Each LMIP Briefing is an evidence-based contribution to informing the development of a skills planning mechanism for South Africa. Briefings showcase our cutting edge research and aim to highlight key trends and potential implications from LMIP research projects.

LMIP Briefing 22

An assessment of the skills demand implications of government’s economic development policies

In an effort to stimulate economic development and reduce unemployment by creating jobs, government has initiated a number of sectoral and regional growth strategies. Government is to be applauded on its interventionist approach to job creation. However, the question remains whether these strategies have sufficiently considered and planned for, the skills needed for successful implementation. 

Our research explored the potential disconnect through an assessment of the skills demand implications of government’s economic development policies. The main objective was to generate a broad estimate of the skills required to implement national, provincial and metropolitan municipality development strategies, including programmes that are specifically designed as job-creating projects. What are the current and future skills needs of South Africa’s development strategies, and at what levels - high, medium or low – are these required?

A review of development strategies

We conducted a review of 27 development strategy documents from both the national and provincial governments, as well as the major metropolitan municipalities. The review focused on the main growth strategies, describing the disciplinary and occupational domains, and levels of skills required. It also summarised specific skills targets provided, if any.

The analysis revealed that the South African government is interventionist regarding unemployment – it embarks on growth strategies to create jobs and grow the economy. However, although these strategies are generally clear about the types of jobs being created, they are less explicit about the skills needed to fill these positions. Few national development strategies provided accurate assessments of the number of jobs to be created, and the skills required to fill them. Moreover, those that do provide assessments, like the National Development Plan (NDP) or the New Growth Plan (NGP), provide estimates which seem unrealistic. Nor do they reveal the methodological guidelines used in these assessments.

The review therefore confirmed that most national development strategies do not adequately consider the implications of their plans for the nation’s skills base, threatening the achievement of governments’ developmental goals.

A simultaneous demand for high and low-level skills

Where growth plans do provide some indication of their skills requirements, gaps largely exist in low-skill occupations, like those demanded in the productive industries, or in high-skill applications, like those demanded by SET industries or within the knowledge-based economy. The challenge to the state is to generate highly qualified individuals, while at the same time creating low wage jobs.

The strategies surveyed indicate that the state is attempting to do both. However, it is clear that the number of low wage jobs that are to be created are not enough to sufficiently respond to South Africa’s unemployment crisis.

Matching skills demand to achieve national development strategies with current and future skills supply remains a major hurdle towards reducing unemployment and increasing productivity in South Africa. Moving forward, it is imperative that when job creation plans are generated, the plans must include an accurate and realistic estimate of skills requirements. Such forecasts need to be aligned with skills planning processes at the national, regional, and local levels.