Closing digital skills deficit opens up digital economy

By Mamongae Mahlare, Takealot Group CEO. The majority of businesses today with a growth agenda have a real digital skills requirement. This reflects a growing dependence on technology to help build businesses of the future. However, in South Africa there’s a challenge: our massive digital skills deficit.

The country simply doesn’t have enough qualified individuals to meet the needs of the digital economy, with approximately 70,000 jobs currently available to those with the skills to fill them. This is an astounding figure when you consider the fact that South Africa’s youth unemployment has reached an all-time high of around 74%. Added to this the fact that an estimated 300,000 jobs have already been outsourced to employees overseas, and you begin to see why it’s so crucial that we address the country’s digital skills deficit.

The Great Equaliser: How the digital economy unlocks opportunity

The retail sector offers a good example of what is possible if we close the digital skills gap. There is a very broad spectrum of roles the digital economy brings to market, from unskilled to highly specialised jobs. Technical roles, in particular, act as catalysts for other non-digital roles. How?

It begins with building an ecommerce platform, which calls for a broad range of capabilities and roles. For starters, there is a need for talented programmers to develop the front-end of a site, which is critical to the success of a business as it essentially serves as the shopfront. The same could be said for the back-end of the platform, which needs to be able to run everything along the supply chain value chain and customer support. Then there is the need for specialists in performance marketing, who help drive traffic to the site.

This is however only half the picture. Once an ecommerce platform is up and running, the business still needs to service customers and interact with the physical world. This is where the many non-digital roles come into the picture — something people often don’t realise when they think about the digital economy. These are people such as your retail buying specialists, planners, order packers, and logistics drivers, who together, make up an estimated eight to 10 roles for every single technical digital role in an ecommerce business.

That’s a multiple of almost 10 non-digital jobs created for every single one fulfilled by someone with digital skills. Once you realise this, it starts to become clear why ecommerce is such a powerful driver for building an inclusive economy that creates opportunities for South Africans of various skills levels reflective of our current reality.

Another critical feature of the digital economy is how ecommerce is not limited by physical location. This means that no matter where a customer is located, they can purchase their goods on the platform at any time of day. And, for businesses, this freedom also widens their customer base, meaning a business based in Johannesburg can service customers in Kuruman, Sekhukhune, Bantry Bay and beyond.

The other benefit of not being limited by a physical store is that the business can offer a far broader range of products, giving incredible choice to customers everywhere. For all these reasons, the digital economy can be seen as the great equaliser for the economy, removing all constraints in terms of age, location or ideas.

Why scaling ecommerce benefits digital and brick-and-mortar alike

In South Africa ecommerce only makes up 4% of retail, while in peer countries it sits at between 12% and 20%. There is subsequently enormous potential to develop this sector, and in the process grow the economy and create jobs, in particular through its enablement of SMEs.

In the past few years, thousands of new entrepreneurs and established businesses have entered the digital market. Encouraged by the success of fellow retailers, these entrants are starting digital channels that are expanding their reach, and in some cases, competing head-to-head with local, as well as global brands. This leads to a need for more employees with digital skills and potential to grow the digital economy further, bringing more employment and business opportunities.

We’ve seen this in our own group, where takealot.com has enabled over 8,000 businesses, with many of these using takealot.com’s Marketplace as the springboard to grow their enterprises, and some have even gone on to set up their own brick-and-mortar shops. In addition, Mr D has more than 10,000 restaurant partners, and Superbalist, over 100 local brands and growing. From an entrepreneurial enablement point of view, clearly ecommerce Is playing an important role.

These figures exemplify the significant opportunity ecommerce presents for South Africa and the collective efforts to address our economic challenges. As more of these local entrepreneurial businesses succeed, the more the digital platforms will grow and create greater opportunities within the broader digital ecosystem. And it’s possible if we’re able to do two key things:

1. Close our digital skills gap. Doing so will grant more South Africans the ability to not only develop their own business ideas with local and international impact; but also help create a broad range of job opportunities that will unlock the growth of the broader economy and create an inclusive economy, given all the non-digital jobs that will be unlocked.
2. Create a regulatory environment that offers fertile ground for entrepreneurs wanting to solve problems, while also promoting the overall growth of our digital economy. Flexibility and dynamism here are essential.

The digital economy is a great equaliser and investing in digital skills development will unleash its power to create jobs, enable small and large businesses, and promote equitable access to quality services for all South Africans across most income levels and geographic locations. It is possible.

Mamongae Mahlare is Takealot Group Group CEO and a regular columnist for Retailing Africa. The Takealot Group is a home-grown South African business, helping to champion the local digital economy and increasing access to quality retail products and services countrywide. It has helped thousands of small businesses and business partners to find an audience and grow in the formal economy.

Receive the Retailing Africa newsletter every week • Subscribe here.