The National Skills Development Conference organised by the Department of Labour annually is expected to convene this month. The conference is important because it is likely to discuss a new national skills development agenda for the post-2010 period.
A key theme that should emerge from the conference is a new National Skills Development Strategy (NSDS III) for the country. NSDS III, as it is called, essentially sets out national strategic skills development imperatives over a 5-year time horizon by providing a structured framework for rolling out the most critical skills development actions identified largely, but not exclusively, by organised business and labour.
The single most important challenge facing policy-makers, labour and business is to ensure that the formulation of a new strategy is informed by an empirical analysis of, and grounded in, the structural and conjunctural conditions of our economy and society – dynamism of the labour market and economy, industrial and economic policies, investment climate, industry growth trajectories, social and human development priorities, and so on. This is necessary not merely to plug ever-widening skills shortages prevalent but to support the broader goals of government such as halving unemployment and poverty and reducing inequality by 2014.
As a precursor, the following issues, gleaned from experiences and mistakes of past strategies, should be considered by the conference.
There appears to be a genuine realisation in government circles of the importance of adopting a multi-sectoral perspective to economic and skills development. This should now reflect prominently in a new skills development strategy because the role of government in skills development is essentially shaped by the economic environment.
Viewed from this perspective, there is a vital need for integration between skills planning, economic planning and industrial planning. This means that various government departments and industry partners serving a particular industry should calibrate their efforts towards creating a skilled workforce. The skills development agenda simply cannot be driven solely by the Departments of Labour or Education when industry strategy is residing in other departments such as Trade and Industry, Sports and Recreation, Science and Technology, Health, Agriculture or Environmental Affairs and Tourism. Ideally, skills development should fall within the realm of industry strategy.
History is replete with examples of countries such as Korea, Japan, Malaysia and Singapore who have integrated economic planning with skills planning to achieve high-growth trajectories over a sustained period.
This also means that the new strategy should also take cognisance of the fact that industries are organised differently in terms of economic structure, employment and wages, markets, technology, skills profiles and work organisation. Likewise, the manners in which they respond to external shocks are different, as are, indeed, their linkages with each other.
There is a need for regulated flexibility within an integrated planning framework to drive the skills development agenda. This is the vital missing elements in our efforts. A ‘one size fits all approach’ with a common set of indicators for industries is unlikely to work.
Viewed from this perspective, the role of the custodians of NSDS III shifts from controlling to steering, co-ordinating, signaling and supporting industries to meet their skills needs.
Crafting any national strategy is essentially an analysis-driven exercise, guided by authentic research. Information around the nature of the economy and labour market, factors driving structural change, opportunities and threats to economic growth, competitive positions of different industries, key success factors of economic growth, and the implications of all of these for human resource development, are the starting point of national strategic thinking.
The acceptance of a strategy by stakeholders should be preceded, not succeeded, by empirical research enquiry – the domain of social, economic and labour market researchers. Relevance, thoroughness, accuracy and excellent research are vital in framing an effective national skills development response.
In this respect a more comprehensive diagnostic framework should be developed to improve the quality of labour market information of state institutions and agencies to analyse skills supply and demand. Currently this lack of capacity is resulting in a proliferation of new policies, reforms and institutions creating confusion and chaos in the system.
A major problem in SA in comparison to other countries is that the quality of labour market information covering skills supply and demand is generally poor, and occupational statistics are of even poorer in quality. In many situations, the latter are available only in highly aggregated form such as managers, professionals, labourers, technical workers, etc. which is unhelpful for making sound decisions around national or sectoral human resource development issues.
Additionally, information symmetries have the tendency of sending wrong signals to the labour market and economy. This manifests itself in unemployment, underemployment and skills shortages. As a consequence, any new strategy is exposed to the risk of making over and under investments in training.
The management of the skills levy grant system should be reviewed with a view to make it efficient and effective. The system which requires firms to submit workplace skills plans and training reports annually to Setas is still viewed as excessively time-consuming, costly and burdensome. The system is criticised for fiscal leakage by round-tripping monies in a long-winded manner out of levy-paying firms to the South African Revenue Services, Department of Labour, Setas and then finally back into firms with non-training costs at each point in the activity chain.
Despite attempts to loosen the grant funding regulations, small firms still appear to find the levy grant system a “bridge too far”. They continue to perceive it as just another tax. Efforts to encourage small firms to participate in skills development activities are still an enormous challenge.
If there is a consensus that small business are important drivers of economic growth and job creation, there is thus a compelling case for a user-friendly system.
One of the finest, yet least quoted, discussion papers to emerge from the ruling party in recent years is Development and Underdevelopment: learning from experience to overcome the two-economy divide. Despite the impressive gains made in the ‘first’ economy over the last decade, the benefits have not reached the ‘second economy’. It does not make economic or other sense to relegate significant constituencies in the 2nd economy to the periphery of the development agenda.
Whilst acknowledging that skills development is a necessary, but not a sufficient, condition for growth and development, drafters of the new strategy should give serious consideration to the contents of this discussion paper.
Unless there is a coherent, multi-sectoral response to addressing the development needs of people in the 2nd economy, of which skills development is a key component, the project of national economic transformation will remain a distant target.
The issue of skills shortages is receiving considerable attention for over a decade. This problem has resulted in massive investments by government and the private sector in skills development without visible success. There are daily calls for increased levels of government intervention to alleviate this problem. Despite the discussion and debate, the nature of shortages remains poorly defined and conceptualised with much of the focus on palliatives such as levy rebates, grant funding, stop-gap measures, slick public relations and a barrage of new policies and regulations.
Training is but one set of responses to address shortages. There are other responses such as labour market reform, improved wages, better working conditions, new work arrangements, staff retention, skills substitution, migration programmes and capital investment that also need to be explored.
This conference has a real opportunity to develop a strategy that focuses on an analysis and evaluation of the problem as a first step towards devising meaningful and decisive ways to respond to the human resource development challenges over the next 5 years. In short, we need a strategy that works.
Dr Hoosen Rasool is Managing Director of the Management College of Southern Africa. He writes in his personal capacity.
