South Africa needs more than 49 000 scalable SMEs, growing at a rate of 20% per annum, to create 11-million jobs by 2030 and meet the National Development Plan (NDP) target.
This is according to Sean Jones, a co-founder and director of Artisan Training Institute (ATI), who adds: “Ironically, we are still battling to catch up on the backlog of 40 000 artisans apparently needed to fill needy artisan job positions, and, ultimately, to help drive the economy. But we are not managing to decrease this backlog, it would seem.
“Additionally, artisans that conclude their alleged training – and with their certificates in hand – are often badly trained, and cannot perform their duties properly. This just costs the economy because of the impact on service delivery and productivity.
“Speaking about creating 11-million jobs by 2030 just sounds like a bridge too far. That’s almost 1-million jobs per year,” Jones says.
“On top of this, the government has not really breathed life into its ambitious R1-trillion infrastructure build programme. One wonders if it just rhetoric, because the marketplace is seeing no large scale developments occurring.”
According to press reports, an allocation of about R1-trillion has been put aside for the Strategic Infrastructure Projects (SIPs) in South Africa. This is focused on the building of roads, schools, universities, harbours, power stations and other key infrastructure projects.
There was a fear of a shortage of artisans, put at 40 000 to 50 000, might hold these projects back.
But right now, says Jones, there would not be enough jobs available if these additional 40 000 artisans were trained and entered the formal market. One reason cited is the fact that the SIPs “just hasn’t picked up momentum”.
“Construction companies and engineering firms are retrenching on the back of the lack of delivery from the SIPs,” Jones points out. “This cannot be ignored.”
According to the Endeavor jobs calculator, a global tool developed by the International Labour Organisation (ILO), National Statistics Agencies and Endeavor Insights which takes into account the different factors that are essential for job creation, the country would need as many as 8,2-million small and micro enterprises to create 11-million jobs by 2030.
A micro-enterprise is a small business employing 10 people or less.
According to Stats SA’s employment data for 2014, labour market conditions in South Africa improved following the global financial meltdown, with the total number of employed people increasing between 2008 and 2014 – from 14,6-million to 15,1-million.
But, on the downside, the number of unemployed people also increased – from 4,3-million to 5,1-million – resulting in an increase in the unemployment rate from 22,5% in 2008 to 25,1% in 2014.
The South African Labour market report, published by Solidarity Research Institute, puts broad unemployment at 35,8% in SA, while the official unemployment rate is at around 25%.