LETTER: Jobs cannot be created out of thin air

David Sykes’ letter refers (“Job creation should precede upskilling”, January 15). I don’t believe there is a governmental policy decision that can “create jobs”. In fact, it is fallacy to think of “job creation” as a goal to be pursued at all. 

I own a small business. My experience shows that people are employed to allow a business to be able to be more competitive and more effective in supplying a product to the market.

There is no room for simply adding staff to “create jobs”. Without thrashing out all the details of cost versus productivity such a job creation exercise is uncompetitive and will fail, possibly pulling down the business with it. On the other hand, as an effective business grows it needs more people.

There is also no sense in looking for labour-intensive industries. If you do so you are looking in the wrong place. You need to start with the market. Look first to what the market needs and what you can sell sustainably (profitably) to the market. If that production process is labour intensive it is a good sustainable outcome.

The world is a highly competitive place and SA has to consider how we can meaningfully contribute to the global economy to be relevant. This is what China realised when it opened its doors to the world and capitalist business practices.

Chinese policy leaders realised the country would never cope with its own humanitarian needs until it was able to reclaim its former position as the world’s leading manufacturer and thereby earn foreign cash and feed its enormous population.

We can’t do what China did, which involved huge government subsidisation of raw materials to manufacturers and pricing subsidies for exporters. The world is a highly competitive place and countries thrive through finding the products and services the world needs and they can produce competitively and sustainably.

Benjamin Cockram
Via email

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.