DigiMag Glacier_Q4_2017 - Page 5

THE UNDRINKABLE FOUNTAIN: SA’S YOUNG, UNEMPLOYABLE HUMAN CAPITAL ‘Demographic dividend’ was the trending buzz phrase at a spring breakfast seminar hosted by the Institute for Futures Research (IFR) in September. DEMOGRAPHIC DIVIDEND REFERS TO THE ADVANTAGE or economic benefit a country potentially has with respect to the size of its young, economically active, working- age population in relation to the size of its ageing population. The point is that the latter will lose its ability to be actively economically productive, and that there needs to be an able-bodied workforce to replace it, with the skills and intellectual prowess to do the job. A balance between the sizes of the two population groups is critical to the productivity and economic success of a country. Birth rates are key Developed countries have an ageing population, with fertility rates having decreased significantly in the past 50 years. If we consider that currently the birth rate in South Africa is 2.5 births per woman, in the EU it is 1.6. The highest birth rates are found in France with 2.0 and Ireland with 1.9, while Germany has the lowest birth rate in Europe with 1.5. In the US and Japan, the average births per woman are 1.8 and 1.5 respectively 1 . This bleak fertility picture would explain the incentives by some of these governments (extended maternity leave with full benefits is just one example) to increase the fertility rate. The leaders of these nations understand the impact that an old, economically unproductive population will have in the too-near future. These are examples of low demographic dividend. SA has the edge IFR director Dr Morné Mostert says South Africa is in the pound seats with respect to its demographic dividend. But of course, the challenges that exist are twofold: while we have the age advantage, we have neither the national job creation nor the education and skills development strategies in place – and running – to capitalise on this dividend. At the moment we have a young population