Skills in South Africa: The journey towards credible planning

ABSTRACT

Since 1994 the state has instituted active labour market policies to redress the apartheid skills legacy. The skills planning challenge continues to be how to coordinate efforts for the provision of the right skills to support inclusive economic growth, ensuring an alignment is achieved between what is required in the labour market and the supply from the education and training system. This article traces the South African journey of skills planning from late apartheid until the current time period in 2014 through a historical analysis of the political economy. The analysis reflects on the relationship between state formation in South Africa and the role of the state in directing skills development, and in the more recent period how skills planning responds to both the demands of the economy and ameliorating the historical legacies of education and skills exclusion.     

Utilisation of administrative and research databases in government departments: Providing the platform for skills planning

ABSTRACT

A high-level audit of administrative databases was conducted in more than 20 national government departments or entities. The aim was to investigate the relevance of datasets within these databases to skills planning by the government aimed at harmonising skills supply and demand in South Africa. The audit revealed that datasets have different levels of relevance and usability. There are datasets that: are relevant and immediately usable; are highly relevant and require some preparation; contain relevant variables but are currently undergoing validation and cleaning before they can be utilised; and are in an early stage of evolution. Based on these observations, the authors furthermore explore how databases can be understood from an evolutionary perspective. This investigation provides evidence that, in the field of skills planning, the government is progressing through the early phases of e-government systems development by cataloguing data resources and preparing for transactions between data users and providers.     

Structural change,industrial upgrading and China’s economic transformation*

Abstract

After more than three decades of opening up and reforms, China has moved from a low to an emerging middle-income country. The main challenge facing the country is how to sustain this momentum and develop into a high-income country and avoid the middle-income trap. In order to achieve this, industrial upgrading and structural change is crucial. This is not an easy process given that very few countries in the world achieved this in the past 50 years. What are the challenges for this transformation? How can the innovation and technological capabilities be developed to upgrade Chinese industries into one of the world’s innovation leaders? These are important questions to address for policy-makers and academics, and are the main theme of an International Conference on Transition and Economic Development (TED), held at Fudan University in 2015.     

The role of corrosive internalisation and denial of responsibility in stabilising inequality in South Africa

ABSTRACT

This paper examines how capabilities inequality is stabilised through its consequences on those at both ends of the distribution. It outlines the development of the balance model, which is argued to help highlight these consequences. Specifically, how adverse environments associated with lack of access to resources and poor treatment can lead to internal consequences which further corrode capabilities. At the same time, denial of this corrosion or its importance is critical for those who benefit from the inequality. To avoid moral constraints being triggered it is important, necessary even, for them to see those who suffer as outside of their moral universe, or their suffering to be in no way associated with their advantage. Corrosion and denial work to stabilise the system. For those in the middle of the distribution, they may work to do so in combination. Appreciating these internalised consequences is key to addressing inequality in South Africa.     

Poverty and inequality in South Africa: critical reflections

ABSTRACT

South Africa is a paradox; on the one hand, it is one of the most unequal countries in the world. Half of all South Africans continue to live in poverty, economic growth has stagnated and inflation remains high, while the unemployment rate continues to climb towards 30%. On the other hand, it has one of the most progressive constitutions in the world, with a bill of rights that foregrounds expanded socioeconomic rights. We provide an overview of the latest statistics on poverty and inequality in light of overarching economic policies, and the socioeconomic guarantees of the Constitution. We argue that South Africa’s inability to meaningfully address the high levels of inequality is due to insufficient attention to the way power reproduces inequality. We present a definition of power that includes social and market power, and emphasise the importance of a theory of power in understanding the reproduction of inequality.     

Innovations for reaching the green sustainable development goals –where will they come from?

Reaching the sustainable development goals needs innovations. This paper addresses the dynamics of green energy and resource efficiency innovations, and looks at the positioning of countries from the North and emerging economies. We use indicators for both general innovation capabilities and specific green technology capabilities. Data on general innovation capabilities reveal that the traditional OECD countries, by and large, still possess advantages compared to Newly Industrializing Countries (NICs). Literature and Patent indicators reveal that the innovation dynamics are particularly high for publications. Literature and exports indicators reveal that the South has been catching up substantially. With regard to patents, some countries of the South are catching up, but the North is still cleary leading. A detailed analysis of co-patenting and country-to-country trade data reveals a more differentiated picture: Leading countries from Europe such as Germany as still specializing on serving the markets of traditional OECD countries. Japan and Korea are very reluctant with regard to co-patenting, but specialize in exporting to China. South-South trade in green technologies is the fastest growing market segment. However, countries of the South are pursuing a differentiated strategy: Mexico is highly integrated into the US economy. Singapore and South Korea have been catching up and provide technologies especially for China. China itself is following a double strategy, with absorbing technology from the North in order to compete on markets of the North on the one hand, but increasingly specializing on becoming lead supplier for countries of the South on the other hand. The other technology providers from the South are mainly specializing in supplying other countries from the South. Thus, a segmentation of the market is likely, with green sustainability innovations in the South more likely originating in the South as well, and China being an important country to adapt knowledge from the North to the needs of the South.     

The changing nature of artisanal work and occupations: Important for understanding labour markets

ABSTRACT

The social and political conditions within which artisans are required to work have shifted globally. The South African policy concern is to train bigger quantities and improve artisanal skills quality, while simultaneously providing more opportunities for young, black and women artisans. A concern for academia is how this shifting milieu will impact on our understanding of artisanal work and occupations and what implications should this have for further research. Using the concept of occupational boundaries, we investigate, at a micro level, real and perceived change to work in three artisanal trades. The study shows that while some elements have changed, the division of labour reinforces the traditional scope of artisanal work in relation to other occupational groups. The findings reconfirm the complex relationship between changes to work and the demand for skills, and importantly highlight the sociology of work as a critical but undervalued dimension in labour market analysis.     

Equalizing opportunity through small business development: A south african perspective

The active development of the small firm sector is thought to present a vehicle highly appropriate to the task of equalizing opportunity in a very unequal society—the developing country of South Africa. This article seeks to evaluate the merits of the above assumption. It calls for a closer understanding of the unique difficulties encountered by a minority business group that has experienced a long history of prejudice and discrimination, namely the black, essentially small business sector of South Africa. The author calls for careful appraisal of available development initiatives in order to effectively serve the interests of this group.     

Bridging skills demand and supply in South Africa: The role of public and private intermediaries

ABSTRACT

Demand-led skills development requires linkages and coordination between firms and education and training organisations, which are major challenges considering that each represents a ‘self-interested’ entity. The need for a ‘collaborative project’ involving government, firms, universities and colleges, and other bodies is thus increasingly recognised. However, the crucial role of intermediaries has been largely overlooked. The article addresses this gap by investigating the main roles of public and private intermediaries across three case studies: sugarcane growing and milling, automotive component manufacturing, and the Square Kilometre Array sectoral systems of innovation. The research highlights the need for a move towards systemic thinking, to bridge across public and private objectives. It shows that private intermediaries play a larger role than is recognised in policy; that public–private intermediaries play crucial roles in coordination; and the potential for public intermediaries to contribute more effectively to systemic functioning.     

Critical representations of Southern African inequality: Transcending outmoded exhibition and museum politics

ABSTRACT

Illustrating inequality to a more general public – beyond those concerned purely with public policy and research – presents various challenges. Museums have often served a function of memorialising both the impressive steps forward and major barriers to social progress, as a form of remembrance and understanding, although the twentieth century format in South Africa was generally embedded within colonial and racist self-glorification. The potential to transcend outmoded exhibition and museum politics with a new approach based on dialogical not didactic presentation, arises with inequality. In this exploration of how such an approach might unfold in the world's most unequal major city (as judged by the Palma Ratio), Johannesburg, the concept of threshold is introduced. Physical and conceptual access through overcoming thresholds is explored through a specific site, the Old Post Office, and through two artifacts that reveal structural power that generates inequality: Durban's sanitation system and Eastern Zimbabwe's diamond fields.     

Key issues in regional growth and integration in Southern Africa

ABSTRACT

The decade to 2015 saw rapid growth in trade between Southern African Development Community (SADC) countries. Much of this growth reflected South African exports to its neighbours of diversified manufactured goods to meet growing urban consumption and to supply inputs to mining and infrastructure. While most SADC countries, aside from South Africa, grew quite rapidly over this period, their exports remained oriented to a narrow range of minerals and agricultural commodities destined to go outside the region. Drawing from a series of sectoral studies, we assess key regional issues including the investment and production decisions of firms whose operations stretch across borders, and consider the implications for a bottom-up integration agenda that could build productive capabilities across countries. Our evaluation highlights the importance of the spread of supermarkets, the need to address transport and logistics, and value chains whose competitive advantages are inherently regional, as in the cases of poultry and mining.     

Policy and trade issues for a future regional biofuels market in Southern Africa

ABSTRACT

This paper reviews the domestic political and legislative context surround biofuels initiatives to highlight what opportunities exist for establishing a biofuels trade network between South Africa (as an anchor market) and its neighbours, specifically in Zambia and Mozambique. By analysing global developments in major biofuel importers, reasons for policy inertia in South Africa, and recent experiences with biofuels investments, we suggest that the likelihood for a regional biofuels market developing is slender without addressing land-related challenges in producer countries and revising South Africa’s domestic legislation.     

Pro-poor microcredit in South Africa: cost-efficiency and productivity of South African pro-poor microfinance institutions

This article compares the performance of selected South African microcredit non-governmental organisations (NGOs) that have a poverty-alleviation focus against various benchmarks drawn from the MicroBanking Bulletin. Donors, governments and many analysts regard sustainability as the benchmark of microfinance institutions' (MFIs) performance. However, the most relevant question is whether microcredit NGOs are doing as well as they can in their context. Of particular contextual importance is income inequality in a society. South Africa has the world's second worst income inequality, after neighbouring Botswana. This creates a situation in which microcredit NGOs must recover ‘First World’ costs, particularly salaries, from revenues based on clients who can only afford loans on a par with Third World countries. Compounding this situation are structural obstacles to microenterprise in South Africa, as well as obstacles to productivity in microcredit NGOs. Taken together, this creates a ‘salary burden’ for South African microcredit NGOs, which is the highest in the world according to relevant benchmarks. South African MFI managers face significant obstacles to improving productivity to compensate for the divergence between staff and client living levels. These include an inadequate skills base, the small scale of the market, rapid labour turnover, and limited resources for capacity development. South African MFIs face the options of moving upmarket (which many have done), adopting methodological innovation or new product development, or closure. Of these, there is a strong argument to be made for supported savings and credit approaches as an alternative to NGO-based microcredit. Such an approach has the advantages of greater voluntary input and social capital formation.     

Employment quality index for the South African labour market

ABSTRACT

While the South African government specifically set targets on job creation in its numerous economic strategies since the economic transition, various local studies examined the levels and trends in labour force, employment and unemployment to evaluate if these targets were met. However, the quality of employment has not been thoroughly examined. This is the first local study that fills the existing research gap by deriving a composite, multidimensional employment quality index by taking 18 indicators from seven dimensions into consideration: wage, work hours and flexibility, employment security, income security, social benefits, skills and participation. Using the 2010–16 Quarterly Labour Force Survey data, the empirical findings indicated that highly educated, white male workers aged at least 35 years, who lived in urban areas of the Western Cape and Gauteng provinces, and were involved in high skilled occupations in the formal, public sector enjoyed significantly better employment quality.     

Estimating the future health care cost of population aging in South Africa

ABSTRACT

This paper analyses the relationship between health care expenditure and population aging in South Africa using yearly data from 1983 to 2015. Empirical evidence from an Autoregressive Distributed Lag approach to cointegration indicates that old dependency and life expectancy are major drivers of public health expenditure in South Africa besides the income. Particularly, when structural breaks are controlled for, income exhibits a long-term elasticity with respect to health spending greater than unity; suggesting that South African public health care has become a luxury good over time. Interestingly, South African public health spending is found to be responsive to demographic development only in the long run. This is consistent with the micro evidence that health expenditure increases with individual age with significant impacts in the long term. Finally, using economic and demographic projections statistics, we find that public health expenditure could roughly double in the next fifteen years ceteris paribus.     

Linking IDC finance to structural transformation and inclusivity in post-apartheid South Africa

ABSTRACT

The need for structural transformation and inclusivity in South Africa is urgent, given poor economic growth, employment and equality outcomes. This article examines the role of South Africa’s main industrial finance institution – the Industrial Development Corporation (IDC) – in providing finance for structural transformation and inclusive economic growth post-apartheid. We find that the IDC’s funding has been concentrated in capital-intensive upstream sectors of the economy, with limited concessional finance to facilitate meaningful entry of SMEs into high-value and labour-absorptive downstream sectors. The IDC’s funding model (in being a self-sustainable institution) is a significant constraining factor in this regard. Furthermore, the lack of a purposeful integrated industrial policy strategy which directs investments clearly means that IDC’s funding priorities are not clearly defined.     

Homelessness in Pretoria: Exploring the survival challenges of the homeless and their right to the city

ABSTRACT

This article documents the biographies of 60 homeless people from a range of different backgrounds in South Africa’s capital city of Pretoria. The article focuses on their right to the city and how the lack thereof affects their daily lives. It explores the challenges they face on a daily basis and the different strategies they implement in mitigating these challenges.     

Facilitator‐based interactive video as a means of assisting businesses to foster better relations with neighbouring communities

South Africa's new dynamic social environment calls for innovation to develop interaction between businesses and communities to ensure meaningful corporate social responsibility programmes. This research note examines the use of facilitator‐based interactive video, in the context of the RDP, as a communication channel for stimulating free, informal dialogue between businesses and their neighbouring communities to encourage communities to care for their natural environment and in so doing improve their quality of life.     

The implications for suppliers of the spread of supermarkets in southern Africa

ABSTRACT

The growth of supermarkets in southern Africa opens local and regional markets to suppliers through participation in supermarket supply chains. Supermarkets in the region provide an important route to market for processed foods and household consumable products. Through a regional value chain lens, this article provides an assessment of the implications of the growth of supermarkets for the participation of suppliers in Botswana, South Africa, Zambia and Zimbabwe. The research finds that, while supermarkets provide important opportunities for suppliers, they also exert considerable buyer power that limits supplier development and upgrading. High private standards, onerous requirements and costly trading terms negatively affect supplier participation in value chains. Long-term investments are required to build the capabilities of suppliers to meet supermarket requirements in terms of quality, consistency, volume and cost-competitiveness.     

加快提高自主创新能力的财政政策选择

加快提高自主创新能力、促进经济转型升级是目前我国经济发展面临的重大课题。提高自主创新能力固然要依靠市场力量的推动,但同时也需要政府的干预和调节。在政府多种调控方式中,财政政策对促进自主创新能力提高具有特殊功能和作用。为此,应探索各种有效路径进一步完善我国的财政政策,加快建立健全创新导向的财政政策体系。