It is axiomatic to state that business models, across all sectors of the economy, are being fundamentally disrupted. The structural effects are clear to see, from the pervasive use of exponential technologies to smart machines, artificial intelligence, shifting demographics, increased market transparency, seemingly limitless individual choices and consumer sophistication.

Faced with all this, one of the key challenges is to unlock value by finding the right balance of technology, talent and human connection. High levels of graduate unemployment are a sure sign that this balance remains out of kilter. Current and future participants in the labour market must possess skills that are in demand. They must also have an appetite and inclination to learn new skills, to become and stay employable in a meaningful and sustained manner throughout their careers.

Helping the workforce adapt to this changing world of work is the defining labour-market challenge of our time. Given the enormous responsibility that higher education carries in this context, responsible and responsive leadership is required from academic leaders and their institutions to build an enduring link between skills development, employability and enterprise development.

Preparing students with a set of disciplinary skills in a particular degree course is inadequate in this context.

Besides bold and dynamic workforce development — particularly in SA, where there is an alarming increase in the gap between the “haves” and “have-nots” — we need to find meaningful skills and enterprise development solutions to draw in those who are not participating in the economy fully.

There is a serious mismatch between what employers are seeking in candidates — besides their qualifications — and the skills candidates possess. Many students who have completed their education are unable to get jobs; improving the supply of educated people for employability involves more than just the creation of paper qualifications.

Workplace needs must be aligned with higher-education preparation systems to promote student success in a career after graduation. There should not simply be a focus on traditional academic achievements or grades. Attending a higher education institution and becoming career ready requires more from students than simply good academic performance.

Student employability is high on the agenda of higher education institutions, and yet they have been criticised for not adequately developing the necessary skills in students. Employers want graduates with knowledge, intellect, a willingness to learn, self-management skills, good communication and interpersonal capabilities, and the ability to be a team player.

Complementary skills

As institutions seek to improve graduate employability, they are at the same time placing importance on developing the next generation of entrepreneurs. While the debate continues about the efficacy of entrepreneurship education, literature has acknowledged employability and entrepreneurialism as complementary skills. In a competitive job market, the importance of an entrepreneurial spirit, flexibility and an eagerness to achieve results cannot be overstressed.

However, the way to best encourage entrepreneurialism as well as employability in students is still being debated, and linkages between specific aspects of the two have not yet been fully identified.

Generally, employability can be defined as “a set of skills, knowledge and personal attributes that make people more likely to be successful in their chosen occupation, to the benefit of themselves, the workforce and the economy”. This supply-side definition of employability has been expanded upon in some employment policy literature to include external, demand-side, aspects such as labour market conditions.

While there is a theoretical working definition of employability, it must be acknowledged that an employer’s choices when hiring a person are influenced by more than these factors. Perceptions of potential employees with the same qualifications vary depending on employers’ traditions, social biases and even nepotism, all of which may influence hiring more than qualifications do.

Education therefore acts as an indicator of abilities and skills. People invest in education to signal to employers that they possess the requisite skills, which lessens the perception of risk during the hiring process. In this context, education is a proxy for ability, rather than a process through which ability is developed. As a result, education provides the opportunity for students to gain marketable skills and increase their job-relevant abilities.

Soft skills

A recent employer survey reveals that graduates entering the workforce are expected to have developed both the competencies encapsulated in their degree programme and a range of soft skills, such as team-working, communication, critical thinking, problem solving and leadership.

Another priority of higher education is to develop graduates who will become entrepreneurs. Development of entrepreneurship as an academic subject has grown considerably since the turn of the century, which has ushered in changes in employment structure. Economic realities such as downsizing, labour-force shifts and restructuring mean that the path from higher education to sustainable employment is less direct than before.

Graduates armed only with employment skills may not be adequately equipped to take on a shifting world in which entrepreneurial start-ups are considered a key factor of modern economic growth.

Entrepreneurship is defined as the application of creative ideas and innovations to practical situations. This is a generic concept that can be applied across all areas of education.

Entrepreneurship education is concerned with supporting learners to develop a skills set that enables them to look beyond their disciplinary expertise, identify connections across commerce and culture and pursue unique and innovative opportunities effectively. Such skills are applicable to any employment situation or sector.

Research has shown that enterprising students and graduates are regarded as more employable than those without enterprise skills. Since many of the enterprise skills can be regarded as entrepreneurial behaviours, this would suggest that students with a stronger entrepreneurial spirit would be more enterprising, more employable, and consequently more likely to obtain higher-level graduate work.

We need to create a framework that brings alignment between supply and demand — a national framework and infrastructure for skills development. This framework should allow real-time interface between the demand and supply sides of the labour markets to not only enable better matching but also allow earlier changes to curriculum, job descriptions, job posting and assessments.

The solution to unemployment lies, to a large extent, in the creation of institutions that innovate at the intersection of the 3Es: education, employability and entrepreneurship.

Policymakers, parents, employers and students want something that is part-higher education, part-skills centre and part-employment exchange. Like all innovations, creating such an institution is difficult, takes time and needs resources.

Resistance to these ideas will be strong. The desire for protectionism and conformity with familiar norms will cause tensions. Educational institutions, therefore, require brave leaders with bold ideas. Leaders must ensure the link between education, employability and entrepreneurship is stronger than ever.

Shaikh is MD of Regent Business School