OPINION PIECE BY DR RAYMOND PATEL – CEO MERSETA AND HRD COUNCIL MEMBER: TIME FOR CONCRETE COOPERATION BETWEEN GOVERNMENT AND BUSINESS IN TACKLING THE SKILLS DEFICIT
The emergence of the previous Chairperson of the Human Resources Development Council as the President of South Africa three months ago signals a new hope that can only bode well for the country. Many take for granted the fact that the challenges facing the country can never be resolved by government alone. The events of last year, which saw an unexpected change of guard at Treasury and the plummeting of the rand, raised eyebrows about the relationship between government and the private sector. Harsh words were exchanged across society and this left a bitter taste in the mouths of many investors. The incident also heightened the risk of a financial downgrade that we don’t need as country. It is in this context that the president Cyril Ramaphosa unveiled a key part of his economic turnaround plan. It targets a massive turnaround in foreign fixed investment which has fallen from R76bn in 2008 to a pitiful R18bn last year.
To spark the fixed investment campaign, the president has conscripted four ambassadors from the business sector into national service. Their directive is to travel the world and encourage foreigners to inject capital into SA, helping the country reach an ambitious five year target of $100bn in fresh fixed investment. This intervention together with the dialogue between business and government is heartening. In a typical South African way, we saw all sides rising to the occasion, facing the world in Davos and then coming back home to continue the collaboration. Investors, while reading all of these as good signs, are now waiting with bated breath to see how the human capital development will respond to this.
It is natural for the relationship between capital and government to be laced with tension but equally, it is clear there is a lot of common ground and goals that should underpin the relationship. The education and training sector is a key area in this regard. This necessitates that the public sector produces the skills the business community requires. On the other side, the private sector has to hire the graduates churned out by relevant institutions. I was not privy to the detailed discussions between the parties but can imagine that education and training must have topped the agenda. This is an obvious area where a future reservoir of skills can be built to shield us from rough times. We have 24 universities, 50 technical and vocational colleges and thousands of listed and unlisted companies with significant turnover. The collaboration between these companies and the relevant SETAs can easily produce a Marshall Plan that can see a financial plan for each of the universities and TVETs. Through creative Public/Private Partnerships surely all students can be funded, even before we resort to blanket free education based on limited state resources? Surely the amount of money that should be spent on skills development and CSI in the private sector can be properly directed to ensure that not only universities but also TVET colleges are sustainably funded? With the amount of money that the private sector has not released for investment there should be no reason why primary schools are not equipped with top-of-the range science laboratory equipment and libraries to ensure our future work force and for that matter assets, our children, are exposed from the outset to the best? A cursory analysis of what business spent on CSI for education reveals a staggering amount that extends to the billions. According to the Kaelo and Trialogue reports on CSI Spending on Education, such spend has multiplied since 1994, underlining the fact that business consciousness for expenditure on education has heightened tremendously. The difficulty is poor coordination and lack of common investment strategies in education between the private sector and public sector — and within the private sector itself. This results in pet projects guided merely by the interests of some CEOs without considering project impact in the long run.
On a few occasions, communities not involved in the setting up of laboratories and libraries end up looting and burning these facilities because of the lack of ownership/consultation. Other undesirable scenarios are a tick-box investment where educational investments are not placed in the right places or not according to community or industry needs. The worst example I have come across is where a government department denies or reduces budgets to schools which have received private sector help, further impoverishing those schools when the private sector funding dries up. This lack of common purpose between business, government and communities is what sits at the heart of the current lack of resources for education and not the absence of resources.
At the merSETA this year alone, we have made millions available for higher education and training initiatives as part of our contribution to education resourcing. We challenge all stakeholders to do something concrete to ensure we don’t leave funding to government alone. We believe a better partnership can be struck between government and the public sector to rescue education. Mentorship and apprenticeship must now be made mandatory for business because despite it being an obvious bridge to deal with the skills deficit, it does not occur naturally for companies to make it an essential part of their DNA.
And so in these meetings, where commitments are made, this solution has to feature very strongly to create an environment in which more and not less young people can be absorbed into the job market to gain experience at all levels.
Until this is declared a crisis, I doubt anything will happen to change the current skills impasse where experience is needed from those who have not had the opportunity to be gainfully employed. During a crisis, such as ours, there may be a temptation to reinvent the wheel, but the solutions for economic development have been with us for a long time. What is lacking is often the political will for business and government to team up rather than see each other on opposite poles of the economy. It is clear, therefore, that we did not need the students’ revolt to come to an agreement that investment and access to higher education will in the long run save the economy.
Government has laid a good basis for collaboration and the rebuilding of trust between government and business. In many ways, it has provided detail on how government intends to create a conducive environment to ensure less wastage and increased opportunities for growth. Business must now play its part in revisiting its attitude towards investment without being forced by legislation.
Opening its doors for young people to learn on the job must be a good start.
Dr. Patel is CEO: MERSETA and Member of HRD Council