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Higher education can serve the township economy

Higher education  can serve the  township economy

21st October 2016

By: Sydney Majoko


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The funding crisis in higher education presents an opportunity for both government and the private sector to search for unique solutions to the skills problem in our economy. The mantra that ‘Our country doesn’t have an unemployment problem, but a skills shortage” points to the direction in which we should go.

The township economy, despite its spatial limitations, boasts a diverse range of small-scale industries, which, if harnessed by government and institutions of higher learning, can present workable and long- lasting solutions to the higher education funding crisis. The most common form of interaction between institutions of higher learning and industry is almost always at the level of internship. There is no reason why a similar model cannot be followed, whereby unemployed graduates offer their services to township-based businesses in return for the experience they will gain.


The funding crisis is only one side of the coin when it comes to education. The other side has to do with the relevance of the education provided by these institutions. There is no better platform than the largely informal township economy to ascertain the relevance and usefulness of the education provided by higher education institutions.

The drive to register township-based businesses on a central database for purposes of establishing the size of the economy and ensuring compliance would make more sense now when it came to tracking the number of graduates taken into the township economy, tracking their progress and generally keeping score of how this system can be improved and used to ensure that available skills that are lying dormant in the economy are used productively.


Various provinces have what they refer to as an ‘unemployed graduates database’, which is aimed at making it easier for employers to source skills that are needed in their industry. These databases can be consolidated into one database so that it becomes easy for skills concentrated in one province to be moved and directed where they are needed.

Many township business suffer from a ‘syndrome’ of not wanting to spend money on advertising because this is viewed as spending much-needed money on an activity that does not bear fruits immediately.

The townships are teaming with marketing graduates with skills relevant to the information age, in which these businesses are operating. There are businesses in the township economy that can do with skills such as those offered by further education and colleges. Steel suppliers of note have planted themselves firmly in the township economy because the demand for steel is at an all-time high in the townships, where crimes such as break-ins are prevalent. Engineering graduates who are sitting idle in the very same townships can play an invaluable role in helping design basic, low-cost security systems that ensure that businesses are protected. The upside of all this is that the higher education system would produce graduates that are needed by businesses.

The Small Business Development Department (SBDD) should consider partnering with the Department of Trade and Industry and the Department of Higher Education and Training to curb the skills shortage facing South Africa. The obvious first step that the SBDD should take is ensuring that the largely undefined township economy becomes clearly defined. The pockets of excellence that exist alongside hugely undefined subsistence-type businesses need to be clearly captured so that the missing skills are easily identified. The ‘skills shortage’ can only be addressed properly if all the available skills and opportunities have been matched. Right now, the township economy is far from having the right skills set on demand.

The demand for free higher education, although a threat to the already strained fiscus, if viewed alongside the skills shortage, represents more of an opportunity to reduce inequality than another misplaced demand by the youth. We owe it to the township economy to develop a reservoir of competent professionals who will see businesses in the township economy as a stepping stone to the more structured mainstream economy. All that is needed is the political will to turn the current crisis in higher education into a force for good in the township economy.


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