Evidence for action: understanding innovation and skills demand in South Africa
On 30 September 2025, the HSRC hosted a titled How is business innovation shaping skills demand in South Africa? The event brought together policymakers, researchers, and academics to explore how technological and workplace change, driven by digitalisation, the Fourth Industrial Revolution (4IR), and the Just Energy Transition (JET) is reshaping South Africa’s labour market.
At the centre of the discussion was a presentation by Dr Amy Kahn of the HSRC’s Centre for Science, Technology and Innovation Indicators (CeSTII), who shared preliminary findings from an evidence review spanning the 30-year period (1994–2024), on the relationship between business innovation and skills demand. The review, co-authored with Gerard Ralphs and Glen Takalani, will be presented at the upcoming Globelics conference and published by the HSRC early next year.
The team’s review of the evidence findings revealed that business innovation drives rising demand for digital, green, and soft skills, while also producing mixed outcomes such as upskilling, de-skilling, and persistent skills mismatches. The study also highlighted significant evidence gaps, including the need for more sector-specific, gender-responsive, and AI-focused research to guide future policy interventions.
Moderated by Prof Sharlene Swartz, Acting Executive of the HSRC’s Research, Development, Science and Innovation division, and opened by Kgomotso Matjila of the DSTI, the session underscored the urgent need for evidence-based collaboration between business, education, and government to ensure South Africa’s workforce can adapt to a fast-changing economy. “This work helps us move beyond alarmism and towards informed, inclusive policy dialogue, grounded in robust evidence,” said seminar chair, Prof. Sharlene Swartz.
Discussants Dr Sibusiso Manzini (DSTI), Dr Jeanne Gamble (UCT/REAL), and Prof. Arnesh Telukdarie (UJ JBS) deepened the analysis set out by the presenters, challenging linear cause-effect assumptions between innovation and skills. They called for a stronger education-industry compact, more agile technical and vocational systems (TVET), and improved use of labour data to forecast future skills needs. Dr Gamble underscored the importance of solid educational foundations and cautioned against overreliance on short-term training, while Prof. Telukdarie emphasised the role of data-driven planning and ecosystem thinking in skills development.
Key Insights
· Innovation reshapes work: 4IR, JET, and digitalisation are transforming South Africa’s labour market.
· New skills in demand: Strong growth in digital, green, and soft skills needs.
· Persistent gaps: Skills mismatches and weak education–industry coordination remain critical challenges.
· The way forward: Data-driven, sector-specific, and gender-focused research is needed to help fill the evidence gaps.
Next steps include finalising and publishing the evidence review, deepening analysis on sectoral and AI-related skills demand, and incorporating a gender lens in future research.
