An investigation of the impact of inward foreign direct investment on skills development and job creation in South Africa

Abstract

Two of the most serious challenges facing South Africa today are the availability of skills and unemployment. Inward FDI has been promoted by the IMF and the World Bank as a solution for sustained growth in developing countries. This growth impact can be achieved through a combination of FDI benefits which include access to foreign funds, adoption of superior technology, skills transfer and job creation. A number of researchers have investigated the impact of FDI and have come up with different conclusions. The purpose of this study is to investigate the impact of inward FDI on skills development and job creation in South Africa. Telephonic interviews were conducted with 32 multinational companies based mainly in the Gauteng Province during August 2010. A qualitative approach was used in the methodology by comparing the data collected across the companies that participated in the survey. The study concluded that inward FDI has a positive impact on skills development and job creation in South Africa and therefore significantly impacts economic growth.