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Human Sciences Development Policy Sociology of Work Research Council Research Unit Unit RESEARCH CONSORTIUM ICT SKILLS IN THE LABOUR MARKET: AN OCCUPATIONAL-LEVEL ANALYSIS FOCUSING ON COMPUTER PROFESSIONALS AND ASSOCIATE PROFESSIONALS, Scarce and critical skills Research Project MARCH 2008 RESEARCH COMMISSIONED BY DEPARTMENT OF LABOUR SOUTH AFRICA ICT skills in the labour market: An occupational-level analysis focusing on computer professionals and associate professionals, Joan Roodt and Andrew Paterson January 2008 Project commissioned by Department of Labour 1 CONTENTS INTRODUCTION...4 Perspectives on ICT skills shortages in South Africa...4 Technology change...4 ASGISA...4 Management skills...4 Business skills...4 Experience...5 Migration...5 Equity...5 Higher education curriculum...5 Technical skills...5 APPROACH OF THIS REPORT...5 APPLICATION OF NATIONAL SURVEY DATA TO ESTABLISH THE SIZE OF THE ICT WORKFORCE...6 ESTIMATING THE SIZE OF THE ICT WORKFORCE USING DATA FROM THE OHS AND THE LFS...8 DEFINING ICT WORKERS USING THE SASCO FRAMEWORK...9 PART ONE...12 Employment size of the ICT workforce...12 Distribution of computer professionals and associate professionals by economic sector...14 Distribution of computer professionals and associate professionals by industry...16 Distribution of computer professionals and associate professionals by province...17 Distribution of computer professionals and associate professionals in the public sector...19 Distribution of computer professionals and associate professionals according to skill level...22 Distribution of persons with qualifications in ICT related fields in the workforce...26 Employment of computer professionals and associate professionals by race...28 Employment of computer professionals and associate professionals by gender...29 Employment of computer professionals and associate professionals by race and gender...30 Distribution of computer professionals and associate professionals by age...32 PART TWO...35 Supply...35 Enrolment...35 Enrolment in computer science and data processing Enrolment share for 2005 by race and gender...37 Graduates...38 Graduates from Computer Science and Data processing 1996 to Graduates by qualification level and race...39 Graduates by gender...41 Graduates by qualification level and gender...42 Graduates share between sub-fields of computer science and data processing, 1999 and Average annual growth in computer science and data processing sub-fields...43 Graduates in fields cognate to ICT Graduates by qualification level in ICT-cognate fields of study, PART THREE...48 Supply and demand for ICT Graduates...48 Vacancies for Information and Communication Technology professionals...48 Vacancy data analysis...49 Remuneration...52 Projection of future demand for computer professionals and associate professionals...53 Projecting graduate output between 2005 and Supply and demand...58 SUMMARY...59 Sub-sectors...59 Provincial distribution...60 Public and private sector distribution...61 Skill levels...61 Employment according to race and gender...62 Employment according to age...62 Supply...62 Enrolment...63 Graduations...63 Supply and demand for graduates...64 CONCLUSION...65 REFERENCES INTRODUCTION Information and communication technologies (ICTs) are widely understood to be an enabler of economic growth (UNDP 2001a). South Africa s Deputy President, Phumzile Mlambo-Ngcuka, who launched the Accelerated and Shared Growth Initiative (Asgisa), indicated ICT as an important enabler of growth and development (Mlambo-Ngcuka 2006). The concern has been expressed to the effect that there is a shortage of ICT skills in South Africa which will act as a restraint on the attainment of government s goal to achieve a sustainable annual six per cent growth rate in GDP and to halve unemployment and poverty by Claims about South Africa s apparent ICT skills shortages emanate from a range of sources such as government, training providers, industry, and writers of journal articles and media reports. We will briefly refer to examples from these media regarding the various dimensions of the ICT skills shortage. Perspectives on ICT skills shortages in South Africa Technology change The cyclical nature of the ICT industry is due to influences such as technology obsolescence and changing business requirements and trends, and has led to an ongoing skills shortage locally and globally, says Becky Mosehle, MD of Landelahni Professionals and Technical Appointments (2006). High level specialist skills such as business analyst and programming skills are important for new generation, sophisticated networks (Carte 2006). ASGISA Within the ASGISA initiative business process outsourcing (BPO) and the call centre industry (which requires mainly intermediate ICT skills) is gaining momentum, but higher level ICT skills, such as management skills are required for South Africa to become competitive in the global call centre industry. Management skills In the near future there will be a premium on appropriate project management skills as integral to upgrading the country s ICT infrastructure. Such skills will be needed inter alia to supervise fibre infrastructure and networks that link stadiums to the International Broadcast Centre for the 2010 Soccer World Cup (Mazamisa 2007). Business skills The business environment change constantly and ICT systems need to evolve accordingly. Business skills thus need to go hand-in-hand with ICT skills. ICT workers need to go beyond systems and technologies and build their knowledge and skills in business disciplines and the relationships between business functions and finance (Gillingham 2006). 4 Experience In March the Star reported that there was a chronic shortage of top SAP systems managers in South Africa (The Star, 5 March 2007). According to an IDC study (Van Heerden 2006), 14 per cent of 20 South African firms will seek advanced international skills among South African nationals who gained experience abroad. Migration Countries such as the United Kingdom, Australia, New Zealand, Canada and Germany are experiencing skills shortages in key areas such as IT, engineering, and accounting These countries have been reliant on brain gain from emerging markets such as South Africa, India and China (Western Cape Corporate Placements 2006). Meanwhile the South African government is to go head-hunting in India for ICT experts amongst others (Fraser-Moleketi 2006). Equity There is a shortage of skilled black ICT candidates (Mosehle 2006) and other designated groups in South Africa (Ndlovu 2006). Fulfilling the requirements of the ICT Charter in terms of employment equity is a problem due to a shortage of ICT skills at all levels. More investment is required in skills development and employment equity in the ICT sector, as there has been more recruitment of staff instead of development of resources internally in ICT companies (Coetzer 2007). Higher education curriculum In the financial sector executives indicated that higher education ICT departments are weak in the field of project management and in understanding the relationship between business and ICT systems (Boltin 2006). There is a suggestion that higher education institutions themselves suffer ICT skills shortages and that innovative strategies are required to expand the existing ICT pool of skills (Cross & Adam 2007). Technical skills Government has identified a continuing need for software engineering skills and for advanced skills in soft and hardware development (Manuel 2007; Fraser-Moleketi 2006). In addition, rising broadband speeds and the emergence of multimedia applications, has fuelled the demand for web developer skills (The Independent 2006). The increase in cyber-crime and cyber intrusion has increased demand for ICT system security and information security skills (Hill 2006; Boltin 2006). APPROACH OF THIS REPORT It is necessary to examine the available data to assess whether these statements or views have any validity, as not all sources can be trusted. We must measure the current size of the ICT workforce or the size of sub-occupational groups within the broader ICT sector in order to provide a sufficiently accurate base for estimating current and likely future demand for workers with these kinds of skills. 5 Knowing how many workers are currently employed in a particular occupation, and having additional information about their age and qualification levels, should make it possible to generate estimates of how many such occupational workers are likely to cease working and need to be replaced. Calculation of replacement rates involves an estimate of how many similarly or better - skilled people must be produced through education and training in order to sustain the size of an occupational group whether it is stable, expanding or contracting in response to economic growth and labour market forces. An investigation of the shape and size of the ICT workforce can generate information about the relative size of the ICT workforce in relation to employment in particular economic sectors or within the whole labour market. APPLICATION OF NATIONAL SURVEY DATA TO ESTABLISH THE SIZE OF THE ICT WORKFORCE In order to address the question: How many ICT professionals are there in the South African workforce? it is necessary to define what is meant by ICT, and what is meant by professional. How this question is approached and the accuracy of the answer is influenced by the type and source of data available. Our observation is that public discussion about skills shortages in the ICT sector is peppered with multiple claims as to the size of current shortages and magnitude of future skills shortfalls. The scale of claimed ICT skills shortages vary substantially from source to source, as do persistent claims of oversupply and unemployment among ICT graduates. Estimates of shortages are regularly published in the public domain suggesting a current or likely future ICT skills crisis. Considering the centrality of ICT skills to sustaining economic growth across the South African economy this is perturbing. However, claims that are openly based on the gut-feel of industry insiders, or localized circumstantial evidence have quite limited value. In other instances, advocates for improving ICT skills supply cite evidence from research studies as to the nature and size of skills shortages. While such privately funded research data may potentially be useful, there is seldom sufficient information given about the methodology through which such data was obtained. It is fundamentally important to have access to such information, because without it, there is no way of knowing whether two studies of the same phenomenon - in this case the size of the ICT workforce are comparable. This is why defining what is meant by ICT workforce is so important. For example, a study which defines the ICT workforce as: all workers who use a computer, or as workers who produce software products and services or as computer engineers or as telecommunications professionals or combinations of these and other definitions, will each generate quite different estimates of the size of the ICT workforce. ICT workers can be defined with reference to: 6 their occupation (eg: Computer Programmer) the economic sector within which they work (eg: information technology, telecommunications, banking, insurance, manufacturing etc.). The ICT workforce is not restricted to the ICT sector. the field within which they work (eg: networking, Enterprise Resource Planning, IP telephony, Enterprise Application Integration) their qualification(s) such as higher degree in Computer Science or a vendor accredited diploma. whether their use of a computer is critical to their job description/function in the enterprise. For these reasons we provide descriptions of the data sources we employ, as well as our occupational definitions of ICT workers. The data we use is from the October Household Survey (OHS) of 1996 to 1999 and the Labour Force Survey (LFS) of 2000 to Both of these surveys are designed and administered by the South African government s national statistics agency, Statistics South Africa (StatsSA). The reason why data from two different data sources, the OHS and the LFS are used is because StatsSA terminated the OHS after This means that even though the questions to respondents regarding their occupational status and qualifications in the OHS and LFS are similar, the methodology of the two surveys could have differed slightly, such as in the sampling or the weighting of data. As a result of the transition from one survey dataset to another, some discontinuity may be expected between trends expressed in the OHS data from 1996 to 1999, and trends in expressed in the LFS data from 2000 to Another challenge arising from the data is high annual fluctuations in the number counts for the key occupational categories to be discussed. This is a product of the process of weighting raw data obtained through a sample to approximate national parameters. Both of the surveys on which this analysis depends - the OHS and the LFS are based on samples of the national population. The fluctuations are particularly evident when we disaggregate national employment totals by another category, such as province (x9 sub-categories) or race (x4 categories). In order to smooth out these effects of these fluctuations in both datasets, we decided to create an average for the period covered by each survey. Thus, for the OHS which ran for a period of four years from 1996 to 1999, we generate an annual average employment number per occupational group. Similarly, for the six year period from 2000 to 2005, we create an average employment number. In so doing, we are in a position to establish trends in employment for the ten year period 1996 to It should be apparent that there is not an even split in the number of years of data between the period before the millennium and the second period post millennium. This is because we considered it more important to retain the integrity of each series of survey data (OHS and LFS ) rather than to group one year of LFS data with the OHS series to create an even five year split for each period. 7 ESTIMATING THE SIZE OF THE ICT WORKFORCE USING DATA FROM THE OHS AND THE LFS We will now set out our approach to understanding the size of - and changes in - the ICT workforce. In estimating the size of the ICT workforce, the investigator must generate a definition that is appropriate to her purposes and that can be operationalised. By appropriate, we mean a definition that accords with the investigators intention to estimate the size of the entire ICT workforce or to estimate the size of a particular sub-category of ICT worker. There are challenges faced in each approach. Adopting a definition that encompasses all ICT workers in an economy presents the challenge of deciding on what basis a worker is or is not an ICT worker. The more inclusive this definition becomes, the larger the apparent size of the ICT workforce. A fundamental challenge in estimating the size of the entire ICT workforce is first, how to separate out end-users who use productivity tools (eg: spreadsheet, wordprocessor, presentation, scheduling, and other basic office programme) in endless work environments but whose job description is not specifically ICT related. A second difficulty is how to judge which occupations should or should not be included in the category of ICT workers. For instance, in a number of work environments the core functions and activities central to occupational identity (eg: graphic design) have been migrated almost entirely from the traditional analogue environment into a digital workspace. The flexibility and adaptability of ICT supports the continued diffusion of ICT applications into occupational work environments. Rising levels of integration of ICT into the day-to-day work of different occupations and increased intensity of use of ICT tools continues to impact on the question: what is an ICT worker? A researcher could design and implement her own survey to gather data, in which case she can define her own sample frame (who will be surveyed) and the kinds of data she requires. But because this kind of survey is very expensive and time consuming, researchers are more typically limited to sourcing data from national statistical agencies which undertake regular labour market surveys. Moreover, national statistical agencies are uniquely positioned to conduct surveys on a regular annual or sub-annual basis, and are frequently the only source of datasets that make longitudinal trend analysis possible. In the latter case, the researcher is restricted to working with data elements as received from the national statistics agency, the nature of which she would not ordinarily be able to influence. All survey datasets have limitations. The following analysis is therefore limited to what is permitted within the parameters of the OHS and LFS datasets obtained from Statistics SA. 8 DEFINING ICT WORKERS USING THE SASCO FRAMEWORK Thusfar we have deliberately used a broad generic term - ICT worker to refer to the multiple occupational categories in which: people create and produce ICT products and services, or intensively use ICT in the process of fulfilling their particular occupational role. The South African Standard classification of Occupations (SASCO) list informs how occupational data is captured in the OHS and LFS surveys. It therefore serves as the framework according to which the occupational analysis in this document is undertaken. There are two core occupational categories employed by the SASCO that can be taken to refer to ICT workers: computer professionals, and computer associate professionals. The SASCO describes the two categories as follows: Computer professionals: include computer programmers, system analysts / software engineers, and other computer science professionals Computer associate professionals: include assistant system analysts, computer peripheral equipment operators, and robot controllers This primary categorisation distinguishes between the high level strategic functions of computer professionals and the intermediate level activities of computer associate professionals. These are summarized in Table 1: Table 1: High level characteristics of professionals or engineers occupations and intermediate level characteristics of associate professional or technician occupations Standard occupational code (SOC) Computer professionals Computer associate professionals Electronic and telecommunications engineers Electronic and telecommunications technicians Differences between occupational levels Skills Task orientation in Qualification level workplace High Intermediate Undergraduate degree Post-matric certificate or diploma More strategic and analytic More operational The second category refers to workers in the field of electronics and telecommunications engineering. SASCO refers to: electronic and telecommunications engineers, and electronic and telecommunications engineering technicians which comprise the following occupations: Electronic and telecommunications engineers: include electronic engineers, telecommunications engineers, computer hardware design engineers, and aerospace engineers; Electronic and telecommunications engineering technicians: include computer technicians, aerospace technicians, computer hardware design technicians, electronic technicians, and telecommunications technicians; 9 SASCO separates computer professionals from computer associate professionals, and similarly separates electronic and telecommunications engineers from technicians (See Table 1 above). This is an important distinction to make as it reflects that within occupational fields related to ICT, there are different skills levels. If we were to count the employment data of only these occupational categories: Computer professionals Computer associate professionals Electro
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