Unemployment within the South African economy has indicated to be a prominent
issue with an official unemployment rate of 25.2% in the year 2013 (Statistics South
Africa, 2013). The South African government released the National Growth Path that
is primarily focused on creating stable economic growth, in order to create jobs as
well as eradicate inequality. This is followed by the Industrial Policy Action Plan 2
(IPAP2) document which includes a policy package to facilitate the specific industries
that are identified for job creation (DTI, 2012). Thus, employment creation has
become a real concern within the South African context.
The highest percentage of total employment has remained within the services
industry since 2004, at a rate above 60%. This is double the combined employment
within agriculture and industry, with agriculture at 5% and industry at 25% of total
employment. Thus the services industry has contributed to the highest amount of
employment in South Africa. The exports of services have grown consistently since
the year 2004. The largest exporter within the services industry is the travel sector,
with substantial exports which peaked at 9 billion dollars in 2013. When analysing
the remaining service sectors within the South African economy, it indicates that
there can be a greater deal of growth in exports, with the majority of service sectors
exporting less than 1 billion dollars.
Export expansion can be a basis to growth in employment creation, if policy can
specifically be focused towards it. Because of the demand for methods and strategy
for employment creation, this study reviewed the literature regarding the effects of
export expansion, as well as research methods to identify labour intensive sectors
and their spill-over effects. Studies show that the increases in exports have a
predominantly positive effect on employment. Furthermore, these studies also found
prominent inter-linkages of services sectors within the economy. The aim of this
study was to determine the most employment-intensive services sectors and their
linkages with other sectors within the South African economy, in order to make
recommendations for policy makers towards sustainable economic growth and job
creation in the services sector.
The Social Accounting Matrix (SAM) used in this study model generally explains
through a general table of a region or nation, by listing the regional or national
economy accounting data within a square table. Thus the main goal of the SAM
model was to form a comprehensive economic-wide database, which included
information about all the productive activities in the economy, as well as
incorporating unproductive institutions and markets, such as capital markets, factor
markets, government, households and the rest of the world. The above model can
thus be used to determine the link between a specific sectors expansion and the
labour intensity of that sector. Furthermore, the model is not only limited to measure
labour intensity, but it can also measure the specific GDP and production spill-over
effects for a specific sector within the economy.
Therefore, the study could analyse the spill-over effects of specific services sectors,
as well as the possible employment effect it could have throughout the South African
economy. The results of the study could then also be used as a strategy for export
expansion and employment creation. There is currently no policy focused strategy
for the services industry, which could become beneficial.
The first step for the empirical analysis was to identify the services sectors which are
tradable/ exportable. The following SAM services sectors are more tradable/
exportable than others in commercial terms, and thus they will be used in the
analysis of this study:
- Building and Construction
- Trade
- Accommodation
- Communication
- Finance and Insurance
- Real Estate
- Business Services
- Community, Social and Personal Services
In the second part of the study, the objective was to determine the most
employment-intensive services sectors and its linkages with other sectors within the
South African economy, in order to make recommendations for policy makers
towards sustainable economic growth and job creation in the services sector. The
results of this study indicated that an increase in the exports of services in South
Africa has a definite impact on employment in the following sectors:
- Production
o Accommodation, Real Estate and Building and Construction
- GDP
o Accommodation, Real Estate and Building and Construction
- Labour
o Community, Social and Personal Services, Accommodation, and
Business Services / MCom (International Trade), North-West University, Potchefstroom Campus, 2015
| Identifer | oai:union.ndltd.org:NWUBOLOKA1/oai:dspace.nwu.ac.za:10394/15693 |
| Date | January 2015 |
| Creators | Van Heerden, Francois Mauritz |
| Source Sets | North-West University |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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