National  Priorities and Industry Needs – Employers’ Perspective on the Post-School Education and Training System 23 MARCH 2017

Business Unity South Africa We appreciate the opportunity to present at this important event and welcome the focus on integration and differentiation, reflecting on the past, present, and most importantly the future. BUSA is the apex body representing business. It is a confederation of business organizations including chambers of commerce and industry, professional associations, corporate associations and unisectoral organizations. It represents South African business on macro-economic and high- level issues that affect it at the national and international levels. BUSA’s function is to ensure that business plays a constructive role in the country’s economic growth, development and transformation and to create an environment in which businesses of all sizes and in all sectors can thrive, expand and be competitive. As the principal representative of business in South Africa, BUSA represents the views of its members in a number of national structures and bodies, both statutory and non-statutory. BUSA also represents businesses' interests in the National Economic Development and Labour Council (NEDLAC).

BUSA Strategic Priority Areas Enabling Environment for Inclusive Growth and Employment in South Africa 1 Transformed, Inclusive Economy that Creates Sustainable Employment 2 Small & Medium Enterprises Thrive 3 Predictable, Certain and Enabling Regulatory Environment 4 Affordable, Reliable and Sustainable Energy to Meet Current and Future Needs 5 Productive and Stable Labour Market 6 A Progressive Tax System that Supports Inclusive Growth Objectives 7 Trade Regime & International Co-operation that enables South African Business 8 Education and Skills Development for Current and Future Work 9 Affordable Comprehensive Social Security Framework for Future Generations 10 Co-operation and Influence in SADC, Africa and Globally

BUSA Strategic Priority BUSA aims to be a strategic partner in designing, developing and promoting on behalf of business an enabling environment where 6.9 million work opportunities can be created for predominantly black people, women, youth, people with disabilities and people that come from poorer backgrounds in order that they can participate in private sector businesses of all sizes and formats across many different sectors of the economy. This can only be achieved through fundamental sustainable economic transformation of the South African economy - a key enabler is the development of quality education and relevant, on – demand skills that will contribute to business needs, and the country now and in the future.

The Skills Objective for Business To ensure that the post-school education landscape and policy environment meets the skills needs of the labour market, now and in the future for inclusive economic growth and employment creation. Recognising: that quality education and skills development that provides one with the tools to access work plays a vital role in relation to a person’s dignity, sense of self and quality of life The world of work is changing with global mobility and trade, technology, demographic change and transitions in and out of employment, this calls for fresh thinking on the role of education and skills. The structural, institutional, access challenges facing post-school education, together with adjusting to the changing nature of work and production requires high levels of social partner co-operation and trust to meet the country’s economic and developmental aspirations. This underlines the need for a strong public and private PSET sector A coordinated and effective post-school education and training system that produces work ready skills is the single most important enabler to addressing challenges of unemployment, inequality and poverty.

The Past Recognise the immense progress that has been made in PSET, but we need to do much more to increase the throughput rate so as optimise the ROI so as to fuel the economy and society. Development of the SETA system has created a platform for sector skills focus. The emergence of public and private PSET institutions that recognises the role that PSET can play in transforming the labour market and economy. There have been frequent changes to the institutional structures, policy framework and governance structures. The necessity of formal and informal workplace skills training has been incentivised through the BBBEE codes, which could be enhanced for further opportunities. Insufficient work integrated learning solutions by all social partners in order to maximise work relevant learning opportunities. Lack of holistic view of business’ role within a fragmented PSET system.

PSET in the Current SA Massive investment by the State and Business into skills development R17 bn by Business to the SDL R2-3bn on SED, R5bn in relation to BBBEE sector codes and charters Extensive institutional structure, that can be streamlined, aligned, made more efficient and more focused: 25 higher education institutions, 50 TVET colleges, 52 Community Education and Training Colleges, 21 SETAS, the QTCO, 2 quality assurance bodies, artisan supporting bodies and a fledgling National Institution for Vocational and Continuing Education and Training, as well as a Councils, fora and the NSA focusing

Current Hard Questions Contested territory as to the purpose, beneficiaries and optimisation of the investment: Push or pull approach Is it to supply skills to people v build work ready skills Supplying volume v relevant skills Sound labour market intelligence system meeting business needs v lack of knowledge and information Is it to run discretionary / pivotal projects v incentives mandatory training by employers. Is it to provide funding for PSET in general v workplace skills Long term qualifications v on-demand skills (role of mentorship) Centralised TVET approach v Market orientated, dynamic approach that adapts to sector specific needs.

Current Hard Questions cont… Performance based institutional governance in a competitive skills market v non measured funding Business as the training ground for vocational skills v Business focused narrowly on competitiveness and growth Big business to leverage mass skills for themselves and the sector v SME need for skills Funding of skills development v other developmental priorities Short term skills demand v long term sustainable skills development Skills as part of a stagnant economy v skills actively contributing to economic growth Can sound policy be drafted in the absence of a sound social partnerships? Policy drafted with Business, not for Business?

Futures scenarios

Crisis or Future Opportunity? Minister has tabled the National Skills Development Plan at Nedlac Opportunity for social partners to meaningfully engage and find solutions in the national interest that will provide SA with a: Way in which to progressively address past and persisting inequality in access to PSET Make a step change in relation to transforming the structure of workforce, with many more black people, particularly youth, women and people from poor households participating in work Creating accessibility to PSET, not only for employees, also for Business Competitive advantage to grow our economy, bring more people into the labour market and become active participants in the economy Differentiator to develop foreign talent in scarce and critical skills, including soft skills, to address national and Continental interests

This will require: Recognition of our common interests and acknowledging divergent constituency interests and ability Placing national priorities ahead of other interests Willingness to rethink the institutional structures, get the basics right, simply and strengthen structures and processes for maximum impact Bring the whole of government, the whole of society, labour and business into the solution seeking process Focus on entrepreneurship, technology and SMEs Smart tape, less red tape, and regulatory certainty Dynamic and adaptable solutions Commitment by all social partners to engage in a trusted partnership

Closure Higher education and training is a key enabler of grow and transform the economy so that it is inclusive and capable of employing the 6.9 million people that are currently unemployed. We need a broad social consensus that addresses the challenges PSET systemically, supports institutional structures and makes the space for the private sector to draw the skills that are needed to power the economy, and thereby contribute to social development. BUSA is willing and committed to being a meaningful partner together with Government, Labour and Community to achieve a PSET system that meets the changing skills needs of the labour market, now and in the future for inclusive economic growth and employment creation.