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Government Allots R569m to Propel SA’s BPO Sector

The South African government has this financial year allocated R569 million to the global business services (GBS) sector, also known as business process outsourcing (BPO).

This is the word from Ebrahim Patel, minister in the Department of Trade, Industry and Competition, who added that government has invested more than R3 billion in the sector since 2016.

Patel this week addressed the annual Business Process Enabling South Africa (BPESA) GBS and BPO Conference and Alchemy Awards in Cape Town.

Host city Cape Town is among the most-established regions in the GBS/BPO sector, with over 59 000 related jobs, to date.

Patel noted the sector has played a pivotal role in job creation and economic expansion, and stressed the vital role of partnerships between government, the private sector and employees.

The next phase of the GBS sector focuses on expanding operations across provinces and towns, with emphasis on high-value services in information technology, finance, health, legal and retail, he said.

In addition, the sector is youth-focused, with 90% of employees being young people, and six out of 10 employees being women. “The face of the industry is female and young people, which fits in well with our national priorities.”

South Africa’s joblessness has escalated in recent years, and youth remain vulnerable in the labour market, with an unemployment rate higher than the national average.

The official unemployment rate was 32.9%, as at the first quarter of 2023, according to Statistics South Africa, with unemployed youth (15-34 years) at 46.5%.

The GBS/BPO industry, which is targeting 500 000 new jobs by 2030, has been pinned as the greenshoot that can alleviate the country’s unemployment.

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However, with the rise of generative artificial intelligence (AI), there is widespread worry surrounding its impact on jobs, as the industry across the globe increasingly incorporates AI-powered agents into their processes.

According to Patel, the sector will need to address the challenges of AI in consumer-servicing markets.

“We need to embrace new technologies, while recognising the opportunities and challenges.

“Artificial intelligence will impact on the customer service market both here and globally. We must recognise that – while it’s potentially very uncertain what the extent, speed, nature and impact will be – unquestionably, it’s going to impact on the market.

“AI may be used to automate repetitive tasks and AI may be used for personalised customer support…let’s recognise that the world will change. AI will also provide enhanced monitoring and analytics that will measure and improve customer care – there are many different areas that AI will impact.

“We should consider ways in which AI can complement and support the activities of trained and highly-motivated human beings. During this small window of opportunity – because AI is going to explode on us rapidly – before the full force of AI is unleashed in the customer service markets, the industry should consider what adjustments are required to this service offering.

“There will be a vital role for human beings for a number of years in this market, but think through how we blend technology and human skill.”

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