The government deems it necessary to make firms in the digital economy mass employers, without any thought of how some are going to respond, including re-evaluating their investments in SA
In its Quarterly Labour Force Survey released on May 31 Stats SA stated that the unemployment rate had decreased to 34.5%, down from 35.3% recorded in the first quarter of 2022. Although this is the first decrease since 2017, the country is far from turning the economic tide — it will take a while to recover the jobs lost in 2020 due to the coronavirus and subsequent lockdown measures to curb its spread.
SA’s emerging digital economy presents both challenges and opportunities. While seeking to address those challenges, it is important that government be more forward-looking in its regulatory thinking and craft policies that enable, rather than hinder opportunities presented by digital technologies. Despite the disruptive effects of digital technologies on traditional businesses, new sectors present clear opportunities for revenue and labour absorption.
The government’s proposal rests on a misunderstanding or disregard of the business model of most companies in the digital technology space. For instance, vehicle owners use the Uber platform to connect with passengers, and pay Uber a fixed fee for use of that platform. Similarly, people offering cleaning services pay SweepSouth an agreed fee to connect with homeowners who require their services.
In his reply to the EFF in parliament on June 3, employment and labour minister Thulas Nxesi explicitly acknowledged that the government was currently working on defining the role of digital industries in the economy. He also acknowledged that the National Economic Development Council was currently working on defining the “employment dynamics” of the sector.