Minister Ebrahim Patel and Microsoft SA managing director Kalane Rampai at the signing of a R1.32 billion investment by Microsoft to be deployed in the development of black-owned small businesses operating on the technology and non-technology sectors. Patel was joined by acting director-general Malebo Mabitje-Thompson and President of Microsoft Africa, Lillian Barnard (standing left to right) Photo: Supplied.
Microsoft South Africa will come to the rescue thousands of unemployed youth with a R1.32 billion investment for the development of black-owned SMMEs in both tech and non-tech sectors over the next 10 years in a bid to close the digital skills gap.
The global tech giant yesterday said the investment makes provision for skills development of young black South Africans in emerging technologies, and includes a commitment to research and development to prepare South African industries for the fourth industrial revolution (4IR).
The R1.3bn Microsoft deal is the largest by a single company under the Equity Equivalent Investment Programme (EEIP) provisions of the Broad-Based Black Economic Empowerment Act (B-BBEE Act), and brings the total value of agreements concluded during this administration to more than R8.2bn.
Microsoft SA managing director Kalane Rampai said technology in South Africa was going to be a major driver of growth in part because of the opportunities and the potential that it unlocks in every aspect of life.
“We have identified a number of key initiatives. The first one is about the digital transformation SMMEs. And we know the role that SMMEs are playing in terms of creating economic activity and creating jobs. We intend to equip 200 SMMEs and over 2 000 individuals with advanced AI and other capabilities to not only narrow the current skills gap, but also prepare them for jobs of the future,” Rampai said.
“We also want to support about 20 advanced research and development projects in South Africa to address the current and future policies of the country, in areas such as cybersecurity and digital intelligence.”
In terms of the agreement, Microsoft will allocate an estimated R663 million to enterprise development initiatives, with a portion focused on technology start-ups and development of new solutions in disruptive technologies.
An estimated R347m for skills development initiatives will focus on providing intensive training to young black South Africans through 8 – 12 month certification courses and learnerships which will see about 1 000 beneficiaries accredited with certifications in emerging technologies, like AI and data analytics.
An R&D initiative will be allocated around R160m, including a R50m investment which will be spent in consultation with the Localisation Support Fund to introduce emerging technologies into industrialisation and localisation initiatives.
Provision is also made for funding for marketing and administrative support that Microsoft will put in place, to ensure a well-administered programme with significant impact.
South Africa, like many countries globally, grapples with the challenge of youth unemployment.
This is supported by statistics indicating a 45.5% unemployment rate among young individuals (aged 15-34 years) as the total number of unemployed youth increased by 236 000 to 4.9 million, in contrast to the national average of 32.9% in the first quarter of 2024.
According to Statistics South Africa, a person’s chances of landing and keeping a job are also greatly influenced by their level of education.
Rampai said businesses needed to make sure that SMMEs were sustainable in order to increase employment by 6% year-on-year.
“We know that there are several challenges that are still standing in their way for their survival. Things like infrastructure connectivity, access to business enablement tools, access to finance and digital skills are all these potential standing blocks that are making it a little bit difficult,” he said.
“So we believe that technology is a key enabler for sustainable success, but it is also critical to have the right operations, the right blueprint for capability, and the right kind of business action.”
The Minister of Trade, Industry and Competition, Ebrahim Patel, said the government has built a network of more than 1 700 black-owned and controlled industrial champions since the Black Industrialist Programme started eight years ago.
“The fund will assist black South Africans in non-tech sectors to harness the power of technology and improve their competitiveness and ability to innovate and expand their operations,” Patel said.
“It will also act as a bridge to enable young people to get training, certification and job-placement, so that talented South Africans gain access to the opportunities that arise from an increasingly digitalised world.”
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