SECTOR SKILLS PLAN 2011 2016: 2012 update - …

1 1 SECTOR SKILLS plan 2011 2016 : 2012 update 1 ABBREVIATIONS AND ACRONYMS ABET ADULT BASIC education AND TRAINING AET ADULT education AND TRAINING AGRISETA AGRICULTURAL SECTOR education AND TRAINING AUTHORITY ASSA ACTUARIAL SOCIETY OF SOUTH AFRICA ATR ANNUAL TRAINING REPORT B-BBEE BROAD-BASED BLACK ECONOMIC EMPOWERMENT BEE BLACK ECONOMIC EMPOWERMENT CATHSSETA CULTURAL ACTIVITIES, TOURISM, HOSPITALITY AND SPORT SECTOR education AND TRAINING AUTHORITY CEP COMMUNITY OF EXPERT PRACTITIONERS CJI CAREER JUNCTION INDEX COFESA CONFEDERATION OF EMPLOYERS OF SOUTH AFRICA CSIR COUNCIL FOR SCIENTIFIC AND INDUSTRIAL RESEARCH DHET DEPARTMENT OF HIGHER education AND TRAINING EEA EUROPEAN ECONOMIC AREA EPWP EXPANDED PUBLIC WORKS PROGRAMME ESETA ENERGY SECTOR education AND TRAINING AUTHORITY ETDP education , TRAINING AND DEVELOPMENT PRACTICES ETQA education AND TRAINING QUALITY ASSURANCE FAIS (ACT)

2 FINANCIAL ADVISORY AND INTERMEDIARY SERVICES FDI FOREIGN DIRECT INVESTMENT FET FURTHER education AND TRAINING FMCG FAST-MOVING CONSUMER GOODS GAIN GLOBAL AGRICULTURAL INFORMATION NETWORK GCSE GENERAL CERTIFICATE OF SECONDARY education HEI HIGHER education INSTITUTION HRDSA HUMAN RESOURCE DEVELOPMENT STRATEGY FOR SOUTH AFRICA HSRC HUMAN SCIENCES RESEARCH COUNCIL ICTSETA INFORMATION AND COMMUNICATION TECHNOLOGY SECTOR education AND TRAINING AUTHORITY IDC INDUSTRIAL DEVELOPMENT CORPORATION ILDP INTERNATIONAL LEADERSHIP DEVELOPMENT PROGRAMME ILO INTERNATIONAL LABOUR ORGANISATION IPAP INDUSTRIAL POLICY ACTION plan ISDF INDEPENDENT SKILLS DEVELOPMENT FACILITATOR LSM LIVING STANDARDS MEASURE MERSETA MANUFACTURING, ENGINEERING AND RELATED SERVICES SECTOR education AND TRAINING AUTHORITY MOU MEMORANDUM OF UNDERSTANDING MQA MINING QUALIFICATIONS AUTHORITY MPC MONETARY POLICY COMMITTEE MTSF MEDIUM-TERM STRATEGIC FRAMEWORK NCA NATIONAL CREDIT ACT 2 NEDLAC NATIONAL ECONOMIC AND DEVELOPMENT LABOUR COUNCIL NGO NON-GOVERNMENTAL ORGANISATION NGP NEW GROWTH PATH NQF NATIONAL QUALIFICATIONS FRAMEWORK NVC NATIONAL CERTIFICATE VOCATIONAL NSDS NATIONAL SKILLS DEVELOPMENT STRATEGY OECD ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT OFO ORGANISING FRAMEWORK FOR OCCUPATIONS PFMA PUBLIC FINANCE MANAGEMENT ACT PIVOTAL PROFESSIONAL, VOCATIONAL.

3 TECHNICAL AND ACADEMIC LEARNING PWC PRICEWATERHOUSECOOPERS QCTO QUALITY COUNCIL FOR TRADES AND OCCUPATIONS QES QUARTERLY EMPLOYMENT SURVEY QLFS QUARTERLY LABOUR FORCE SURVEY RAF ROAD ACCIDENT FUND RPL RECOGNITION OF PRIOR LEARNING SAQA SOUTH AFRICAN QUALIFICATIONS FRAMEWORK SARS SOUTH AFRICAN REVENUE SERVICE SETA SECTOR education AND TRAINING AUTHORITY SGB STANDARDS GENERATING BODY SMME SMALL, MEDIUM AND MICRO ENTERPRISES SDF SKILLS DEVELOPMENT FACILITATOR SSP SECTOR SKILLS plan USDA UNITED STATES DEPARTMENT OF AGRICULTURE WSP WORKPLACE SKILLS plan 3 EXECUTIVE SUMMARY Wholesale and retail in South Africa is regarded as a growth SECTOR of the economy and a major employer. SKILLS development in the SECTOR is therefore of critical importance.

4 Statistically, it is a SECTOR that is more volatile with respect to cyclical changes and global economic conditions than many other sectors. The SECTOR SKILLS plan (SSP) is presented in five chapters and can be summarised as follows: CHAPTER 1: SECTOR PROFILE Wholesale and retail is the fourth largest contributor to gross domestic product (GDP) with a contribution of around It employs around 19% of the total active workforce of the country. Recent trends indicate that employment in the wholesale and retail SECTOR as a percentage of the total workforce has been decreasing from a high of 27% in 2001 to its current 22% in 2010. The highest densities of enterprises are found in Gauteng, KwaZulu-Natal and the Western Cape.

5 Collectively, these provinces make up more than 70% of the workforce of the SECTOR . About 86% of the SECTOR is made up of small enterprises, medium and large enterprises. South Africa has moved increasingly towards mall-based retailing. The number of retail space in malls has grown faster than the number of retail stores, to a point that malls can no longer guarantee that they will attract major anchor tenants. Unlike the trend in the USA or Europe, online shopping is an ever decreasing component of retailing. Franchising is also a growing industry in South Africa. Most major food retailers boast significant holdings in franchise divisions. In marked contrast to this trend, Woolworths is currently in the process of repurchasing its franchised stores, ostensibly to cut costs and enhance efficiencies.

6 Traditionally, wholesalers in South Africa acted as intermediaries between manufacturers and retailers. Today retailers source goods directly from manufacturers, thus reducing the function of wholesalers in the value chain. Wholesalers are now mainly transacting with small businesses and informal traders, who buy directly from them. CHAPTER 2: DRIVERS OF CHANGE Considerable efforts were made to update the drivers of change in this updated 2011 2016 SSP. Based on extensive desktop research, draft drivers of change were developed, discussed and further refined with stakeholders at focus group sessions in the various provinces. The 2020 landscape was used as point of reference since the 2011 - 2016 SSP should start delivering SKILLS over a longer term.

7 Based on a careful study of various credible sources, it is clear that by 2020 the retail landscape will really be challenging. Key questions that arise and should be addressed from a future planning point of view are the following: 4 What will the wholesale and retail landscape be like in 2020? What challenges will the changes imply? What SKILLS will be required? At the focus group sessions, consultation with stakeholders resulted in the formulation of an additional priority, focusing on the 2020 landscape that will be addressed in Chapter 5. In understanding the challenges of the 2020 landscape, the following contradictions between global forces and the South African policy imperative have been detected.

8 Global forces South African policy imperatives Reduced employment in various industries as a result of technological developments Increased employment levels are required Fewer people required due to technological advances Job creation is required Market forces Historically inequalities need to be addressed Labour market forces dictate Equity needs to be accelerated Political transformation does not always affect the SECTOR Imperative political transformation directly affects the SECTOR Legislation focuses largely on industry regulations Regulation focuses on industry regulation as well as challenging political transformation All policies that have an impact on the SSP, such as the New Growth Path, the SKILLS Accord and the National SKILLS Development Strategy (NSDS), are discussed in detail to further contextualise future challenges and opportunities.

9 Drivers of change that were significantly updated include the following: Industry convergence will have a major impact on technology, especially information technology. The growing middle class, with sufficient income, should be viewed as an opportunity for the wholesale and retail market. An ageing population will also have an impact on the wholesale and retail industry. Social media has never been included in previous SSPs, but ample evidence exists to indicate the growing importance of these media on the wholesale and retail industry. Social networks are a huge source of consumer data that can be used effectively, but these sources have been underutilised so far.

10 The growing importance of the green agenda should be carefully monitored from a wholesale and retail perspective. Greater emphasis will be placed on sustainability and environmental protection. There are numerous other drivers of change in the wholesale and retail SECTOR that impact on SKILLS development. The most significant are the following: Technological Changing technology: Technological changes are introduced primarily to enhance the experience of customers and to increase efficiency. With all retailers striving to increase margins, the introduction of technology often results in more efficient operations with reduced staff. This will require increased training for a workforce that requires a completely different skill set.