The growth of the digital economy is central to addressing economic and employment challenges in SA

By Mark Tomlinson, Chief Innovation Officer, Hoorah Digital

Let’s be frank – South Africa’s economy is struggling, businesses have had an extremely tough year and youth unemployment is one of the biggest challenges of our time. Our focus must be on urgent solutions and growing the digital economy is key.

Making Digital Transformation Priority 

These challenges are not new – the economy was struggling before Covid-19, which brought many key job creating industries to their knees. Youth unemployment today sits at a staggering 74% for people aged between 15 and 24 years. What is clear is that current measures are not achieving the desired results. Which begs the question: do we need to make digital transformation, across sectors, more of a priority? 

The answer is a resounding yes. Firstly, and most basically, an investment in digital capabilities can save money by helping to make various functions faster, cheaper and, in many instances, better. With government debt growing by the day, a reduction in spending needs to be a top government priority. Digital systems and processes, by their very nature, are geared for efficiency.

Developing A Competitive Digital Economy

Secondly, a strategic approach to digital transformation can help to create jobs. Late last year the Harambee Mapping of Digital and ICT Roles and Demand for South Africa Survey found that digital skills and services could create as many as 66 000 jobs in the local ICT sector, of which the majority could be entry-level positions. President Cyril Ramaphosa himself said recently that the digital economy presents opportunities for creating jobs. This echoes his statement, made in early 2020, that “the most significant contribution we can make to inclusive economic growth is in the development of appropriate skills and capabilities”. It is becoming increasingly clear that those skills and capabilities need to be the kind that support the development of a competitive digital economy.

With industries from retail to entertainment all firmly focused on online, and with a number of international tech giants now investing in South Africa, the need for digital skills has never been greater.

Digital Services Stimulate Growth 

At a time when the South African economy remains under severe pressure, digital services can help to stimulate growth, but the effect will only be seen once we collectively embrace a mindset that values the importance of digital skills in the 21st century. CEO of Digital Council Africa, Juanita Clark, rightly highlighted that “the advent of technological innovation has for many years been the single biggest driver reshaping how we think about work, what constitutes work, and the skills we will need to be productive contributors of work in the future”. 

Equipping the youth employment market with the digital skills of tomorrow is thus key to addressing our economic – and by implication, social – challenges. 

A Robust Digital Economy

A robust digital economy will not only help to address the burden of unemployment among the youth, but it will also make South Africa more competitive on a global scale. Here we can take a cue from the business services sector, where South Africa currently ranks as the top global destination, according to a recent survey.

The fact that the country has a fairly sophisticated digital infrastructure, a young workforce, high levels of proficiency in English and a similar time zone to key markets, makes for an attractive business destination. These are the factors that stand the country in good stead for becoming a foremost incubator for digital skills too.

A robust digital economy is central to economic growth and prosperity in 2021 and beyond. Equipping people with the skills needed to thrive in this environment needs to be a key priority if SA is to have any chance of economic recovery.

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