Assessment of skills supply and demand in the digital economy

The International Labour Organization (ILO), the International Telecommunication Union (ITU), the United Nations Development Programme (UNDP) and the Department of Communications and Digital Technologies in South Africa have joined forces to support the implementation of the National Digital and Future Skills Strategy (2021-2025) in South Africa, under the framework of a continental initiative on Boosting Decent Jobs and Enhancing Skills for Youth in Africa’s Digital Economy.

As part of the inception activities in South Africa, the organizations are seeking the support of a consultant to assess the current and emerging skills supply and demand in the digital economy in South Africa with the view to identify gaps, opportunities and detect specific needs that, if addressed, can generate new employment opportunities for the youth. Applicants might apply as individual consultants or team of consultants (in which case the lead consultant needs to be identified, roles and responsibilities explained and a detailed financial breakdown provided).

1. Background

Technical context:

According to the International Labour Organization (ILO), there are about 63 million unemployed youth, aged 15–24 years, globally in 2018, with many of them facing long-term unemployment. At the same time, millions of jobs for people requiring advanced digital skills are going unfilled worldwide.

In South Africa, those aged 15–34 years are considered as youth. South Africa’s unemployment rate is high for both youth and adults; however, the unemployment rate among young people aged 15–34 was 38,2%, implying that more than one in every three young people in the labour force did not have a job in the first quarter of 2018. Some of these young people have become discouraged with the labour market and they are also not building on their skills base through education and training – they are not in employment, education or training (NEET). As a result of the Covid-19 pandemic and the prolonged lockdown period, the situation has further deteriorated. According to StatsSA survey results of the 1st quarter of 2021, unemployment rate in South Africa was 32.6% where 46.3 % was youth and 9.3% were university graduates.

The PC4IR Diagnostic Report (RSA, 2020a) indicates that the current skills ecosystem is characterized by a “silo” mentality and the speed at which the entities are able to adapt and change curricula, understand the needs of the workplace and create accredited training solutions is questionable. By virtue of stagnated economic growth, coupled with a skills mismatch, young people are excluded from being absorbed into the labour market. When young people leave and do not connect to the labour market or find opportunities for further education and training, they become “invisible” to the existing administrative systems.

This requires radical shifts in the current human capacity ecosystems, including re-thinking the architecture of the skills ecosystem, accelerating upskilling and plugging upskilled youth directly into high growth market sectors and jobs of the future, and re-skilling the existing workforce. Digital technologies are more urgent than before since the experience of Covid-19. This has shown that the future world of work shall require a certain level of digital skills from all communities regardless of age, education background, class or social status.

ITU research estimates that there will be tens of millions of jobs for people with advanced digital skills in the coming years, with some economies predicting a talent gap for workers with advanced digital skills and others ranking ICT specialists among their fastest growing jobs. Basic and intermediate digital skills are also required for most jobs across all sectors as well as to support the digitization of processes and services, to perform online microwork and to find and or apply for jobs online.

In response, South Africa has embarked on a series of measure to improve labour market opportunities for young people. These include the adoption of a National Digital and Future Skills Strategy (2021-2025) and the preparation of its corresponding implementation plan, which focuses on equipping young people with the skills necessary to prepare for the future of work in the Fourth Industrial Revolution and digital economy. Other relevant policy frameworks include the establishment of a Presidential Commission on the Fourth Industrial Revolution and the development of a Digital Economy Masterplan.

Context of the assignment:

To create decent employment and enhance skills for youth in Africa’s digital economy, the International Labour Organization (ILO) and the International Telecommunication Union (ITU), with the support of the African Union (AU), have initiated a programme with continental reach. The ILO/ITU/AU Joint Programme on Boosting Decent Jobs and Enhancing Skills for Youth in Africa’s Digital Economy has been launched under the aegis of the Global Initiative on Decent Jobs for Youth and focuses initially on six African countries (Côte d’Ivoire, Kenya, Nigeria, Rwanda, Senegal, South Africa, more information available is here).

The programme framework at continental and national level was developed in consultation with young people, governments, workers’ and employers’ organizations, educators and public and private actors of the digital economy. The programme will operate through an iterative cycle of implementing interventions to create jobs, strengthen digital skills and improve employment services; establishing partnerships and networks, and providing policy advice using new diagnostic tools and data showing what best boosts youth employment. Informed by digital economy priorities and plans at the national level, the programme will facilitate exchange of information and learning across six target countries and beyond.

The design of a Joint Programme in South Africa, currently under discussion among the Department of Communications and Digital Technologies (DCDT), the International Labour Organization (ILO), the International Telecommunication Union (ITU) and the United Nations Development Programme (UNDP), will be framed as a contribution to the National Digital and Future Skills Strategy (2021-2025). Based on initial research and a series of consultations held with a broad range of stakeholders, the focus will be on the development of a digital skills labour market ecosystem in order to provide youth NEET with skills and decent employment opportunities, through innovative labour intermediation and the development of a series of digital skills training programmes at the pre-entry level to the workplace.

2. Objective of the assignment

The objectives of this assignment are to:

· Conduct a review of key policies and national employment promotion strategies to assess their potential to boost youth employment in the digital economy.

· Assess current and emerging skills supply and demand in the digital economy in South Africa with the view to identify gaps, opportunities and detect specific skills needs that, if addressed, can generate new employment opportunities for young people.

In order to avoid duplication of work already carried out, either by the partner agencies or by other stakeholders, the assignment will take into consideration the Research Framework and Implementation Programme for the National Digital and Future Skills Strategy of South Africa, 2021 – 2025, the National Digital Skills Masterplan, as well as other studies on digital skills / digital economy recently conducted in the country.

The outcomes of the assignment will inform the co-designing of digital skills development initiatives with DCDT, ILO, ITU and UNDP’s constituents in South Africa. In the short term, these will prioritize activities targeted to youth NEET, however the assessment can potentially inform a series of other system-level interventions, such as:

· strengthening and upgrading digital literacy and skills curricula and competency standards;

· integrating digital literacy and skills trainings into existing educational programmes at national, provincial and district levels and at different levels/parts of the education system;

· capacitating training institutions, trainers and teachers to deliver training programmes with digital skills components;

· establishing platforms/ forums to integrate the trained job seekers with opportunities in the digital economy (linking demand with supply);

· Identifying sectoral digital skills demand and supply gap;

· Identifying digital skills policy and regulatory imperatives including access and connectivity

· Understanding in the ecosystem for skills development in a digital economy and related enablers in the context of South Africa such as digital infrastructure connectivity and access; geographical cultural or gender related impediments among others.

Key research areas that the assessment will cover include:

· Digital economy potential and labour market policy review

• A review of existing policies and strategies related to the digital economy and recommendations to unlock employment opportunities for young women and men, including those who live with disability.
• A review of national and local level initiatives led by public and private sector and community based organizations with a view of informing the choice of geographic areas and economic sectors to further focus the digital skills assessment on.
• Current and potential job growth opportunities from a public and private sector development perspective including an identification of priority sectors and a review of key national employment promotion efforts.
• This initial review will inform the sectors, levels and geographical scope of the assignment, whose boundaries are defined by the research already carried out in the framework of the National Digital and Future Skills Strategy.

· Skills demand side:**

• Current and emerging skills required by the private and public sector to unlock job creation opportunities in the digital economy (based on desk review, establishment skills surveys and focus group discussions to fill gaps, compare and complement results).
• Critical digital skills (by type of digital skills and related qualifications) and labour shortages (by type of occupation) in the targeted sectors where demand has spiked due to digitalization and/or which are prioritized under national development plans.
• Other employability skills that can be relevant to the targeted sectors (foundation skills, core skill[1], business management and entrepreneurship skills, transferrable technical skills).

· Skills supply side:

• Understanding of the youth NEET target audience, in terms of needs, potential and vulnerabilities.
• Sets of skills currently available and resulting from on-going (university, TVET, formal and informal) training courses and programmes.
• Existing training programmes that are of significant importance to the digital economy, including how many students they train (enrolments, graduation) for which specialisations and where these graduates end up working.

· Skills demand and supply matching

• Based on the outcomes of the research, this section provides an assessment of the matching between the demand for skills and the supply of skills for the digital economy, within the levels and sectors prioritized.

· Final recommendations

• Recommendations on economic sectors and geographic areas the joint programme should prioritize.
• Recommendations on missing training programmes (by mirroring skill demand and supply analysis).
• Stakeholders mapping: identification of national and local level stakeholders that can contribute to digital skills development and utilization.

3. Scope of work and tasks:

The scope of the assessment comprises the following tasks;

I. Develop an inception report that outlines a plan of action, and contains a detailed description of the assessment methodology (incl. stakeholder engagement mechanism, effective and efficient data collection tools) as well as the timeframe for conducting the assessment and completing the assignment.

This task implies:

· Review of the existing work on digital skills assessments at national, provincial and district levels

• Get familiar with ILO and ITU tools as well as relevant publication on youth employment in the digital economy, digital skills assessment and skills mismatch and utilize these in the work.[2]
• Review major digital skills frameworks, assessment methodologies, policies and strategies at national, provincial and district levels, in particular taking into account the Research Framework and Implementation Programme for the National Digital and Future Skills Strategy of South Africa, 2021 – 2025, as well as available approaches that can serve the scope of this assignment.
• Identify and review recent country level studies, including but not limited to the youth labour market situation and the potential of innovation and digital technology to spur job growth.
• Provide a brief overview of the current state of digital skills assessment in the country with the objective of making recommendations on how existing capacities could be strengthened throughout the programme implementation.

· Define key constituents and further stakeholders to help manage the assessment process

• Mapping of key stakeholders in the digital skills and employment ecosystem.
• Suggest mechanisms for regular dialogue /consultation in view of validating the assessment results while strengthening local capacities to institutionalize these types of assessments in the future.

· Further narrowing down the scope of the assessment in terms of its geographic focus, youth groups and target economic sectors through a series of consultations with key stakeholders

• Identify and validate the scope of the analysis in terms of targeted economic sectors and occupations
• Define geographic target areas (the assignment might also broadly cover the national economy depending on the outcome of the initial consultations)
• Agree on population of individuals to be targeted (specific groups under youth NEET, vulnerable young women and men in selected communities, youth with disabilities, etc.)

· Definition of methodology and design data collection tools for the assignment

• Select appropriate qualitative and quantitative data collection tools for both the supply and demand analysis (that might include desk research, focus group discussions, key informant interviews, tracer studies, (online) surveys) to be used during the assignment, including a description of the target groups, sample sizes, and relevant research questions for each data collection method/tool.

· Drafting of an inception report

• Present findings from the above together with a detailed work plan, a proposal on how to continue engaging constituents and other key stakeholders, effective and efficient data collection methodology and timeframe in an inception report.
• Revise and finalize the inception report following comments received from the key partners involved (ILO, ITU, UNDP, DCDT).

II. Assessing current and emerging digital skills supply and demand in the digital economy in South Africa

This task implies (sequencing of tasks to be agreed as part of the inception phase):

· Labour market policy review

• Conduct in-depth interviews with representatives of government, key ministries, and with private and public employment service organizations as well as with business associations and worker representatives to understand their perception of the current skills supply and demand for the digital economy (up to 25 key informant interviews which might be divided by sector/industry). Interviews may be carried out in-person or on the phone and serve to complement the quantitative data collection.
• Desk review of key national employment promotion efforts to assess their linkages with the Joint Programme and its objective to boost youth employment in the digital economy. Among them: Public Employment Services (PES), National Employment Policy, Presidential Youth Employment Intervention (with a focus on the National Pathway Management Network), Expanded Public Works Programme (EPWP), Community Works Programme (CWP) and youth service programmes such as the National Youth Service (NYS) and the National Rural Youth Service Corps (NARYSEC). The research will involve a series of bilateral consultations (short interviews) with government agencies and social partners to explore their interest to support skills utilization strategies.

· Design, finalize and deploy quantitative data collection tools as per the inception report (skills demand)

• Develop finalize and deploy an online questionnaire for enterprises facing a spike in demand for specific digital skills and occupations due to digitalization.
• Ensure that the questionnaires are disseminated through various platforms so as to get many potential respondents as possible.
• Ensure that the required number of online responses (to be agreed as part of the inception report) are received to enable sound quantitative analysis. This should be complemented through phone interviews where necessary and focus group discussions to review and complement results.
• Compile and store all collected data through online surveys in an appropriately structured format (to be agreed as part of the inception phase).

· Design, finalize and deploy qualitative data collection tools as per the inception report (skills supply and understanding of youth NEET)

• Developing guidelines for skills supply (training and education providers) semi-structured key informant interviews, informed by the desk review, and methods on how to systematize and analyze responses.
• Conduct in-depth interviews with key training providers and designers of formal and informal vocational and technical education with the objective of mapping and analyzing existing supply that is currently contributing to the creation of digital skills and on-going/emerging training programmes that could be further enhanced
• Document and store contact details, answers, findings and relevant documents and in an appropriately structured format (to be agreed as part of the inception phase).
• Develop, finalize and deploy an online questionnaire to facilitate a better understanding of the target audience – their skills, aspirations and skill gaps – and to be administered through a relevant sample of individuals according to the programme scope. This might include a tracer survey[3] for young individuals that participated in training programmes, including through TVET institutions.

· Analyze collected data and conduct a gap analysis

• Conduct data analysis based on collected data. During the analysis, pay attention to the previously identified underrepresented groups. Comparing these groups’ skills levels with those of the population as whole may reveal skills inequalities.
• Conduct a gap analysis to gain an understanding of any mismatch between the nation’s current digital skills supply and its current digital skills demand, using information gathered. Some skills mismatch information is readily available in data compiled as part of the desk review. Use some available potential ways of examining the data in order to identify digital skills gaps.

· Synthesize findings and prepare their dissemination

• Develop an annotated outline of the assessment report, including sections on: background, methodology, sections related to the main research questions as well as a section on recommendation and action to be taken by partners.
• Based on feedback on the annotated outline, submit an elaborate presentation of the findings for further comments and suggestions.
• Validate initial findings with partners and national stakeholders’ representatives.
• Submit a final report and associated PowerPoint slides to include all required areas of assessment, for reference and any other purpose as maybe deemed applicable.
• Formulate a dissemination strategy determining to whom and how assessment information is to be communicated.

The ILO will act as coordinator for this contract and will facilitate the collection of inputs from ITU, UNDP and DCDT that will jointly provide guidance for layout and design of the reports and related materials and presentations. Data, figures and tables need to be submitted in separate excel sheets. ITU and ILO’s tools and approaches on skills needs assessment, supply and demand analysis and related research work are an essential reference to carry out this assignment and they will be shared upon selection of the consultant(s).

4. Assignment concrete deliverables and timeline

The assignment should be carried out over a period of around three (3) months. The technical proposal should include the following deliverables, within the recommended timeframe.

**

Deliverable 1 – Inception Report (Month 1): the inception report outlines the plan of action and contains a detailed description of a stakeholder consultation and engagement mechanism, an effective and efficient data collection methodology and time frame for conducting the assessment and completing the assignment.**

Deliverable 2 – Qualitative and quantitative data collection tools (Month 1) : this includes final questionnaires (online survey) and interview guidelines (semi-structures key informant interviews) as well as a list of primary and alternative target groups for data collection

Deliverable 3 – Annotated outline (ca. 5 pages) (Month 2) of the assessment report: the annotated outline contains a brief description of each section and sub-section of the main report, including an indication which research question is going to be answered in which part and through which data collection methods.

Deliverable 4 – Database of conducted online and telephone surveys (quantitative data collection) (Month 2) : this includes obtaining an agreed number of observations (as per the inception report) by disseminating the survey through various online platforms and conducting a selected number of phone interviews if so appropriate (for hard to reach populations, if applicable)

Deliverable 5 – Database of conducted in-person/phone interviews (Month 2) : this includes detailed notes and/or transcripts of semi-structured interviews**

Deliverable 6 – Draft assessment report (max 40. Pages, excluding annexes) (Month 3)

Deliverable 7 – Final assessment report (Month 3) following revisions of the draft report as well as detailed slide deck focusing on the findings and recommendations of the assignment

5. Roles, reporting and specific clauses

• The consultant(s), throughout the course of this assignment, will report on a weekly basis to the ILO. The ILO will coordinate, on a weekly basis, technical inputs collection from ITU, UNDP and DCDT.
• Data collection tools are either provided by the ILO and ITU or will be shared and discussed with them prior to their use and mutually agreed on;
• If it appears necessary to modify the tasks of work or exceed the time allocated, the consultant(s) must discuss the circumstances with the ILO and obtain prior written approval.
• The ILO, in consultation with ITU, UNDP and DCDT, may disclose the draft or final report and/or any related information of the systematic review to any person and for any purpose they may deem appropriate.
• All data and information received from the ILO, ITU, UNDP and DCDT for the purpose of this assignment are to be treated confidentially.

6. Required qualifications, skills and experience:

• An Advanced University Degree in any of these relevant fields: social science, social policy, economics, development studies, etc.), or a related field with experience in skills evaluations or assessments at country or regional level;
• At least 8 years of progressive experience of working in capacity/skills development, labour market policy making and programme implementation, focusing on skills development and other related fields, and having strong understanding of digital economy in the context of South Africa would be an asset;
• Proven experience in collecting qualitative and or quantitative data for socio-economic research projects;
• In depth understanding of labour market and youth employment trends in South Africa;
• Proven experience in working with and supporting government agencies and/or of large-scale digital transformation or ICT, and skills assessment/measurement projects in South Africa will be an added advantage;
• Excellent working relationships with youth stakeholders in South Africa, including governmental organizations, non-governmental organizations and youth organizations;
• Demonstrates strong English written communication and drafting skills.