Published in Business Day – 14 March 2018
Co-authored by Vesconite Bearings Chairman, Dr Jean-Patrick Leger
Before SA lapses back into business as usual, it is worth returning briefly to that heady moment two weeks ago, when new President Cyril Ramaphosa delivered his state of the nation address to Parliament. In the speech, Ramaphosa disclosed plans for a summit to seek practical solutions and new initiatives for job creation, especially for the youth.
This was put forward within the framework of an ambitious vision of reindustrialising the country “on a scale that draws millions of job-seekers into the economy”.
It has always been challenging for the private sector to find new ways of working with the government and labour to achieve larger goals when many businesses do not regard those goals as part of their purview, particularly when businesses often feel under attack by the government.
This may explain the reluctance to come forward with new ideas. Businessmen are often concerned that whatever new ideas that emerge from the government will lead to more problems and complexities.
But if the anger ignited by the debate on land expropriation without compensation has shown anything, it is that there is an expectation that the new regime will bring meaningful change to people’s lives by challenging the economic status quo.
If business does not want to surrender ground to the populists, it should start imagining how it can contribute to a more just and equal society. Just as at Dunkirk, when a flotilla of small boats crossed the English Channel to bring home the British soldiers trapped on the beaches of France, so the country’s manufacturers can take the initiative and bring home an army of artisans and skilled workers that will be needed for the next battle: the reindustrialisation of SA.
Unlike the troops at Dunkirk, SA is not engaged in a world war, but it is embroiled in a profound crisis. Unemployment and despair, while hardly touching the enclaves of privilege, is corrosive and unsustainable. More than 6-million South Africans are unemployed, and youth unemployment remains stubbornly above 50%. Of those who are employed, many are trapped in dead-end, low-skilled jobs.
The arguments around free higher education have obscured the equally critical need for training of young people for skilled blue-collar jobs. Any implication that there is only one route to gainful employment and a decent lifestyle leaves out those who are less academically inclined. The many who do not go to university are the most economically marginalised and many despair of finding any way to escape poverty.
Apprentice and learnership schemes are a means by which youth with little work experience can gain essential experience and theoretical knowledge for job entry. The tally of apprentices is small compared with the number of students enrolled at public higher education institutions — about 112,000 apprentices compared with 620,000 university students (excluding 400,000 enrolled at Unisa) — and they are often overlooked in discussions about transforming education.
Yet SA is faced simultaneously with high unemployment and an enormous skills shortage, one that will ensure that the reindustrialisation that Ramaphosa advocates will be stymied before it starts. There is a way to deal with this conundrum that does not lay the full burden at the door of the government. It is what we call the one-for-three solution. One of us (Leger) runs a small manufacturing company in the Free State and has adopted a policy of actively training young people — in practice one apprentice or learner for every three permanent staff members.
If all SA’s manufacturer employers followed a one-for-three approach, we could train hundreds of thousands of South Africans in the much-needed practical skills that will help jumpstart the economy. Manufacturing and mining combined employ about 1.6-million permanent workers.
If state-owned enterprises and government technical and engineering services on all levels — including the municipalities — are included, the one-for-three solution could generate up to 1-million newly skilled workers into the formal economy.
The solution would build on existing programmes, some of which have stalled, and would need to be fleshed out in consultation with the government, the unions, companies big and small and the technical training institutions. It is also time for the private sector and the government to engage the universities — especially the science, technology, engineering and maths faculties — to see how some of their graduates can be absorbed into on-the-job training programmes.
Some of these discussions may take place at the president’s job summit, where we will present our proposal in detail. Critically, this national apprenticeship and learnership programme would have to be a good-faith effort to train those who would otherwise not be employed, and not an attempt to displace union labour with lower-paid interns. There could be a rewarding negotiation around preferential procurement and additional incentives for businesses that participate in the programme, which would be voluntary.
We will continue to emphasise that skills training is not just a door to opportunity for the disadvantaged or a means of dealing with the scourge of youth unemployment. It is also a necessary requirement for equipping SA with a competitive workforce capable of delivering the more prosperous future that we are striving to achieve.
The global economy is changing, and the cheap labour force that industrialised SA the first time can no longer be the country’s crutch. Competitive industrialisation in this highly technological age is taking place in the global “brain belts” and if SA aims to compete it has to build an army of skilled and semiskilled workers.
The mining sector, long the mainstay of the South African economy, is on the upswing and the shortage of skilled workers is already being felt. Any thought of taking the mining sector forward into the new technological age, where SA long held a competitive edge, is a nonstarter without a complete revision of how SA trains and equips its workers.
Ramaphosa’s state of the nation address was widely praised, but was also criticised by some for being short on detail and hard policy decisions. This is not surprising given the fact that he had to deliver the speech within one day of becoming president. But it is also because it is up to society to fill in many of the blanks.
Most importantly, it is incumbent upon manufacturing employers to make their contribution to overcoming economic stagnation and inspiring hope by building the workforce of the future.