Immigration and private sector training vital to growth, stability

January 23rd, 2017Op-ed

South Africa must recruit skills as fast as possible, writes Ann Bernstein

South Africa’s failure to develop a functional skills pipeline is a major contributor to the country’s stagnant growth and political instability.

The shortage of skilled, experienced people across the economy (artisans, managers, professionals) constrains business expansion and contributes to sluggish growth.

Skills shortages also contribute heavily to South Africa’s burden of inequality. Skilled people in South Africa have scarcity value. Those with the tertiary education that is the entry point for many of the jobs created by our failing growth path command a high earnings premium.

The salary differential between those within this charmed circle and the less skilled is much higher in South Africa than in other comparable middleincome developing countries. Ratings agencies and investors regularly flag inequality and exclusion as mediumterm threats to stability, and skills shortages drive these concerns.

How have things come to this?

There are two ways of acquiring a broad and deep skills pool. The most important is to equip your own citizens with knowledge and skills and the ability to use them productively. The second is to compensate for shortages and adapt to swiftly moving economic developments by recruiting from abroad.

Most successful economies combine these approaches. Increasingly it is not only traditional immigrant societies (the US, Canada, Australia) that incorporate skilled immigration into their skills mix. Emerging economies such as Chile, Brazil, Singapore and even China are beginning to do so.

South Africa has been bad at both.

The inadequacies of the poorly functioning basic education system are recognised, including by the government. At many public schools, little effective learning takes place, resulting in high dropout rates from schools and postschool institutions, low pass rates and poorly skilled graduates.

In terms of raw numbers, tertiary education is a postapartheid success story. The number of people in the workforce with degrees more than doubled between 1995 and 2011 and the number of diplomas held increased 99%.

By 2015, there were 4.1 million people (11.4%) in the workforce with some kind of tertiary qualification.

However, our skills pool remains quite shallow for a country with aspirations to a highskill growth path: the average for OECD countries is 33% and for some it is as high as 55%.

In 2011 in the G20, which includes many of South Africa’s middleincome peers, 40% of people between 25 and 34 years old had tertiary qualifications.

The distribution of qualifications by field is critical: in 2013, 40% of China’s and 35% of India’s graduates were in the fields of science, technology, engineering and mathematics. In 201415, the World Economic Forum’s Global Competitiveness Report ranked South Africa 102nd out of 144 countries for availability of scientists and engineers.

The distribution of qualifications between university studies and technical and vocational education and training is vital. The government’s 2012 white paper on postschool education and training acknowledged the shortage of midlevel technical and artisan skills and promised a policy shift towards expanding numbers in technical and vocational education and training.

Student numbers have duly expanded but without the necessary expansion in the number of lecturers and capacity. At least 25% of lecturers in the sector have no teaching qualifications, more than half have no industry experience and few have experience of working as artisans.

Skilled immigration is the obvious resort to supplement our skills pool.

Every president, deputy president and minister of home affairs since 2001 has pledged to increase the number of foreign skills entering the country, but these commitments have not been matched by the political will to deliver. Which is why the green paper on international migration (August 2016) finds itself repeating these pledges.


What should be done?

Reform in basic education already centres on improving teacher effectiveness through quality teacher education, performance assessment and capacity building. Progress is slow in the face of obstructive teacher unions.

Universities need a period of consolidation and respite from relentless expansion on inadequate resources.

For technical and vocational education and training, it will be important to improve the supply and quality of instructors at public colleges, especially by recruiting those with workplace experience. However, upgrading purely public delivery will not be enough.

What is required is a drastic opening up to private sector provision, the potential of which has been viewed with official suspicion and even hostility. China’s remarkably open and varied vocational system is an inspiration.

Provision for skills training in China is a vibrant mix of provision by government (54% of colleges), private sector (23%), industry associations (15%) and stateowned enterprises (7%).

This has helped to align training with the needs of specific industries and facilitate workplace links.

Improving the public sector and opening the system to diversity and private sector resources will require more assertive, better resourced contributions from organised business.

Educational reform takes time and in this landscape, skilled immigration promises more immediate and cost effective dividends. The government’s recent green paper on managing international migration shows welcome openness to criticisms of past policy.

However, instead of moving on to propose bold reforms it tends to propose desirable change and then promptly strangles it with a list of bureaucratic requirements.

One example is the proposal for a points system for skilled immigrants, incorporating a wide range of “special requirements” for South African conditions.

This will become a bureaucratic playground in which recruitment initiatives will come to a halt.

This is just not good enough for a country that is, in the green paper’s words, “desperately short of skills”.

We need a stronger approach that recognises our urgent need to recruit skilled people across the board as quickly as possible.

Before any of this can happen, however, there has to be a commitment of political attention and will at the highest level to face up to the politics of skilled immigration.

Without this, all the declarations in the green paper will go the way of every promise of the past 17 years.

  • Ann Bernstein is head of the Centre for Development and Enterprise.

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