Sustainable low-technology businesses: the key to large-scale job creation in SA



Abstract

Toerien, DF (2008), Sustainable low-technology businesses: the key to large-scale job creation in South Africa, in ASSAF (Academy of Science of South Africa), Local Economic Development in Small Towns, Housing Delivery and Impact on the Environment, Pretoria.

 

Introduction

Widespread poverty is one of the most pressing problems of South Africa. The inability
over decades of the South African economy to create sufficient job opportunities has
contributed to a persistently high unemployment rate. Poverty and unemployment are
tightly linked.

Why does unemployment remain persistently high whilst the South African economy has
been growing at a rate exceeding 3% per annum during the last decade? The nature of
South Africa’s minerals-energy based economy (Fine and Rustomjee, 1996) (being mainly
based on commodities) explains at least part of the phenomenon. To remain competitive
the global economic race requires ever-higher productivity from commodity producers.
In this process, machines replace humans and the growth in jobs is lower than economic
growth. In addition, more knowledge workers are needed to man and support the machines.
This phenomenon is illustrated for the South African agricultural sector in Figure
1. In the period 1971 to 1995 the number of largely unskilled black workers has declined
by about 50% whilst the number of largely skilled white workers has increased by about
40%. This was a time when South African agriculture was under enormous price pressures.
A continuous rise in the productivity of the agriculture sector of this period helped agriculture
to survive and is indicative of a trend to greater mechanisation and automation.

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