Unlocking the R400 billion digital skills opportunity

South Africa’s brightest minds call for accelerated partnerships to solve critical skills shortage

The collective X Here for Us Unlocking the Power of Digital Skills opening plenary panel

South Africa’s business and digital community gathered in the heart of Johannesburg yesterday for South Africa’s first and largest gathering of the entire digital skills ecosystem, hosted by Collective X. With the country’s growing youth unemployment rate, recently reported at a staggering 45.5%, this gathering couldn’t be more timely to decode the digital skills gap and unlock the R400 billion untapped economic opportunity that digital skills can deliver to the South African economy.

The event’s theme, Here For Us: Unlocking the Power of Digital Skills attracted over 300 delegates including esteemed business stalwarts, the director-general of the Department of Communications and Digital Technology, Ms Nonkqubela Jordan-Dyani, representatives of the Presidential Youth Employment Initiative (PYEI),  public and private sector employers, digital skills training providers, and impact funders.

Evan Jones, CEO of Collective X, said in his opening address, “Our fundamental purpose as an organisation is predicated on connecting key players, partners and innovators in the digital skills sector to catalyse large-scale employment opportunities for youth.”

Recent research by Collective X partner, Harambee Youth Employment Accelerator, indicates that there are potentially 66,000 digital jobs available in South Africa, two-thirds of which are entry-level roles, suitable for young people. However, there is a significant shortage of suitably skilled individuals to fill these positions and as a result, digital work is being off-shored.

“Nearly 70% of South African businesses have resorted to offshoring their digital work to bridge this gap, resulting in an annual loss of approximately R8.5 billion in export revenue”, says Jones. “This not only hampers economic growth but also erodes the competitiveness and resilience of local industries.”

Lillian Barnard, President of Microsoft Africa, noted that if Africa captures 10% of the current AI opportunity it will expand the economy by $1.5 trillion. She further noted that South Africa is primed to maximise the AI revolution. Infrastructural investments have already been made with large organisations like Microsoft hosting data centres comparable with their European counterparts. However, the missing link is the skillset to match the readiness. Beyond pipelining for employment opportunities, developing digital skills to leverage digitally-enabled SMMEs and the employment that they create is vital for effectively and sustainably scaling.

Jones says that partnerships are the key tenet for solving the current digital skills crisis. “Our ecosystem is about the power of partnerships, so the more people we have owning and working to solve the digital skills crisis in our country, the better for all of us; our youth, employers of in-demand digital skills, and ultimately the economy of our country.”

Partnerships emerged as a driver for potential success, with Naspers SA CEO Phuti Mahanyele-Dabengwa highlighting the importance of aggregating efforts as paramount for developing the workforce of the future. Creating a pipeline of skilled workers extends beyond the South African labour market and is driven by the positioning of local talent as globally competitive in the digital realm. 

Considering that South Africa ranks 116 out of 140 nations in terms of digital skills among the population, according to a recent Global Competitiveness Report, this illustrates just how inadequate the digital skills supply is in South Africa. Mteto Nyati, Chairman of the Collective X board, touched on the importance of collaborative engagement at the conference, “we need to move beyond working and operating as individuals, transcending our differences to work on the common problem. Youth are losing hope and Collective X represents a much-needed opportunity.”

Throughout the conference, a consistent theme emerged: the importance of more effective strategic planning, including shorter timelines, swift implementation of government mandates, private sector skills-matching, and combined monetary resources to support national youth training programs. Director-General Jordan-Dyani commented, “Training programmes without the correct vacancies and sufficient budget for stipends to address basic needs are ineffective.”

The conference notably closed with the launch of Collective X’s Digital Skills Industry Fund, an outcomes-based impact fund administered by Bonds4Jobs, one of South Africa’s first and most scaled outcomes funds. The fund represents the next frontier in addressing digital skills through innovation. Supported by investment from globally recognised donor partners, R50 million has already been raised, with further funding in the pipeline. The fund aims to scale and enable tens of thousands of in-demand digital skills into the South African economy. 

The inaugural Collective X conference presented a singular opportunity to connect, ideate, and create partnerships and solutions for South Africa’s critical digital skills shortage. Collective X was supported by co-convenors Business Unity South Africa (BUSA), Business Process Enabling South Africa (BPESA), Digital Council Africa (DCA), Harambee Youth Employment Accelerator, and Youth Employment Service (YES). 

This article was published in TechDailyPost

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