On October 13, 2010, South Africa's Daily News reported that municipal infrastructure in South Africa’s eThekwini region was under threat of falling into disrepair, even collapsing, if the city did not urgently recruit engineers to replace a fast-diminishing workforce. So dire is the talent shortage that city officials suggested that R3m ($441,625) be injected into the University of KwaZulu-Natal engineering department over a period of three years, the newspaper reported.
South Africa may be rich in natural resources, but it severely lacks human capital, particularly in sciences and engineering. This is despite being home to 49 million people and some impressive companies focused on nuclear and solar energy, mining, space and satellite communications, software encryption, coal-to-oil conversion and even electric cars.
The fact is, while globally engineers are in short supply, South Africa has one of the world’s most acute shortages. A recent National Science Foundation study reports that South Africa produces 0.5 students in engineering and the natural sciences for every 100,000 people. By comparison, Finland produces 13.2, the world’s highest.
Sandra Burmeister, CEO of South African mining, information and communication technology recruitment firm Landelahni, says that between 1998 and 2008, South Africa produced only 53,342 engineering graduates (diplomas and degrees) from an enrollment of 388,606. Of the 135,201 enrolled to become degreed engineers, only 28,019 succeeded.
"There are not enough engineers to meet the demand from business and there is an 11% pass rate among engineering and technology (students)," she says in a company report.
Ian Develing, business development director international at Altech UEC, a developer of digital technology for the international pay-TV industry, reveals that his company looks specifically for electronic engineering and computer science graduates with embedded programming skills, and Java and HTML programming skills.
“We manage to find recent graduates through a rigorous recruitment programme, but find it difficult to find engineers with domain and field experience,” he says.
Making matters worse, more experienced graduates often leave to join other companies to take advantage of higher wages, or even leave the country for opportunities overseas.
To combat the problem, Altech UEC, headquartered in Mount Edgecombe on the outskirts of Durban and a wholly owned subsidiary of Allied Electronics, is hiring engineers in Bangalore, India, where it is establishing a large engineering design centre to complement its operations in Australia. In fact, later this year, the company expects to have about 65 software engineers in Bangalore. Altech UEC has also outsourced hardware design partners in China and Taiwan.
“Through virtual private networks [VPNs], we manage common databases and communicate through Skype as well as telephone conferencing,” says Mr Develing.
The company also uses VPNs to communicate with its engineering offices in Cape Town and Johannesburg.
Similiarly, Natcom Electronics, which develops and integrates communication systems into military and security vehicles and containers, uses Skype to counter skills shortages. The company employs skilled workers in New Zealand who communicate via Skype with its team in South Africa. The scheme is working so well that the company is considering offering outsourced design services to other South African companies that lack skilled resources.
Roger Couzens, Natcom’s general manager in its Durban office, explains that companies such as his find it difficult to recruit because so many internationally recognised academics in South Africa have either retired or relocated to other universities around the world. Compounding this, the University of KwaZulu-Natal in Durban, one of South Africa’s leading research intuitions, has not successfully attracted replacements of better or the same calibre.
“In addition, the implementation of outcomes-based education at primary and secondary schools has led to a serious degradation in the ability of learners/students to be able to study engineering without some considerable intervention by the university in trying to improve levels of mathematical and scientific understanding,” adds Mr Couzens.
The result has been a degradation of standards that has resulted in graduates of the university requiring several months of on-the-job training before they can become useful to their employers.
“Many small companies cannot carry this type of expense and, hence, are unable to use these graduates,” says Mr Couzens. Furthermore, many who possess skills have left South Africa for greener pastures, thereby leaving the country with a severe 'brain drain'.
“The brain drain began in the early 1990s when sanctions against South Africa were lifted and many international companies started to purchase South African companies and restructure them, resulting in many of the really good engineers relocating to other countries with more lucrative employment opportunities,” says Mr Couzens.
In addition, the government has implemented its broad-based black economic empowerment (B-BBEE) policy that is intended to bring the country’s black majority into the economic mainstream. “This is particularly taking its toll on the electronics sector,” Mr Couzens says. “Not many black South Africans [are] pursuing careers in the electronics sector.” Mr Develing agrees that finding black South Africans to fill such roles is difficult as the majority of trained job applicants are white.
Efforts are being made to combat the problem. For one, Natcom and companies in the electronics sector have formed the South African Electronic Industries Federation, which is creating a multimedia presentation for guidance counsellors to use in secondary schools to encourage students who show an aptitude towards mathematics and physical science to consider careers in electronics. The federation also plans to be involved with technical and academic universities to help shape curricula.
Some government-supported organisations are also addressing employment issues by focusing on the B-BBEE policy and encouraging entrepreneurship. The Smart Xchange in Durban, for example, is working with individuals, especially black economic empowerment business concerns, to help them own and manage enterprises. The Xchange was founded by the eThekwini Municipality and the Durban University of Technology.
In Pretoria, the Innovation Hub, supported by the Gauteng provincial government, operates as Africa's first internationally accredited Science Park. It offers space options for hi-tech entrepreneurs, world-class businesses, academics, researchers and venture capitalists to meet, network and prosper. So far, 80% of the companies in its incubator are IT-focused. Cape Town’s Bandwidth Barn, a wholly owned subsidiary of the Cape IT Initiative started in 2000, operates as an information and communication technologies (ICT) business incubator. Any big successes coming out of all of these entities, however, are yet to be announced.
Cape Town's talent draw
Meanwhile, some companies located in Cape Town claim that they are not feeling the pinch quite as badly as those in other regions of the country.
“We have a constant stream of talent approaching us that is currently based in Gauteng, but would like to relocate to the Western Cape,” says David Murray, CEO of Elprom, a leading provider of electronics contract manufacturing services in South Africa. Besides its 20-year history in Cape Town, Elprom has firmly established relationships with the universities and technical colleges in the area.
“We invite students to tour our facility, we host student projects, we employ students for vacation jobs, and more,” says Mr Murray. “All of this helps us to identify potential employees early on and to build a relationship with them. The professors assist us here as well.”
Elprom also works hard at building good relationships with employees. Consequently, its staff turnover is very low. The company also invests in its own staff by identifying individuals with greater potential than the role they are currently fulfilling. “A number of our skilled staff started out as machine operators and are now qualified technicians,” says Mr Murray. Of course, he admits that the company’s geographical location of Cape Town helps.
With its beautiful coastline, temperate climate and cultural venues, the Western Cape has been successful in attracting businesses, especially in ICT. In fact, the city was recently named as the most entrepreneurial city in South Africa, with the percentage of Capetonians pursuing business opportunities almost three times higher than the national average.
Perhaps one solution to solving South Africa’s skills issue comes from industry that is free to cultivate talent and exist in an environment that is both business friendly and provides a good quality of life, though of course the importance of education cannot be underestimated.