South African youth adapts to shifting market priorities under Industry 4.0

02 July 2018 Authored by Consultancy.co.za

As unemployment in South Africa approaches unprecedented levels, the country is responding within its means to improve its education environment, not only through increased enrolment but also by choosing to acquire the most relevant market skills. A new report by PwC reveals that over 30% of higher education students are enrolled in science, technology, engineering and mathematics (STEM) programmes.

One of the biggest factors hindering South Africa’s progress as a nation is the country’s exceptionally high unemployment rate, which stands at nearly 30% for the whole country. The numbers are driven up in particular by the constantly fluctuating youth unemployment rate, measured for people between the ages of 15 and 24.

When the economy was doing especially well – in the decade leading up to 2010 – youth unemployment was already exceptionally high at 45%. Since then, the rate has been in and around the 50% mark, and was last estimated at a staggering 57% when measured in 2017, according to Big Four accounting and advisory firm PwC.

The figure represents the highest level of unemployment recorded in any country by the International Labour Organisation. What is even more worrying is the fact that unemployment amongst female youths in the country is as much as 12% higher than that of young males. According to PwC, the whole scenario is inextricably linked to the poverty levels in the country.

Youth unemployment in South Africa

Among a range of other factors, the high rates of unemployment are a product of a skill-shortage, which is further a result of a poor education system. South Africa has low completion rates, which is evident from the fact that only half of the students who began grade 1 in 2006 eventually wrote their metric exam in 2017.

The problem is also paradoxical to a certain degree, as widespread poverty is what prevents people from being able to enroll their children in the first place. In recent decades, the country has been working from bottom up to help expand the scope of education, both in terms of reach and in terms of quality.

According to PwC, these efforts have manifested themselves in the country’s education indicators. Literacy rates in South Africa currently stand at 99%, while the number of students who have completed their matriculation has increased by 211% over the last two decades to reach nearly 12 million people.

Alongside an increase in reach, the firm has also noted a shift in the type of skills being acquired among the youth. Much has been made of the advent of industry 4.0 and its impact on jobs across the world. One in three people across the world are reportedly worried about artificial intelligence taking over their job.

This threat is particularly relevant to the South African market, where the exceptionally high unemployment rates could increase exponentially as nearly six million jobs in the country could be replaced by automated technology in the current economic scenario.

In response, the number of students engaged in STEM programmes at higher education institutions has increased by 30%. This is expected to help employment rates as the wave of automation will bring with it a number of jobs that require working in collaboration with machines/robots, the skills for which are currently being acquired by South Africa’s youth.

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