The structure of the South African economy does not allow for the creation of large numbers of jobs, nor can it support a large number of new jobs at appropriate skills levels, the ‘State of Manufacturing 2017’ report has shown.
One of the major reasons for the inability to create a large number of jobs or skilled professionals lies in the composition of the domestic economy, which, given development challenges, is not appropriately composed in terms of the primary, secondary and tertiary sectors, says the Department of Trade and Industry (DTI).
The report, which was released by the DTI on Tuesday, also found that labour intensive sectors, in particular, are not growing fast enough to support the creation of a large number of jobs.
The DTI further argues that jobs in the tertiary sector, or services sector, cannot be viewed as substitutes for jobs in productive sectors, given that the jobs in the tertiary sector are highly vulnerable to downturns, have limited career development prospects and do not always include pensions, among other aspects.
A major impediment to creating a large number of jobs in a short time frame was the impact of apartheid-era spatial planning, which the DTI notes is continuing to constrain the domestic economy with detrimental factors including extended travel time and costs, and an inability for companies to run multiple shifts.
Meanwhile, in response to the Manufacturing Circle’s 48-page ‘Map to a Million New Jobs in a Decade’ report, launched last week, Trade and Industry Minister Dr Rob Davies on Tuesday said one-million jobs seemed like “a big ask”.
The Manufacturing Circle document outlines how South Africa could create a million jobs over a ten-year period through pursuing a series of reforms designed to stimulate demand for South African manufactured products and improving the investment climate.
Davies pointed out that there were a “whole range of things [in the Manufacturing Circle’s report] that are not remotely in line with the macro-organisation of the State”.
He added that a number of the projects and measures outlined in the Manufacturing Circle document required further engagement to determine ways in which all interested and affected parties could collaborate and come to a conclusion.
However, some recommendations contained in the document, Davies said, may be more difficult to collaborate on.
Nevertheless, he stressed that localisation should be prioritised in an effort to “make it work better for government”, adding that the private sector played an important role in making sure localisation worked.
“We need to work in our space and improve what we can do in our space, work together and build a strong partnership around manufacturing – that is what we remain committed to doing.”