South Africa faces one of the highest unemployment rates in the world, with 32,6% of the population unemployed as of 2023. The country’s youth are particularly affected, with over 60% of young people aged 15 to 24 unemployed.
By Zwelijongile Gwebityala, MD of GrowSpace
This challenge is exacerbated by economic stagnation, slow job creation, and a skills mismatch that leaves many job seekers ill-prepared for available opportunities.
In the midst of these challenges, technology is a potential game changer that could help alleviate unemployment by reshaping industries, creating new opportunities, and enhancing productivity across sectors.
Unemployment in South Africa is largely structural, driven by deep-rooted issues such as inequality and inadequate access to education. While many South Africans struggle to find work, businesses often face difficulties filling positions due to a lack of skills.
This mismatch is particularly evident in fields like Information Technology, Engineering and Healthcare, where the demand far outstrips supply.
In addition to these structural issues, South Africa’s economy has been slow to recover from the impact of COVID-19. Many industries, including Tourism and Manufacturing, were severely affected by lockdown measures, further exacerbating unemployment levels.
However, amid these challenges, the digital economy has shown resilience, with technology-driven sectors presenting new growth opportunities.
Technology is already transforming economies worldwide, and South Africa is no exception. The integration of digital tools, artificial intelligence (AI), and automation is reshaping traditional industries and creating entirely new sectors.
As the global economy becomes more digitised, digital skills are increasingly in demand. South Africa’s workforce can benefit from targeted digital skills training programs that prepare job seekers for roles in fields such as software development, data analysis, digital marketing and cybersecurity.
Moreover, digital platforms such as online freelancing marketplaces, have opened up remote work opportunities, allowing South Africans to offer their services to clients around the world. By fostering entrepreneurship and remote work, technology can help reduce unemployment, particularly among youth. Platforms like www.growspace.co.za seek to open up employment opportunities to more South Africans by reducing the information asymmetries that exist in the job market.
South Africa can draw inspiration from other countries that have successfully leveraged technology to address unemployment. India for example has built a strong technology sector that has seen them create significant employment opportunities, especially for the youth. Today, India is one of the world’s largest technology offshoring destinations.
Closer to home, Kenya’s adoption of mobile technology has enabled the rapid growth of its gig economy. M-Pesa, the country’s widely-used mobile money platform, has played a crucial role in enabling entrepreneurs to offer services across a wide range of industries. The gig economy has provided employment for thousands of young Kenyans, particularly in sectors such as transportation, e-commerce, and online freelancing.
While the potential for technology to reduce unemployment in South Africa is clear, several challenges remain. Access to affordable, high-speed internet is still limited in many parts of the country, particularly in rural areas. Data costs remain high, preventing many people from fully participating in the digital economy.
Moreover, the digital divide between those with access to technology and those without risks exacerbating inequality. Government policies that promote digital inclusion, such as expanding internet infrastructure and reducing data costs, will be essential in ensuring that the benefits of technology are widely shared.
Technology presents a significant opportunity to address unemployment in South Africa by creating new industries, transforming traditional sectors, and providing workers with the skills needed for the digital economy.
However, for technology to truly be a game changer, South Africa must invest in digital infrastructure, promote digital skills training, and foster a culture of innovation. With the right policies in place, technology could be the catalyst that helps South Africa overcome its unemployment crisis, driving sustainable growth and improving the livelihoods of millions.