To become a modern industrial economy we must become a science, technology, engineering and maths (STEM) nation. To become a STEM nation we must build an entrepreneurial, education-first nation.
We often look at our education data separately from our employment data and our skills data; this distorts our understanding of the problems we face with unemployment and underemployment. We must think systematically when addressing these issues because they are interconnected and our policy interventions must engage the systemic issues rather than take a piecemeal approach.
The unemployment rate for people under 25 is 70% and for those between 25 and 35 it is 50%, on the expanded definitions. More than 30% of our young people are not in education, employment or training (NEET). That is an unhealthy and societally unsustainable rate but it has been consistently above 30% over the past decade.
We have 5-million workers in elementary work classifications (meaning they have an education up to grade 10), and they earn a minimum wage of R3,500 if they are lucky enough to be employed by companies and households that observe the law.
We are stuck in a vicious cycle which keeps our economy spiralling downwards. The bad education system results in more people joining the unemployment lines, which results in a higher welfare burden, which needs to be paid by a shrinking pool of taxpayers. All of this lowers our productive capacity and our growth rate.
The unemployment and underemployment problems flow from our failure to fix the education system and our failure to incubate entrepreneurial talent.
Africa still has many opportunities for the development of the digital economy and participation in the fourth industrial revolution. To tap into those opportunities we must replicate the success factors of Silicon Valley
Our education system is failing to meet our national skills needs and holding us back from capturing a share of the fourth industrial revolution economy. It produces only 30,000 students a year with maths grades good enough to continue with STEM subjects at university, out of a national class of more than 1-million.
We are ranked 101 out of 141 countries in skills and 119 out of 141 in vocational education training. Our artisan training is suffering because of the failures of the public schooling system. Our TVET throughput rate is 9%, nowhere near enough to meet our skills needs.
While we face education and entrepreneurship challenges, a South African, Elon Musk, is the richest man in the world, the owner of two technology companies and the 2021 Time magazine person of the year. Someone who was born and educated here has risen to the top of the economic ladder. His success is a challenge to the nation, a reminder of what's possible.
While his accomplishments were not possible in the South African economy at the time, the question every policymaker and national leader must ask is how we replicate the Elon Musk success story. Going deeper, how do we truly create a South African tech start-up nation?
I have written elsewhere about how we fix education to ensure that we have skilled and driven young people in our workforce.
In this piece I want to touch on how we jump-start our entrepreneurial economy, especially in the tech space, by enabling those who are already in our universities and TVETs to build the next Tesla, the next Apple and the next Google.
We all know that the companies started in the garages of Silicon Valley have disrupted the global economy. Talented and driven people who have become household names were able to start these companies from their parents' garages and today those companies employ more than a million people directly and many more indirectly.
Africa still has many opportunities for the development of the digital economy and participation in the fourth industrial revolution. To tap into those opportunities we must replicate the success factors of Silicon Valley.
In SA many talented young people do not have access to the funding networks that exist in Silicon Valley, and the state must step in to provide that funding.
The state must create a venture capital fund to give talented graduates from TVETs and universities the financial support they need to pursue interesting start-up ideas in the STEM space. This is not something that we can leave in the hands of the private sector in a developmental state like SA. This venture capital fund would provide a fully funded five-year start-up runway for STEM and creative entrepreneurs to build African unicorns.
The state must also fund invention and design masters degrees in engineering and science faculties. Students who take up these programmes must be given full financial support so they are not driven to the job market because they have to support their families. The state must give grants for the creation and support of research & development workshops based in universities which can be used by graduates in STEM fields.
If we take these steps and have visionary leadership to guide the process, we will begin to see South African companies creating the jobs of the future and transforming the townships. We will lead Africa in industry and innovation and become a destination for investment.
• Maimane is leader of Build One South Africa
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