Identifying employment-creating sectors in South Africa: the role of services industries

Abstract

This paper explores scenarios for employment creation, with an emphasis on services. It considers whether the government's current policies for the formal services sector will achieve its 2014 target of halving unemployment. New employment has mainly been found in the formal and non-formal services, and future employment will probably come from such sectors as business services, trade, finance and tourism. As at 2004, about 480 000 new jobs were needed annually to halve unemployment from 26.2 per cent to 13 per cent by 2014. This would require at least twice the average annual job creation since 1994. Two scenarios are considered: the first under current conditions with similar rates of growth; the second with substantial improvements in policy, especially the promotion of trade in services. The first scenario leaves the economy with the same rate of unemployment in 2014. The second sees a reduction in unemployment of 20 per cent.

¹Executive Director, Employment, Growth & Development Initiative, HSRC (Human Sciences Research Council).

Notes

¹Executive Director, Employment, Growth & Development Initiative, HSRC (Human Sciences Research Council).

²References to planned government expenditure are sourced from the 2004/5 Budget Statement, and expenditure is sourced from the 2004/5 National Medium Term Expenditure Report (Government of South Africa, 2004a, 2004b). These figures, both past and planned, have been checked with the National Treasury, Presidency, Department of Public Works, Department of Education and Department of Social Development (see Altman et al., 2005a).