SA suffers from brain drain, low productivity

South Africa has the world's highest brain drain and worst skills shortages of 55 countries

April 14, 2008, 10:15
South Africa has the world's highest brain drain and worst skills shortages of 55 countries studied and its productivity is plummeting. This is according to Productivity SA and the 2007 World Competitiveness Yearbook.

South Africa also ranked last on infrastructure, internet costs, health problems, availability of qualified engineers and life expectancy. Surprisingly enough, its top rating of number one last year for electricity supply, is likely to plummet this year.

Liza van Wyk, the CEO of major skills training organisation BizTech warns that the situation is worsening and load shedding is exacerbating it. She says managers have failed to find productive work for staff when lights are off. According to Van Wyk, this will cut into profits, see job losses, add to inflationary pressures and see South Africa's economic ratings fall further.

Overstretched staff, a lack of training and poor management saw productivity ratings plunge after a decade of sustained growth - last year SA fell from 38th to 50th out of 55 countries. South Africa also has among the world's most severe shortages of those with finance skills and senior management competence ranking 52nd and 51st respectively.

Productivity SA research showed that South Africa had a 3,2% per annum increase in private sector productivity since 1996 which fuelled international competitiveness. Van Wyk says: "The more productive a national economy is, the higher the personal income of workers and the lower inflation. Sending administrative staff on a two day course like Ultimate Organisational Skills is a simple and cost-effective way to rapidly address challenges."

The 2007 IMD World Competitiveness Yearbook of which Productivity SA is a partner institute showed a drop in South Africa's rankings from 38th position to 50th position out of 55 countries. Factors contributing include South Africa's economic performance competitiveness dropping from 40th in 2006 to 54th in 2007, high unemployment and low GDP per capita.

"The ratings show we need to relook at labour policies urgently," Van Wyk said. The rankings showed government efficiency declined from 25th in 2006 to 35th in 2007. Weaknesses included discrimination hindering economic development at 55th, personal security and private property protection 54th, exchange rate stability 53rd and labour regulations which hinder business activities 51st.

"The private sector continues to perform strongly but inefficiencies in government are starting to sabotage the overall economic outlook," she said. Productivity SA's data shows that private sector business efficiency was steady at 32nd while productivity and efficiency increased from 56 in 2006 ranking to 44 last year. Stock market capitalization as a percentage of GDP was at an impressive 4 and adequate financing to companies from stock markets ranking 17th.

15 countries including South Africa, Indonesia, Italy, Argentina, Brazil, Mexico, Turkey and France are losing ground compared to the top league.
- Sapa