This primer by the South Africa in the Digital Age (SADA) initiative lays down a strategy for the country’s digital economy with a specific focus on jobs. The report lists three pathways to work including; exporting globally traded services at scale; unlocking demand for low-skilled labour through digital platforms and establishing South Africa as a frontier technology hub. SADA provides a blueprint for each of the pathways.
We at Caribou Digital are focused on platforms as a driver for new work and skilling opportunities for low-skilled South Africans, so we read this primer with interest. SADA identified four areas of high potential for this approach: blue-collar task matching (domestic services, gardening, painting, maintenance, and electrical and plumbing); transport and logistics (e-hailing platforms); food and its delivery; and tourism (Airbnb).
SADA argues that in all these areas, the platform approach could disrupt the business models of incumbent operators and bring in new players thereby creating more jobs for low-skilled South Africans. SADA also notes that more platforms will create more competition leading to a commercial incentive to upskill their supply-side partners. This definitely resonates with our research; companies we spoke to told us that they see their training programs as one way to recruit and retain the loyalty of the workers on their platforms. For this reason, among others, they are already providing upskilling programs on vocational proficiency digital literacy, financial literacy, and soft skills, which we call Platform-Led Transformational Upskilling.
To realise the benefits of platforms, SADA says the government needs to reduce the costs of access to the internet, address regulatory bottlenecks to the scaling of digital business, modernise South Africa’s labor laws for the digital age, and update South Africa’s competition framework.
SADA proposes that the following is required to develop human capital in South Africa:
The South African government will need to address the skills shortage by channeling its skills development budget into areas of the economy where it will have the most impact.
The government needs to develop a more agile accreditation framework that recognizes and funds education that is delivered digitally.
SADA puts forward that the private sector needs to institutionalise skills development because many joining the laborforce are not ‘work ready’. They state that the private sector needs to accept that building a scalable digital skills pipeline will take time and that candidates will not always have experience and the ability to ‘hit the ground running’.
We would argue that in fact some companies within the private sector, particularly digital platforms, are already institutionalising this skills training to a great degree. While we recognise the benefit of this training to the company (increased transactions and worker loyalty), we believe that governments and the development sector should do more to support these training efforts. For many businesses in Africa, margins are thin and profitability is a goal that is hard to reach, and so we should do more to acknowledge and support the value these companies bring to workers.
“Developing South Africa’s human capital for the digital age is a fundamental requirement for an inclusive and vibrant digital economy. South Africa’s education ecosystem has to be able to supply a steady pipeline of candidates with the skills necessary to develop and use technology in order for opportunities in the digital economy to be developed to scale.”