Addressing Skills Shortage Tipping Point Must Be Major Focus For 2021 – RMB CEO

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  • On average between 21,000 and 23,000, South Africans leave each year

  • Skills loss evident in medical, construction industries

  • Economic and political stability needed to stem the tide

A skills shortage is one of South Africa’s biggest economic risk factors and could hamper the country’s economic recovery plan and infrastructure ambitions say Rand Merchant Bank CEO, James Formby.

“Skills are often judged by the matric pass rate or the number of university graduates.

RMB Addressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO Brandspurng
Rand Merchant Bank CEO James Formby | www.brandspurng.com

While improving our education system is important, most of our skills are gained through learning on the job and by observing experienced role models.

“People with more than ten years of experience, particularly in a specialist field become very difficult to replace. As experience leaves, there are fewer role models to train those that are keen to learn,” he said.

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Any evidence-based discussion about South African emigration is made difficult by the fact that there is no official bureau that collects emigration data. To ascertain a trend, RMB refers to the UN’s Total International Migrant Stock dataset from 2019 according to which the number of South African-born persons residing outside of South Africa increased from 330,000 in 1990 to 900,000 in 2017 – an average of 21,000 South Africans per year.

This is slightly less that the assumptions made by StatsSA in its 2019 mid-year population estimates, which suggests an annual average outflow of roughly 23,000 people per year between 2016 and 2021.  Anecdotal evidence suggests that a growing number of individuals leaving are professionals but due to a lack of official data, the exact proportion cannot be verified.

Formby noted that other countries are actively attracting South Africans with proven work experience. The UK and Australia are the two preferred destinations for South African emigrants while Canada and New Zealand are proving increasingly popular.

“We have lost many skilled South Africans to emigration in the last few years. While Covid may have slowed this temporarily, it won’t take much for the constant stream to turn into a torrent. The sense we get is that a lot more people will take the leap if there are no signs of turnaround policies.”

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He added that the next couple of years could prove the real tipping point for South Africa where skilled people leaving simply cannot be replaced – even by upping training or making it easier for foreign workers to come to South Africa. Granted, migrants comprised 7.2% of SA’s population in 2019 according to the UN, more than 3.5 times the number recorded in 1990. There is no definitive evidence of relative skills levels, but the sense is that we have attracted those with fewer skills while losing those with more.

Read Also:  As UBA Remains Resilient

While often mooted, the government has still yet to take formal steps to introduce skills visas.

“We must be open to bringing in skills from elsewhere. Those skills create jobs by transferring knowledge and enabling businesses to grow around them. Welcoming talent to a country is simply fundamental to creating prosperity.”

Much has been written about South Africa’s need to attract and retain economic capital – to fund the fiscal deficit and restart growth.

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“But skilled human capital is equally important and are attracted by the very same factors. Just as organisations think carefully about their employee value propositions, it is vital that South Africa considers its skills value proposition in offering greater economic and policy stability.

“Skilled people need to have confidence in the future, they need the freedom to invest their savings both inside and outside South Africa and they are attracted by the opportunity to learn from others,” Formby said.

He added that while the banking industry was not yet severely affected, skills loss was particularly apparent in the medical industry and the construction industries, just as more skills are needed to develop government’s long pipeline of infrastructure projects.

A survey conducted by the South African Medical Association (SAMA) found that 38% of respondents (from public and private healthcare) said they would consider emigrating if the NHI was fully implemented while 6% would emigrate for other reasons.

In 2019, the South African Institution of Civil Engineering (SAICE) reported that in the past three years it had lost 1.73% of its members, aged 30-60, to emigration

“There is enough capital in South Africa for these projects but we are thin on skills. The real trick in pulling off our infrastructure-led growth is accessing and enabling specialist skills. “We may well have to tap those in retirement, the private sector and those who have given up on the construction sector and moved to other industries. Embracing non-conventional skillsets that will enable the fourth industrial revolution is as important,” Formby said.

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Addressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO - Brand SpurAddressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO - Brand Spur

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Addressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO - Brand SpurAddressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO - Brand Spur

Latest News

Hong Kong Productivity Council Theme of the Year 2021: “Make Smart Smarter”

  • Smarter Era of Intelligent Manufacturing Launch Ceremony
  • Witnesses New Milestone for Reindustrialisation in Hong Kong


HONG KONG SAR - Media OutReach - 26 February 2021 - The Hong Kong Productivity Council (HKPC) launches a series of activities in 2021 themed "Make Smart Smarter". The campaign with "Smarter Era of Intelligent Manufacturing Launch Ceremony" was kicked off today, revolving around the theme of "reindustrialisation".


Addressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO - Brand Spur

The "Smarter Era of Intelligent Manufacturing Launch Ceremony" was officiated together by Dr David Chung, Under Secretary for Innovation and Technology, HKSAR Government (fourth from left); Mr Clemente Contestabile, Consul General of Italy in Hong Kong (third from right); Ms Rebecca Pun, Commissioner for Innovation and Technology, HKSAR Government (second from right); Dr Daniel Yip, Chairman of the Federation of Hong Kong Industries (third from left); Mr Roberto Leone, Managing Director of NiRoTech Limited (first from right); Mr Willy Lin, Chairman of HKPC (fourth from right); Mr Mohamed Butt, Executive Director of HKPC (second from left) and Mr Edmond Lai, Chief Digital Officer of HKPC (first from left).


Co-organised by the Federation of the Hong Kong Industries (FHKI), this spotlight event exhibited and introduced an excellent example of reindustrialisation whose research and development were undertaken by HKPC. Gaining support from the Innovation and Technology Bureau and funding support from the R&D Cash Rebate Scheme of the Innovation Technology Commission of the HKSAR Government, production has been successfully commenced in NiRoTech Limited (NiRoTech), a local intelligent security product manufacturer.

Read Also:  As UBA Remains Resilient


This smart production line, named the "OWL" intelligent production line, gives into full play the characteristics of an owl's wisdom, piercing eyes, flexible body, soft neck (360o vision) and agile movement. These perfectly echo the key features of this intelligent production line which has high flexibility, excellent agility to cater for different production needs, stringent and precise production capacity, as well as non-stop operation. Five key "S.M.A.R.T" elements: Speed, Multi-function, Accuracy, Reliability and Traceability, can be seen in this production line offering edges of intelligence and efficiency enhancement.


In order to effectively respond to Hong Kong manufacturers' demands on production space, the "OWL" production line adopts a U-shape compact layout design and incorporates the beauty of the "Industry 4.0" (i4.0) lean manufacturing "vision", significantly reducing the factory area to meet the unique land constraints of Hong Kong. NiRoTech's smart factory only occupies 10,000 square feet, saving 50% of the land. It is also equipped with 12 robots and large amount of customised intelligent automation systems and digital technologies. Compared with traditional manual production, the overall production capacity increases by 1.5 times.


Mr Willy Lin, Chairman of HKPC, and Dr Daniel Yip, Chairman of FHKI, were joined by Mr Clemente Contestabile, Consul General of Italy in Hong Kong; Dr David Chung, Under Secretary for Innovation and Technology, Ms Rebecca Pun, Commissioner for Innovation and Technology; Mr Roberto Leone, Managing Director of NiRoTech; as well as Mr Mohamed Butt, Executive Director of HKPC and Mr Edmond Lai, Chief Digital Officer of HKPC, for the launch of the ceremony.


In his welcoming address, Mr Willy Lin, Chairman of HKPC, said, "HKPC is committed to offering staunch support for Hong Kong SMEs in technology R&D and technical aspects, with the aim of creating value for the industrial development of enterprises with state-of-the-art technologies. The 'OWL' intelligent production line is an excellent example of applying innovative technologies that also fits perfectly with HKPC's theme of this year 'Make Smart Smarter'. As owl represents wisdom, by being smarter and using innovative technologies such as IoT, AI, big data, intelligent robots and smart production processes to unleash production opportunities of i4.0, it will certainly scale up productivity and contribute to successful reindustrialisation in Hong Kong, thus achieving the goal of 'Make Smart Smarter'".


He continued, "It is really encouraging to see this 'reindustrialisation' example witnessing the concerted efforts of the Government, industries, business chambers and HKPC to promote reindustrialisation in Hong Kong! HKPC sincerely urges various sectors to work together to accelerate reindustrialisation for the swift recovery of Hong Kong economy and to ensure the "Made-in-Hong Kong" brand to continue to shine bright in the international arena -- Make Smart Smarter".


Dr David Chung, Under Secretary for Innovation and Technology, said, "the Government has been actively promoting 'reindustrialisation' in recent years by providing support in infrastructure, finance, technology and talents in order to create new area of growth and great job opportunities which would help alleviate Hong Kong's competitiveness. I wish to see more enterprises 'Make Smart Smarter', and make good use of these opportunities provided by I&T, as well as the support from the Government, to work and contribute together in turning Hong Kong into an international I&T hub".


Dr Daniel Yip, Chairman of FHKI said, "This collaboration of HKPC and NiRoTech serves as a valuable reference for industrialists on how to integrate i4.0 into production lines to enhance efficiency, elevating their confidence to set up high value-added manufacturing facilities in Hong Kong. With comprehensive policy support and HKPC's professional consultative service, FHKI believes that more Hong Kong manufacturers will join the force of 'reindustrialisation' by pursuing technological advancement and setting up smart manufacturing plants locally, taking the Hong Kong industries into a new era".


The "OWL" intelligent production line integrates the smart adoption of advanced robots with machine vision, smart electrical and mechanical devices, laser processing and sensor technologies. Also, by incorporating AI, IoT, human machine interface, real-time data collection and data analytic technologies, it ensures the full automation and digitalisation of production, assembly and monitoring to achieve big data analytics. Apart from three technologies whose patents are soon to be applied, the project also assists NiRoTech's business planning in exploring the emerging markets and grasping new opportunities.


Mr Roberto Leone, Managing Director of NiRoTech, said, "Mechatronic Manufacturing in Hong Kong: our strategy was clear from the start when we sought HKPC's assistance for help to realise intelligent production. For some, this goal was still immature and very difficult to achieve, especially with Hong Kong being chosen as our operation hub. Today we can proudly say we have achieved it with the system in Hong Kong operating satisfactorily as schedule. Despite there are challenges as the COVID-19 pandemic was affecting all in 2020, the result is now vividly in front of us, and we can touch it. Yet this is only the first step of a long journey".


For more details about "Make Smart Smarter", please visit the dedicated website: https://smarter.hkpc.org/en/index.html


About Hong Kong Productivity Council

The Hong Kong Productivity Council (HKPC) is a multi-disciplinary organisation established by statute in 1967, to promote productivity excellence through integrated advanced technologies and innovative service offerings to support Hong Kong enterprises. HKPC is the champion and expert in facilitating Hong Kong's reindustrialisation empowered by i4.0 and e4.0 -- focusing on R&D, IoT, big data analytics, AI and Robotic technology development, digital manufacturing, etc., to help enterprises and industries upgrade their business performance, lower operating costs, increase productivity and enhance competitiveness.


The Council is a trusted partner with comprehensive innovative solutions for Hong Kong industries and enterprises, enabling them to achieve resources and productivity utilisation, effectiveness and cost reduction, and enhanced competitiveness in both local and international marketplace. It offers SMEs and startups immediate and timely assistance in coping with the ever-changing business environment, accompanying them on their innovation and transformation journey.


In addition, HKPC partners and collaborates with local industries and enterprises to develop applied technology solutions for value creation. It also benefits a variety of sectors through product innovation and technology transfer, with commercialisation of multiple market-driven patents and technologies, bringing enormous opportunities abound for licensing and technology transfer, both locally and internationally.

For more information, please visit HKPC's website: www.hkpc.org.


Addressing Skills Shortage Tipping Point Must Be Major Focus For 2021 - RMB CEO - Brand Spur
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