SA's inequality gap is widening, bringing the risk perpetuated by inept and corrupt government spending under increased scrutiny. Our staggering youth unemployment levels and the nightmarishly poor literacy of our Grade 4 learners only heighten local tensions – and risk.
But risks faced by businesses are global and are exacerbated by diverse, disruptive influences. Converging financial markets, climate change, poverty and conflict are all contributors to this phenomenon. Many countries groan under the pressure of insufficient social, ecological and economic resources, as they navigate the effects of global change.
For business, beyond local market know-how the challenges and opportunities lie in finding the balance between agility and resilience and risk mitigation.
The positive global economic outlook for 2018, especially for emerging markets, is encouraging. And locally, Treasury projects growth of 1.5 percent in 2018, rising to 2.1 percent in 2020. These indicate improvements from October 2017 forecasts, but they're still among the weakest of the emerging markets sovereigns and fall far short of the growth required to reduce unemployment. To avoid shedding jobs, we need the economy to grow by 2 percent. To absorb the product of our education system, enabling our young people to participate in our growing economy, we need closer to 3 percent.
Although the ANC has to some extent resolved the leadership issues that were driving political uncertainty, we can still expect heightened political risk and distraction from now until after the 2019 elections.
The most overwhelming risk to our delicate social compact is our youth unemployment crisis, with figures hovering precariously at 52 percent – as confirmed by the Spectator Index's global, 21-country survey.
Youth Unemployment.— The Spectator Index (@spectatorindex) March 6, 2018
S Africa: 52%
S Korea: 8.6%
The crisis is perpetuated by a basic education system that remains desperately wanting.
Apart from job creation, our youth also need the scope to create their own employment. Therefore, quality education that creates job-ready candidates is essential.
And since 2015, the South African economy has not been creating jobs on a net basis – the result of years of slow growth and massive structural unemployment. Consequently, we have a large, young workforce characterised by high levels of unemployment and low levels of skills.
President Ramaphosa's YES initiative serves as a decisive step towards a sustainable and inclusive future for South Africa's legions of unemployed young people.
The initiative unites government, business and civil society to revolutionise SA's employment landscape as we know it: a critical 1-million internships are planned to absorb and upskill our youth by 2021, with a core focus on black youth between the ages of 18-35.
But we all need to play our part in its intended success.
Apart from job creation, our youth also need the scope to create their own employment. Therefore, quality education that creates job-ready candidates is essential. And beyond YES, businesses can offer their insights and skills through internships, experiential learning and partnering with local schools to bridge the gap between school theory and real-world reality.
Global change is as real as the dire need to empower our youth – through quality education, practical skills and meaningful collaborations – to weather the effects of change with agility. And it's here that business has a critical role to play.