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WHY SOUTH AFRICA IS THE RIGHT CHOICE FOR MULTINATIONAL BUSINESS INVESTMENT

Written by: Nora Dawud, CEO and founder at Black Pen Recruitment and Immigration Specialists.

As a country diverse in skills and diligence, there is much potential awaiting international businesses that aim to launch in South Africa, particularly for those operating in the tech space. 

African economies have experienced tremendous growth in the technology sectors powered by the Fourth Industrial Revolution (4IR). And as South Africa boasts one of the continent’s largest and most advanced technological industries, with particular strength in mobile and financial software development, it’s no surprise that it leads the charge. 

As international borders steadily reopen this presents considerable opportunities for international businesses to launch in the South African market and excel at exceptionally high rates, particularly in these sectors. 

Globalisation has advanced thanks 4IR, presenting businesses with the opportunity to expand multinationally. In doing so, businesses are not only able to increase revenue potential and access a new customer base, but boost the economies of its adopted nation and create employment.

Job seekers available for work

South Africa’s unemployment rate has yet again been placed under the microscope of scrutiny. This after Statistics South Africa’s recently announced Quarterly Labour Force Survey for the second quarter of 2020 that indicated a sharp decline in the unemployment rate from 30% to 23%. The controversy arose as a result of the department’s definition of unemployment in relation to its unemployment findings for Quarter 1, largely owing to jobseekers being unable to seek or secure employment as a result of national lockdown protocols. 

However, the results of the unemployment rate according to the expanded definition increased by 2,3 percentage points to 42,0% in Quarter 2 2020 compared to Quarter 1 2020. 

This is evident of how dire the situation truly is, with South Africa ranking as having one of the worst performing unemployment rates of all major economies. Many experts argue that the unemployment rate is largely by virtue of the simple lack of jobs. 

Upskilling for the future

In the years leading up to Covid-19, foreign business interest in South Africa was on the rise, and as lockdown conditions continue easing and the global market returning to some form of normality, this interest will continue. 

South Africans are synonymous for being exceptionally hard working and dedicated, however having the skills to match will ensure continued foreign business investment. As such, it’s important for the youth as the future workforce of the country, as well as the current labour pool, to be cognisant of preparing themselves through upskilling.

With the youth being the most vulnerable in the country’s labour market, with as many as 52.3% being unemployed in Quarter 2 of 2020 according to Statistics South Africa, addressing the skills shortage is important to reduce this number in the future. 

Xpatweb’s 2019/20 Critical Skills Survey reveals that one of the leading reasons for South Africa’s present economic woes is a shortage of technical, managerial and e-commerce skills, with  ICT being the most difficult in attracting.

Globalisation and technological advancements have meant that skills are mobile. When multinational businesses transfer key personnel to South Africa for example, their skills can be transferred amongst participating colleagues, contributing to further economic growth and in turn creating additional opportunities. This also presents opportunities for those from foreign countries with the right skills to look for potential employment in the country, and thereby imparting their skills to locals through entry level positions and apprenticeships.

And while many of the South African youth may not have the skills right now, they must not be deterred by this and instead focus on having the right attitude, a virtuous work ethic and willingness to learn on the job. For many, the exposure to the sought-after skills will undoubtedly follow. This, I believe, is imperative for the future of the South African workforce and economic growth.