There is absolutely no doubt that South Africa is in the midst of a major unemployment crisis. The latest stats show that the official unemployment rate is 34.4%, a record high.
The expanded unemployment figure, which includes discouraged job seekers, sits at an even more alarming 44.4%. Such high levels of unemployment are unsustainable and need to be turned around.
And while initiatives such as the government’s expanded public works programme (EWP) help to a degree, it’s clear that we’re beyond the point where a “business as usual” approach can help address the crisis. What’s required instead is innovative businesses capable of both kickstarting job creation and of helping others to do so.
Fortunately, there are a number of innovative businesses that are not only creating jobs for South Africans but helping others do so too.
The new industry
Vaping and e-cigarettes haven’t been around for very long but this new industry is growing and creating jobs along the way in the manufacture, wholesale and retail of these smoke-free vapour products.
According to CEO of the Vapour Products Association of South Africa, Asanda Gcoyi, the results of a new study commissioned by the association show that in 2019, the industry contributed R2,49 billion in GVA to the economy, paid R710 million in taxes and employed approximately 9 500 people, across direct, indirect and induced channels of impact.
“The most significant contribution the vapour industry can make towards a post-COVID-19 recovery is enabling entrepreneurship and job creation,” says Gcoyi. “This study demonstrates the significant contribution that the industry is already making to that recovery as well as the increasing size of the economic opportunity for South Africa.”
The fast-growing industry
While lockdown set some industries back, it also ignited others. An example of this is e-commerce. In 2018, e-commerce accounted for just 1.4% of all retail in South Africa before doubling in 2020 and growing again in 2021 to 4%.
One company that’s helping fuel this growth is Orderin. Having started out in the food delivery space, it’s pivoted to become a full-service e-commerce enabler, with customers as large as McDonald’s and Pick ‘n Pay.
“Traditional retail has always been a major creator of jobs in South Africa and will likely continue to be for many more years,” says Orderin CEO Thembani Biyam. “The pandemic, however, put e-commerce on a meteoric growth trajectory in South Africa, with the market more than doubling over the past few years. And while we don’t expect growth to continue at this rate, e-commerce and delivery-as-a-service are still relatively young in the South African market with much more potential to still be explored.”
“Online shopping is transferring energy from one form of retail to another – from a pure brick-and-mortar store to a wide ecosystem that combines both offline and online retail, which is creating new job opportunities,” he adds. “For example, our partnership with PnP ASAP (formerly Bottles) requires Orderin’s technology team to grow, and it is also creating new in-store jobs and growing the number of delivery partners in our logistics network to ensure that we continue to deliver groceries in under 60 minutes.”
He points out that the growth of e-commerce has the potential to help SMMEs.
That’s important because small businesses are growth engines for employment. According to McKinsey, between 50 and 60% of South African workers are employed at small businesses. That means that the more small businesses survive and thrive, the more South Africans will stay in sustained employment.
Orderin has also seen an increase in the amount of driver jobs spurred along by e-commerce growth. “Since our pivot as a business began, we have seen a surge in our net active driver network, growing by more than 2.5 times, with our net employment more than doubling”.
The tech industry
Another way for small businesses to grow is to realise that they can hire talent anywhere in the country. One company that’s taken this approach at an international level is Zoho. Adopting an approach called “transnational localism”, it allowed employees to work either remotely or from satellite offices near their rural hometowns. This has had several beneficial effects for both employees and the towns they live in.
“When skilled professionals return to their hometowns, it results in a cross-pollination of ideas,” says Andrew Bourne, Region Manager, Africa, Zoho. “Deep knowledge-sharing networks slowly emerge and skill transfers become easier, leading to continual upskilling of the rural youth. This, coupled with new job opportunities created by rural tech offices, can contribute towards a better future for smaller communities and also promote holistic economic growth.”
While there’s clearly a lot of work to be done when it comes to shifting South Africa’s unemployment figures, there are a number of organisations finding innovative ways to help their industries create jobs. The more they’re encouraged and supported in their efforts to do so, the better it will be for everyone.