SALGA Council of Mayors 6th Feb 2019
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SALGA Council of Mayors
6th Feb 2019
1
The Model
250k 400k
Candidate Profile Available Channels T1M intervention/s
ALL BELOW PLUS:
Graduate / incomplete tertiary ALL BELOW PLUS:
High potential CFT Training-top
Graduate Bridge Competency prep 5K
60K
Vocational training and/or ALL BELOW PLUS: ALL BELOW PLUS:
experience working for/ Opportunity to become
running an SME Gauteng@Work 5k
own-account Contractor conversion
contractor
50k
ALL BELOW PLUS:
Matric with limited or ALL BELOW PLUS:
no employment history and no Entry level job in
vocational Sector Compacts
targeted sectors/ value Matric Validation 15k
chain-linked SME or
Microfranchise
140k
BASELINE
Sub-matric L-Labs & BYOD 110k
BASELINE
No employment history incl. 2nd Chance Matric 150k
Foundation skills Township Marketplace
Other barriers Incl.
Transitional/ work Transitional work (incl. 115k learners–
graduating
experience dedicated EPWP channel)
FY2019-20
350k assisted
as at Feb 2017 Work-seeker support
2
Costing Model
Understanding the costing elements
GPG’s Grant Funding (R227 Million) is a 20 % catalytic contribution to a much wider
social compact
20% R 206 mill Pay for outcome element
R1 059 039 108
58% R 611 mill Enterprise element
Complete financial need 4% R 39 mill Skills transition element
to be mobilized
20% R 198 mill Core element
FY 2017-2019
541, 550 T1M Performance and projection
young people have been impacted by the Tshepo 1Million initiative as at end December 2018 (***). The
specific figures per pillar as have been reported to legislature at various stages are as follows :
Pillar FY 2014-2016 Jan 2017-Dec Totals across
(as reported 2018 term to date
Nov 2017) (higher
standard
applied )
1 Demand Led learning 129 046 132 287 261 333
2 On-the-job training,work
experiences, internships 19 403 8 521 27 924
and learnerships
3 Full time jobs 48 751 15 059 63 810
4 Self-employment 14 242 2 007 16 249
• The elevation of standards post Jan 2017 placements includes full decent jobs standard (full time work, sectoral minimum wage, labour protections)
** The elevated standard for self-employment only counts beneficiaries who have started a new business/ become self-employed (historic standard only
measured the training to do so)
***- total number encompasses 350k beneficiaries reported as part of SOPA 2017 34
Headlines
• Every year, only 6 out of every 100 young people who graduate from
schools, TVETS and universities have a paying job within a year to
18 months. The rest are locked out because of gaps in their skills,
because they live too far from where jobs they could afford to travel
to are, and because they just aren’t work-ready.
• Billions in private sector investment can create all kinds of new
vacancies, but they don’t change this reality. Programmes like the
clearing house run under Tshepo 1Million by Harambee Youth
Employment Accelerator, the programme’s key partner, do change it,
and change the kind of economy we can imagine in the process.
• The programme does not simply push unemployed youth forward
for jobs they are not yet ready for (and would therefore not be able to
secure) but instead runs a range of interventions to build job-
readiness and develop specific competencies before young people
are placed into an opportunity. This ranges from the broad-based
mass digital learning system now running in township libraries (see
slides below) to much more job-specific / task-specific bridging
needed to prepare young people for what they will actually do on the
job.5
Headlines
• Tshepo 1Million is now succeeding in providing such pathways for
young people at all skill levels – from dropouts to graduates – from
every corner of Gauteng. ,These pathways are managed by a common
clearing house – a network of systems and people that connect the
dots for young people who would otherwise not know where to start
and what to do next. This clearing house is run as a partnership with
Harambee Youth Employment Accelerator, and is the nerve centre of a
network of partnerships with over 450 other companies.
• Young people are matched to pathways based on their skills, where
they live and what job they are suited for. The clearing house then
manages them along that pathway
• The programme has now successfully evolved from a general label for a
range of different, disconnected programmes to a system which uses
training and on-the-job learning as preparation for specific kinds of
full time jobs and self-employment that actually exist – or can exist
– in the Gauteng economy.6
Headlines
• Tshepo 1Million and its partners recognise that if we are to draw the 2.7
million economically unengaged youth in Gauteng into the economy, we
cannot accept the rules of the economy as it stands. We must enable
firms in townships to become employers and providing employment
(and improving the local township economy) by enabling young
people to become self-employed service providers and franchise
operators.
• The Tshepo 1Million programme’s successes in this area include the
Smart Start initiative, which places young ECD practitioners into their own
micro-creches as a going concern. Other such innovative pathways under
the programme include young people who are equipped to take part in a
gig-economy marketplace for township-based survey-takers , and
now micro owner-drivers of short-run delivery vehicles which
distribute goods to township businesses.
• The digital survey teams attached to the programme, in Feb-March
2017,collected the largest data set of township firms ever assembled by
GPG (80,000-plus) and is now using this data to target and enable
partners to do business with the townships and create jobs in the process.7
Headlines
• Tshepo 1Million continues to evolve economic pathways
for young people at all skill levels – from dropouts to
graduates – from every corner of Gauteng. ,These
pathways are managed by a common clearing house – a
network of systems and people that connect the dots for
young people who would otherwise not know where to
start and what to do next.
• This clearing house is run as a partnership with
Harambee Youth Employment Accelerator, and is the
nerve centre of a network of partnerships with over 500
other companies.
• Young people are matched to pathways based on their
skills, where they live and what job they are suited for.8
Section 2
Refined Definitions of Success – 2017-18 financial year
SMME Clearing House as
EnablerSMME Clearing
House
The Problem Statement
The Unemployed Live The township Township firms and
in Townships SMME economy is workers face huge
• Unemployment, especially youth
not hiring enough barriers
unemployment, manifests itself in
• Evidence from township economy
townships and high transport costs • The SMME economy this relies on
is not labour absorbent –in the audits show 85%-90% of SMMES
particularly disadvantage low-
most recent tax cycle, 54 % of all would not have the capital base or
income black youth living far from
formal jobs were accounted for by compliance capacity to participate
jobs
the largest 1000 firms in the in targeted procurement without
country programmatic support
• The SMME economy in these
deprived areas is a public policy • Source : Small Business Initiative
• This echoes conditions in corporate
focal point , on the assumption that
• SMMEs operating below R1M ZAR enterprise/ supplier development
”set asides” for SMMEs will grow
annual turnover (66 700k USD) pipeline, with only 19% of
local business turnover and hence
account for only 0,2 to 1,2 jobs per supported entities even in the
demand for local labour.
firm black, and 80% on what amounts
• Source : SA SME Fund/ Finfind to corporate life support ,
indicating there is also a pipeline
• Without support, they cannot problem which requires de-risking
market access across the board.
expand, and will not employ.
• Source : Catalyst4Growth10
SMME Clearing
House
Revealing the township economy through data
High Level Sector breakdown of firms identified township economy audits - Wave 1 (Feb-March
2017) – 64k firms classified of 80k audited across 9 largest townships using geo-coded survey
engine and gig economy workers
Sector # Firms
Key analysis: township
Agriculture & Agro Processing 5 332
economies include a wide range
Retail 19 579 of sectors, but their customer
Services 17 542 base and value chain
Manufacturing 6 068 integration is highly localized.
Construction and Real Estate 4 337
Transport 3 817
Creative Industry 2 753
Tourism 1 210
Total 64 097
• Median turnover 30k ZAR (2000 USD) per month,
• 86 % not formally registered,
• 90 % do not use a business bank account,
• 54 % keep no financial records ,
• over 2/3 operate in technically illegal conditionsSMME Clearing
House
Theory of Change – Driving township SMME inclusion
Enabling Discovery Enabling De-risking Enabling Delivery
• Systematic provocation of more • Using the data gathered via digital • Building programmatic support into
aggressive economic development means and via the process main contracts to enable SMMEs
through procurement from firms in of supporting SMMEs to make it from the bottom of the pyramid to
low income areas less risky for govts and be effective sub-contractors and to
corporates to procure from SMMEs grow in to fully fledged supplier
• Using digitization via mobile and for banks to finance them
phones to make informal firms when they do get contracts • Targeted Business Development
visible as potential contractors and Support
service providers
• Provoking the state – and then
corporates – to find or build a
pipeline of SMMEs in the most
deprived areas , at the bottom of
the pyramid .SMME Clearing
House
EVOLVING TER AS A YOUTH EMPOWERMENT POLICY LEVER
Offering to SMMES to drive Programme & Partner Landscape
hiring from Tshepo 1Million
Where and how SMMES are discovered/ join the network
SMME Clearing House = Demand source
Small- Micro Small- Medium
Hiring Support < R1Million per annum > R1Million Per annum
• Firms identified through township • Suppliers registered for BDS/ ESD
• Employment Tax Incentive enrollment /
area audits programmes
Turnover tax registration • Gauteng Provincial Treasury suppliers
• Clients of existing platforms
• HR/LR support (workshops, toolkits, digital • Businesses listed in existing online
• Firms enrolled through
training content) databases
complimentary outreach
• YES process facilitation • Word of mouth referral • Above the line promotion
• Local forums and associations • Local forums and associations
Business Dev Support
• Digital Platform enrollment = opportunities Platforms :
systems which link/ bundle many SMMEs as a single operator and/or
• Managed/ curated business process mentoring provide access to market by allowing customers to order from one place
• Business process / product incubation Established Emerging
• Operational scale-up support
• Financial product matching/ facilitation • Existing user base, positive user • Minimum viable product/ proof of
growth with multiple sites concept but on a single/ limited number
Focus points for convening roundtables • Sector/ industry credibility of sites
• Core operations profitable • Resource constrained
Sectors Ecosystems • Clear & resourced scale-up pathway • Pre-revenue / not yet commercially stable
• FMCG/ logistics • Platform Operators
• Agri/ Food • BDS aggregators How the law helps Existing interventions driven by law
• Construction/ • SCM/ ESD • BBBEE codes • Enterprise Development (funding/ BDS)
maintenance intermediaries • YES /Employment Tax • Supplier development (funding/BDS)
• Distributed • Funders/ Financial Incentive • Targeted Financial12
services with bundled
Manufacturing services • PPPFA (public sector) BDSSMME Clearing
House
JAN-JULY 2019 AUG 2019- MARCH 2020 APRIL 2020 ONWARDS
• Gauteng@work Public
Public Sector
Public Sector • Commercial Rapid Sector
Channels Expand/ Refine
Channels Land release Expand/ Refine Channels
and optimize
• Geographic and optimize all
Scaled system all phase /2
MVP / Skunkworks Township supplier phase 1 channels Full service
on Common channels
(UJ) + MS support targeting organization
Platform
PHASE 1
PHASE 2
PHASE 3
• Apply SMME
clearing house Private
Private Sector Private Sector Expand Tembisa
models to 4,810 Sector
Channels Channels model to All 9 high
identified Channels
Diepsloot, density
commercial
MVP/Skunkworks Scaled system Sebokeng and townships plus
operating sites Full service
+ partner on Common Mamelodi plus other viables
firms in Tembisa organzation
platforms Platform other viable hubs
• Incl. Hosted YES
placements
TARGET/ IMPACT
TARGET/ IMPACT
TARGET/ IMPACT
Public Private
Public Sector Private Sector Public Sector Private Sector
Sector Sector
200- 500 firms @ 800- 1000 firms @ 2500- 5000
1500- 2000 5000 firms
1.5 jobs per 1.5 jobs per 3000 firms = 4 firms = 3
firms = 2 250 = 7 500 jobs
enterprise = 300 – enterprise = 1200 500 jobs 750 – 7 500
– 3000 jobs per FY
750 jobs – 1500 jobs jobsSiyabonga
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