Structurally high unemployment, growing income disparity and inequality, as well as inadequate or substandard education and skills development count under the top five risks facing South Africa, according to Christopher Palm, chief risk advisor of the Institute for Risk Management South Africa.
According to the 2019 IRMSA Risk Report, industry sees inadequate and substandard education and skills as the second biggest risk for companies.
The latest statistics on unemployment shows that the biggest burden of unemployment falls on people aged between 15 and 34 years. According to Stats SA, they accounted for 63.4% of the total number of unemployed persons during the first quarter of this year.
The youth aged 15–24 years are the most vulnerable in the South African labour market as the unemployment rate among this age group was 55.2% in the reported period.
Danger of a disillusioned youth
How SA responds to these risks are critical, says Palm. In the IRMSA report the growing disillusionment among the youth of South Africa is highlighted.
The report warns that it could lead to a youth-driven protest movement, on a much larger scale than the student protest movement.
Palm says this is a real consequence if SA does not get unemployment and the education system in order.
Palm also suggests that identifying the most effective risk treatment options require both the public and private sectors as well as career advisors and learning institutions to better understand the future skills requirements. In his view, this is best achieved by engaging the risks and opportunities presented by trends like the Fourth Industrial Revolution.
“The youth must know what the skills of tomorrow are going to be; it is said that the skills that will be needed 10 years from now haven’t even been given names yet.”
“We need to respond and get this right now; if we don’t, the system will not allow us to align quick enough to enable our labour market to produce these skills when it is needed.”
We will end up with skills that are redundant by the time students start their careers and South Africa will not be able to exploit the global opportunities presented by the fourth industrial revolution.”
The IRMSA report reiterates the importance of a “social pact” and the need to align socio-economic programs towards youth investment.