Answer to youth unemployment lies in digital skill development

The South African government has devised financial incentives that allow businesses to claim back much of their spending on training and development.

youth unemployment lies in digital skill development

The South African Revenue Service grants an annual incentive of R40 000 for able-bodied learners and R60 000 for disabled learners once a learner is registered for any National Qualifications Framework 1-6 learnership. On completion, the company can claim a further R40 000 or R60 000 completion allowance, respectively. 

In addition, Sector Education and Training Authorities offer a discretionary incentive of R21 600, making it entirely possible for many companies to fund the training or upskilling of learners (who may be employed or unemployed).

The government offers these incentives in an effort to solve our unemployment crisis. 

And a crisis it is. Statistics South Africa puts the unemployment rate of our 15-to-24-year-olds at a massive 74.7% for the last quarter of 2020. This puts South Africa firmly at the top of the youth unemployment rate among the 200 countries surveyed for the Global Economy website.

So why aren’t more people using these training and development incentives to close the gap between our tragically high unemployment figures and the needs of business?


The reason is clear when you look at the most studied subjects in this country. According to the National Student Financial Aid Scheme, subjects like engineering, law and medicine are studied at universities, and office administration, marketing and hospitality feature at technical and vocational education and training colleges. 

But these are not the skills needed to move the needle on youth unemployment. Business is crying out for digital skills. The skills most sought after by businesses worldwide are technical and this is very much a reality in South Africa right now.

Capitec is currently on a hiring drive for 500 jobs, many of them tech positions in emerging fields such as machine learning and artificial intelligence. Woolworths is actively recruiting more than 100 specialists to take its digital strategy forward, and FNB is recruiting 300 specialists, mostly in technology fields such as data and quantitative skills. The worry is that they will have to look outside the country to find the people they need.

Had our training institutions been keeping up with the fourth industrial revolution (4IR) and providing skills training in these areas, our corporates would be happy to employ their graduates. Other industries are making their own plans and forming intra-industry partnerships to train our youth to be tech-savvy.

It’s excellent that business is making its own plans but it shouldn’t have to. Our formal education institutions should recognise 4IR and start providing high-level digital skills training.


The tragedy is that currently unemployed young people have talent and brains – all they need is to be shown what to do. Digitalisation comes naturally to them, almost as if they were differently wired. Technology is their friend and this is a world in which they are completely comfortable.

If educational institutions would make the connection between business needs and educational outputs and qualifications, we could solve several significant problems at once.

Published on Mail & Gurdian