The role state owned companies play in youth skills development in South Africa

Abstract

While South Africa has made multiple strides since the dawn of democracy in 1994, there are serious economic challenges that remain. The low number of jobs that the economy has created, even in higher growth cycles, suggests that the issue of unemployment is structural in nature. The challenge of unemployment is more acute among young people, who often battle to get absorbed into the formal labour market owing to a variety of factors. One of the factors often cited by employers is the dearth of requisite skills among the young potential job entrants. State owned companies, whose mandate extends beyond mere financial returns, are taking the lead in supporting the broader socio-economic developmental goals of government. There are several skills development initiatives by state owned companies for young people aimed at ensuring their economic participation. An inductive study was conducted to observe existing skills development initiatives targeted at young people by state owned companies with the aim of finding the optimal approaches for reducing the triple challenges of unemployment, poverty and inequality. A mixed research approach was adopted through interviews with individuals who were identified as key stakeholders on youth skills development. A survey of young people who have taken part in the skills development programs of state owned companies was also conducted in order to obtain broader views on this subject. The results found that while current programs are making a small impact on reducing the skills gap, challenges still remain. The results also revealed that various state affiliated entities need to collaborate in order to harmonise their skills development programs to the national imperatives. The research also found huge challenges exist in the TVET college system, which is crucial to reducing the skills gap among the youth. The research also found that, while young people appreciated the training opportunities given, many were discouraged from the programs by various factors. The private business sector was also urged to be more supportive of state efforts to stimulate economic growth and absorb more young people.