According to Statistics South Africa, the country has more economically inactive people than those making up its labour force. Professor Mthunzi Mdwaba, International Organization of Employers (IOE) vice-president to the International Labour Organization (ILO) and chairman of Productivity SA, explains how to change the status quo and prepare South Africa for the new world of work.
How do you think Covid-19 has affected the landscape of work in South Africa?
The devastation wrought by Covid-19 has been exacerbated by the pre-existing structural flaws in our economy: low growth, youth unemployment, the gender gap, insufficient social support, and persistent informality. One in every six South Africans works in the informal sector, yet the pandemic has revealed in just how precarious a position they are. Informality is not just about spaza shops but also app-based businesses – during lockdown, drivers working for Lyft, Bolt and Uber received no financial assistance as they are not considered employees. In addition, companies tend to be quick to drop training and human resourcing or capital development during crises, a trend that has been sadly noted during this pandemic as well, which does not bode well for the future.
It will exacerbate another pre-existing challenge of having even fewer HR professionals serving on boards and companies cannot make informed, smart, and sustainable people-related decisions without their input.
What can companies learn from Covid-19 propelling us into the digital world with such urgency?
The pandemic has shown us that, to be globally competitive, we need to understand the implications of the future of work, for example the role of technology, digitisation, and increased globalisation. South Africa dropped to 59 out of 63 countries on the Institute of Management Development’s World Competitiveness Yearbook in 2020 – an all-time low. We need to urgently invest in digital tools and digital talent platforms, which provide equal work opportunities for all – women, informal workers, rural workers, the physically challenged – in order to bring us closer to achieving inclusivity and social justice. We also need to focus on skilling, upskilling and reskilling the workforce of tomorrow – skills are at the heart of transitioning to the future of work.
The ILO has been advocating for South Africa to think harder about the future of jobs. What are some of the specific actions you would like to see the government taking? We need major policy shifts and structural reforms to achieve inclusive, sustainable economic growth. We need to invest in human capital to improve productivity, which is incidentally not even mentioned in the National Development Plan. All leading competitive countries focus on productivity (and on arresting corrupt officials in government, as was done in Singapore – something we simply must do).
Although government frequently extols the virtues of entrepreneurship, there is no doubt that we have failed our entrepreneurs. Start-ups are many, with high failure rates and few sustainable jobs created. We focus on contributing skills to existing industries, but we do not support disruptors and there is no alignment between ideas and skills, which means start-ups cannot be taken to the next level. Unless we act boldly and urgently, we are facing imminent disaster. Entrepreneurs like Elon Musk and Clive Calder had to leave South Africa for their dreams to be realised as we fail to appreciate innovation and intellectual property or equate them with fundable projects.
How can companies help to futureproof their businesses and their employees for the Fourth Industrial Revolution (4IR)?
4IR labelling is a red herring – it is not about moving from the Third to the Fourth Industrial Revolution, but about managing the transition of people from one platform to the next. Some rural areas in South Africa are not even participating in the Third Industrial Revolution. One of the mega-trends relating to the future of work is the shortage of skilled labour. It is vital to align human capital development with technological advancement, and SMEs must join forces to leverage opportunities and work with multinationals on developing training apprenticeships.
As much as technology may displace lower-skilled jobs, it also creates new opportunities for more creative and innovative human work – how should our education system be adapted to accommodate this shift?
According to the 2019 report Changing Business and Opportunities for Employer and Business Organizations, a joint publication of the ILO Bureau for Employers’ Activities and the IOE, 60% of graduates are not adequately prepared for current work. We need to reform the country’s education and vocational training systems and curricula to be better aligned with labour market requirements, structured in consultation with the market and private sector, so it continues to be flexible.
What are the next steps we need to take to meet our commitments to society?
I chair the Policy Working Group on Human Rights and Responsible Business Conduct at the IOE (having 159 business organisation members in 150 countries, with over 50 million companies represented). We have found that people do not take human rights issues as seriously as they should when we refer to corporate social responsibility or investment.
Fund managers are financially naïve (and largely Westernised), seeing risk rather than the vast opportunities that exist in developing regions like Africa, Latin America, and parts of Asia. This adversely affects funding. We are also broadly hampered by a lack of infrastructural development and political will.