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6 October 2009 The Global Competitiveness Report.
The World Economic Forum’s (WEF) global Competitiveness report one again makes interesting reading particularly in terms of the sectoral value-add as a percentage share of GDP. According to the report services accounts for 66% of the countries GDP. Nonmanufacturing industry and manufacturing industry it is claimed adds 18% and 13% respectively to South Africa’s GDP, while agriculture only accounts for 3%. This once again accentuates the importance attributed to services as a very key sector underpinning the South African economy. If one draws a comparison between South Africa and the top five most competitive countries in the world we find an interesting comparison in that they all have a high services sectoral component (Switzerland 71%, USA 77%, Singapore 69%, Sweden 70 % & Denmark 73%), so it would appear that we are heading in the right direction. Seen in an overall global competitiveness perspective the picture is not quite that favourable, however, as we rank 45th out of 133 countries of the world. This then begs the question what is the problem? The most problematic factors according to the report in the first instance are the high prevalence of crime and theft followed by an inadequately educated work force. The first mentioned certainly does not contribute to an environment that fosters competitiveness, but then neither does the second, namely a workforce that does not appear to have an appropriate skills and knowledge base to gain a competitive advantage in a highly competitive global services economy. The PICMET conference this year has adopted “Technology Management for Global Economic Growth” as the theme for its 2010 conference. The underpinning contention being that technology holds the key to economic recovery and growth. This would seem to imply that within a global economy where services forms the fastest growing sector of the global economy, services and technology related skills would be inextricably interwoven in the competitive fabric of any nation. Within an engineering context this would certainly seem to suggest that services related skills will in the future become an important imperative for economic growth. The GSTM’s ESM domain to be implemented in 2010 needs to be seen in this context, namely providing engineers and technologists with the services skills

required to effectively compete in a changing predominantly services driven global economy. It is suggested in the 2008-2009 Annual Report of the WEF that new opportunities have been created by the prevailing global economic crisis, which apparently according to its Executive Chairman, Prof Klause Schwab, includes the expansion of the so-called “green economy”. Shaping the global agenda in this regard is the roll played by renewal energy in building an international low-carbon economy. The Department of Minerals and Energy’s white paper on renewal energy sets a target of 10 000GWh of energy to be produced from renewable energy sources (mainly from biomass, wind, solar and small-scale hydro) by 2013. This will be apparently made economically viable with subsidies and carbon financing. The future technology skills profile required will therefore definitely appear to be shaped by emerging innovative trends in dealing with some of the world’s intractable and complex problems, such as global warming. Another services related sphere where innovative technology will play a very fundamental role in providing innovative solutions is that of the Global Health Initiative. Notably, the health industry is a services dominant environment and it can be expected that services and medical technology related skills will capture centre stage in finding solutions for the intractable problems involved. A case in point is that technology enabled medical services can for instance be brought to remote locations by means of the innovative use of telemedicine systems. A key determinant would, however be the availability of the skills required to turn this solution into a reality. This brings us back to the introductory discussion, namely that an inadequately educated work force apparently is acting as a constraint in moving South Africa up the scale of the global competitive index rankings. It also highlights the country’s skill paradox in that while technology and services related skills are urgently required by business industry the country simultaneously has a very significant unemployment problem. A higher education and training pillar ranking of 65 out of the world’s 133 nations will hardly be conducive to resolving this paradox. A more detailed analysis of the 5th higher education pillar reveals that South Africa feature’s at the very last 133rd position when it comes to the quality of mathematics and science education (WEF, GCI: 2009-2010, page 283). This would appear to be a very serious situation that requires urgent attention. This seeming lack of a sound education foundation of maths and science, on which to build the technological skills base, would ostensibly complicate the situation quite significantly. Compiled by Dr Richard Weeks

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