Free download from www.hsrcpress.ac.za Free download from www.hsrcpress.ac.za Free download from www.hsrcpress.ac.za Published by HSRC Press Private Bag X9182, Cape Town, 8000, South Africa www.hsrcpress.ac.za First published 2009 ISBN (soft cover) 978-0-7969-2265-6 ISBN (pdf) 978-0-7969-2282-3 © 2009 Human Sciences Research Council The views expressed in this publication are those of the authors. They do not necessarily reflect the views or policies of the Human Sciences Research Council (‘the Council’) or of the South African Department of Labour (‘the DoL’), or indicate that the Council or the DoL endorses the views of the authors. In quoting from this publication, readers are advised to attribute the source of the informa- tion to the authors concerned and not to the Council or the DoL. Copyedited by Karen Press Typeset by Simon van Gend Cover by FUEL Design Printed by Logo Print, Cape Town, South Africa Distributed in Africa by Blue Weaver Tel: +27 (0) 21 701 4477; Fax: +27 (0) 21 701 7302 www.oneworldbooks.com Distributed in Europe and the United Kingdom by Eurospan Distribution Services (EDS) Tel: +44 (0) 20 7240 0856; Fax: +44 (0) 20 7379 0609 www.eurospanbookstore.com Distributed in North America by Independent Publishers Group (IPG) Call toll-free: (800) 888 4741; Fax: +1 (312) 337 5985 www.ipgbook.com Free download from www.hsrcpress.ac.za Contents List of tables and figures vii Acronyms and abbreviations xi IntroductIon 1฀ The need for alignment between industrial and skills development policies 2 Andre Kraak HIgH-tecH sectors 2฀฀On the brink? Skills demand and supply issues in the South African automotive components industry 24 Justin Barnes 3 ฀ Aerospace 45 ฀ Erika Kraemer-Mbula 4 ฀ Three new technology platforms 64 Jo Lorentzen and Il-haam Petersen resource-based sectors 5 Metals beneficiation 86 Johann Maree, Paul Lundall and Shane Godfrey 6 Chemicals 110 Rhoanda van Zyl 7 Wood, paper and pulp 132 Thomas E Pogue PublIc Infrastructure sectors 8 Energy 152 Jeff Lomey and Kent McNamara 9 Transport 174 Jan Havenga labour-IntensIve sectors 10 Clothing and textiles 200 Mike Morris and Lyn Reed 11 Agro-processing 219 Duncan Pieterse 12 Creative industries 235 Avril Joffe and Monica Newton Free download from www.hsrcpress.ac.za servIces 13 Growth and skills in the financial services sector of the South African economy 256 Sean Archer 14 Information and communication technologies 274 Andrew Paterson and Joan Roodt 15 Tourism 300 Nicci Earle-Malleson conclusIon 16 Overcoming ‘one-size-fits-all’ policy-making: The need for differentiated skills development policies in a highly uneven economic and labour market landscape 320 Andre Kraak List of contributors 353 Free download from www.hsrcpress.ac.za | vii Tables and figures Tables Table 1.1: Five organisational trends in the evolution of network relations between firms 8 Table 2.1: Summary of investment indicators amongst South African automotive component manufacturers versus international firms in the SAABC database, 2003–2006 27 Table 2.2: Industry employment levels (average monthly figures), 2001–2005 28 Table 2.3: Employment demand for the period 2006–2010 33 Table 2.4: Employment demand for the period 2006–2015 33 Table 2.5: Management and professional skills profiles for 2006, 2010 and 2015; total demand calculations for 2006–2010 and 2006–2015 34 Table 2.6: Artisan skills profile for 2006, 2010 and 2015; total demand calculations for 2006–2010 and 2006–2015 35 Table 2.7: Current skills gaps as identified during firm-level interviews 37 Table 2.8: Comparative identification of scarce skills 41 Table 3.1: Aerospace manufactures, associated value added and level of skills 46 Table 3.2: Trade in aircraft, spacecraft and parts (R millions), 2003–2006 48 Table 3.3: Changes in composition of aerospace employment in key occupations, 1996–2005 54 Table 3.4: Percentage change in skills demand in the aerospace sector and the total manufacturing sector, 1996–2005 55 Table 3.5: Supply of engineers in HET: percentage of black and female graduates, 1996–2005 56 Table 3.6: Identified key areas for training 58 Table 3.7: Identified scarce skills in South African aerospace manufacturing 60 Table 4.1: Scarce and critical skills in the engineering and technical professions, 2006 66 Table 5.1: Benefits of beneficiation: selling price, employment and investment in different stages of carbon steel 90 Table 5.2: Stages of beneficiation and levels achieved 91 Table 5.3: Mark-ups of basic metals prices, 2003/04 92 Table 5.4: Employment levels in the metal and engineering industry, 1996–2005 93 Table 5.5: Employment changes, 1996–2001 and 2001–2005 94 Table 5.6: Employment by occupation in the metal and engineering sector, 1999 & 2005 95 Table 5.7: Performance transmission across FET N-Level theoretical engineering courses, 1996–2005 100 Table 5.8: Higher education enrolment, output and qualification ratio, 1996–2005 103 Table 6.1: Average skills distribution in the different sub-sectors (%), 1996–2005 120 Table 8.1: Occupational ratios, by NQF level, and projected skills demand for the electrical energy sector to 2012 161 Table 8.2: Comparison and assessment of skills demand and supply in the electrical energy sector to 2012 168 Table 13.1: Structure of output and change in sectoral contribution to GDP growth, 1960 and 2006 257 Table 13.2: Skills breakdown of employment by sector, 1995, 2004 and 2006 263 Table 14.1: Number of enterprises, by sub-sector of the ICT sector, 2002 277 Table 14.2: GDP and employment in ICT sub-sectors, 1996–2005 279 Free download from www.hsrcpress.ac.za viii | Table 14.3: Summary of ICT sub-sector growth and employment trajectories, 1996–2005 279 Table 14.4: Level of skill by sub-sector (percentage), 1996–1999 and 2000–2005 281 Table 14.5: Employment, by main occupation in the ICT sub-sectors, 1996–1999 compared with 2000–2005 284 Table 14.6: Employment of ICT-related professionals and associate professionals, 1996–2005 285 Table 14.7: Distribution of computer professionals and associate professionals, by economic sector, 2003–2004 286 Table 14.8: Graduate trends in ICT-related fields of study in higher education, 1996–2005 289 Table 14.9: Graduates in ICT-cognate fields of study, by qualification level (%), 2005 290 Table 14.10: Share of graduate numbers in Computer Science and Data Processing, by qualification level, 1996 and 2005 291 Table 14.11: Share of graduate numbers in Computer Science and Data Processing, by race, 1996 and 2005 291 Table 14.12: Share of graduate production among fields of specialisation within the Computer Science and Data Processing field of study, 1999 and 2005 292 Table 14.13: Output of new graduates needed to address demand for CPAPs, 2005–2015 295 Table 15.1: Domestic and foreign tourism, compound annual growth rate, by percentage, 2005–2006 303 Table 15.2: Comparisons of estimates of total enterprises, by tourism sub-sector, 2000–2007 305 Table 16.1: Criteria used in the allocation of sectors to specific labour market segments 327 Figures Figure 2.1: South African automotive components industry’s employment composition, 2006, and projected levels, 2010 and 2015 30 Figure 2.2: Projected employment composition of the South African automotive components industry, 2006 versus 2010 and 2015 31 Figure 2.3: Employment demand based on employee turnover, 2006 to 2010 and 2015 32 Figure 2.4: Average industry recruitment lead times 37 Figure 2.5: Training expenditure as a percentage of remuneration: South African average (2001– 2006) versus international average (2006 only) 38 Figure 3.1: Aerospace industry’s domestic linkages to other economic sectors in South Africa 49 Figure 3.2: Occupational profile of the aerospace industry relative to the total manufacturing sector, average 2001–2005 54 Figure 3.3: Intake of apprentices to the DCLD, 1990–2007 57 Figure 3.4: Immigration and emigration of engineers and related technologists, 1998–2003 59 Figure 4.1: Skills supply and demand in engineering and engineering technology, 2000–2006 68 Figure 4.2: Skills supply and demand in chemistry, 2000–2006 69 Figure 4.3: Skills supply and demand in physics, 2000–2006 69 Figure 4.4: Skills supply and demand in mathematical sciences, 2000–2006 70 Figure 4.5: PhD graduate output in the life sciences, 1996–2005 72 Figure 4.6: PhD enrolments in the life sciences, 2000–2005 73 Figure 4.7: PhD graduate output in agricultural and renewable resources, 1996–2005 76 Figure 4.8: PhD graduate output in engineering and engineering technology, 1996–2005 77 Figure 4.9: PhD graduate output in the pharmaceutical and mathematical sciences, 1996–2005 77 Figure 4.10: Skills supply and demand in agriculture and life sciences, 2000–2006 78 Free download from www.hsrcpress.ac.za Chapter Title | ix | ix Figure 4.11: Skills supply and demand in chemical engineering and engineering technology, 2000–2006 78 Figure 4.12: Skills supply and demand in pharmaceutical sciences, 2000–2006 79 Figure 5.1: Trends in employment in the metal industries, 1996–2005 93 Figure 5.2: Employment by occupation in metal & engineering, 1999 and 2005 95 Figure 5.3: Higher education enrolment and output, 1996–2005 102 Figure 6.1: Strategic sub-sector and standard industrial classifications of the chemical sector 112 Figure 6.2: Chemical sector value chain 113 Figure 7.1: Management objectives for plantation forests, by area, 1994–2004 134 Figure 7.2: Sales of forest timber (real 2000 rand values), 1994–2004 135 Figure 7.3: Primary processing exports (real 2000 values), 1994–2005 136 Figure 7.4: Primary processing imports (real 2000 values), 1994–2005 137 Figure 7.5: South African paper milling capacity, by company, 2005 138 Figure 7.6: Domestic paper sales (real 2001 rand values), 2001–2006 139 Figure 7.7: Paper exports (real 2000 values), 1994–2006 139 Figure 7.8: Paper imports (real 2000 values), 1994–2006 140 Figure 7.9: Wood furniture exports (real 2000 values), 1994–2005 140 Figure 7.10: Wood furniture imports (real 2000 values), 1994–2005 141 Figure 8.1: Formal employment levels in electricity-related sub-sectors, 1996–2005 157 Figure 8.2: Energy sources for electricity generation in South Africa, 2001 158 Figure 8.3: Eskom capacity status and maximum demand forecast, 1996–2008 159 Figure 8.4: Projected maximum energy demand, 1951–2031 160 Figure 8.5: Least-cost combination of the 10 000 GWh renewable energy target 162 Figure 8.6: Changing NQF levels of Electrical Trades Theory output from FET colleges, 1996–2005 165 Figure 8.7: N6 output in engineering studies from FET colleges, 1996–2005 166 Figure 9.1: Transport, storage and communication industry demarcation system 175 Figure 9.2: Relationship between employment demand, employment supply, skills and labour productivity 176 Figure 9.3: Formal employment growth of the TSC industry, 1996–2005 177 Figure 9.4: Comparison of formal employment in the transport, postal and telecommunications sub-sectors, 1996–2005 177 Figure 9.5: Estimated formal employment split between passenger and freight transport, 1995–2005 178 Figure 9.6: Fields of study in engineering and transportation, 1996–2005 180 Figure 9.7: Distribution of skills bands for the TSC industry (formal employment), 1996–2005 181 Figure 9.8: Low skills distribution of occupational category for the industry (formal employment), 2000–2005 182 Figure 9.9: Growth in tonkilometres per worker compared to growth in real GDP, 1995–2005 183 Figure 9.10: Tonkilometres per employee (two components of SA Rail compared to global railways) 184 Figure 9.11: Growth in tonkilometres per worker compared to growth in real GDP per worker, 1995–2005 185 Figure 9.12: Growth in passenger journeys per worker compared to growth in real GDP, 1995–2005 185 Figure 9.13: Growth in passenger journeys per worker compared to growth in real GDP per worker, 1995–2005 186 Figure 9.14: Mode comparison, passenger journeys per worker for short-distance transport, 1995–2005 187 Free download from www.hsrcpress.ac.za x | Figure 9.15: Growth in long-distance passenger journeys per worker, 1995–2005 187 Figure 9.16: South African freight transport as a percentage of world figures, 2004 189 Figure 9.17: South African freight transport network segments (with mode differentiation) 189 Figure 9.18: Long-haul surface journeys as a percentage of world figures and expected shift in long-haul journeys if economy matures 193 Figure 9.19: Degree of skills shift required to enable step change from long-haul road to long-haul rail freight transport 196 Figure 11.1: Agro-processing output (constant 2000 rands), 1995–2006 220 Figure 11.2: Agro-processing employment, 1995–2006 220 Figure 11.3: Agro-processing exports (constant 2000 rands), 1995–2006 221 Figure 12.1: Composition of the creative economy 236 Figure 12.2: The film and television value chain 239 Figure 12.3: The craft value chain 243 Figure 14.1: Relationship between the ICT producer sector and ICT ‘user’ sectors 276 Figure 14.2: Employment trends in the major subdivisions of the ICT sector, 1996–2005 280 Figure 14.3: Employment in the ICT sector, by sub-sector and main occupation, 1996–2005 283 Figure 14.4: Average provincial distribution of computer professionals and associate professionals and GDP, 2000–2005 287 Figure 14.5: Graduates in ICT-cognate fields of study, 1996–2005 288 Figure 14.6: Graduation trends in Computer Science and Data Processing, by qualification level and race, 1996–2005 290 Figure 14.7: Comparison of changes in remuneration between all professionals and associate professionals and CPAPs, 2000–2005 296 Figure 15.1: Foreign tourist arrivals to South Africa, 1966–2006 301 Figure 15.2: Domestic versus foreign tourism value contribution, 2005–2006 302 Figure 15.3: Contribution to national GDP and employment per tourist category, 1994, 2000 and 2005 302 Figure 16.1: A six-part segmentation of the South African labour market 326 Free download from www.hsrcpress.ac.za [...]... between these two policy domains is now a crucial policy objective for all governments across the globe Thirdly, the chapter foregrounds the need to take cognisance of sectoral differentiation, and the need for skills and industrial policies to be appropriately customised and attuned to the wide array of subsectoral needs And lastly, the analysis highlights the important role of government in promoting the. .. period, they may also 8 | Sectors and skills: The need for policy alignment arise from purposeful activities taking place between groups of firms – these are referred to as ‘relational rents’ (Kaplinsky & Morris 2001: 26) These rents are increasingly dynamic, in that they are quickly eroded by the forces of competition, after which these producer rents are then transferred into consumer surpluses in the form... by the cluster proposals of the NIPF 12 | Sectors and skills: The need for policy alignment The role of government It is now necessary to discuss the governance and regulation of policy domains that, in the new global economic environment, need to be more effectively integrated There are two primary mechanisms which enable governments to achieve greater cross-departmental integration These are: the. .. as the Asgisa strategy, proposals for a mega-co-ordinating council have continued to be made in recent policy texts The NIPF hints at the idea of such a super-ministry (DTI 2007: 28), although ultimately it does not propose changes to the status quo Similarly, the DST is in the process of launching 14 | Sectors and skills: The need for policy alignment a new super-co-ordinating body, the Foundation for. .. ‘free-ride’ The possibility of poaching limits the willingness of the company to train unless it knows that many other companies would make the same training investment to the benefit of all (Culpepper 2003: 5) The need for alignment between industrial and skills development policies | 17 The uncertainty relating to the benefits of a reform – even when that reform will clearly improve the future income... R&D emerges’ (OECD 2007: 12) 10 | Sectors and skills: The need for policy alignment In short, what the OECD is saying is that the education system is not the only producer of human capability and valuable knowledge Firms achieve these outcomes as well Indeed, the report goes as far as saying that the success of the entire innovation strategy will depend largely on the ‘depth and diversity of innovation... in the industrial policy environment, a second set of intermediary vehicles has been launched since the mid-1990s, these being the plethora of small-business development agencies The key policy question therefore, in both instances, is whether the state, operating through these two types of intermediary agencies, has succeeded in the implementation of its crucial skills and industrial development policy. .. South African policy South African policy texts post-1994 are replete with references to the need for horizontal co-ordination For example, the NIPF of the Department of Trade and Industry (DTI) (DTI 2007) makes strong reference to the interdependencies between its industrial policy objectives and the impact of policies operating under the control of other departments With regard to skills and science... such an alignment between training policy and firm needs was not feasible in the 1997–2005 period, given the absence of an industrial policy which could more clearly articulate the demand-side requirements of priority sectors of the economy More problematically, this policy gap meant that the establishment of the 25 SETAs in March 2000 occurred without these intermediary bodies becoming informed regarding... analysis based on the evidence derived from the sectoral case studies, which will address the key issues raised by these questions The need for alignment between industrial and skills development policies | 19 References Ashton D & Sung J (2006) How competitive strategy matters? Understanding the drivers of training, learning and performance at the firm level Research Paper 66, Centre for Labour Market . usefulness Free download from www.hsrcpress.ac.za 6 | Sectors and skills: The need for policy alignment of these policy objectives through drawing up detailed. of skills bands for the TSC industry (formal employment), 1996–2005 181 Figure 9.8: Low skills distribution of occupational category for the industry (formal