This research brief intends to draw the attention of development studies and information & communication technology (ICT) scholars and practitioners who wish to better understand the labor market and in particular the potential of digital work within the ICT and services sub-sector. In particular, the brief examines business process outsourcing (BPO) and whether this industry can have a lasting change on digital employment for youth and other marginalized groups in South Africa.
The BPO sector is known as the business process services (BPS) sector in South Africa and this sector provides enormous economic and market potential to the services industry. BPS strategies are playing a major role in the government’s current industrial strategy and can contribute significantly to the transition into digital work in South Africa where many young people are found to be unemployed.
The research brief is based on a study, Rogan, M., Diga, K., and Valodia, I (2013). Labour Market Analysis and Business Process Services for South Africa: Poverty Reduction through Information and Digital Employment Initiative. The study uses national labour force statistics to show that South Africa’s youth continue to experience extraordinary levels of unemployment despite a high level of secondary school completion. In 2010, approximately 90 percent of the employed youth between 19-24 years old were wage earners and around 85 percent of the same group were working in private enterprise.
One third of the employed 19-24 year olds were concentrated within the wholesale and retail sectors yet one notes the second major employer for youth was in community, social and personal services. Business Process Services in South Africa may have a role in digital employment in the services sector. Government-funded programmes such as Monyetla youth training initiative is growing after seeing the first round of BPS-trained graduates become absorbed into the sector.