can improve their BEE scorecard by investing in learnerships, and reduce the cost of these by taking advantage of government grants.
Used effectively, technology has the potential to create much-needed employment and catalyse inclusive growth for a more diversified workforce.
According to McKinsey, productivity gains from digitisation and machine learning have the potential to triple South Africa’s productivity growth, more than double growth in per capita income, and add more than a percentage point to South Africa’s real GDP growth rate over the next decade.
The ROI is obvious for companies that want to innovate, become leaner and re-engineer time-consuming and expensive manual processes, enhanced by the inevitable by-product of improved levels of customer service.