Challenges & opportunities emerging from the tertiary sector crisis in South Africa

Universities in SA are in a perilous state right now, owing to chronic under-funding and increasing pressure by students for universally free tertiary education (#FeesMustFall), among other reasons.

I have done a back-of-an-envelope analysis of what the crisis may mean strategically for entities operating in the life science and biomedical space in the country; making my observations from being involved in running a non-profit ‘omics’ service provider (CPGR), a biomedical company (Artisan Biomed), and a startup accelerator program.

Disruptive trends I perceive right now are as follows:

1.      Current and future funding constraints force tertiary institutions into austerity measures. This will lead to reductions in support and administrative staff as well as long-term capacity development;

2.      Human resources will be shed from the tertiary system and not replaced, leading to a decrease in administrative, research and teaching capacity;

3.      Owing to a lack of financial resources and other factors, vacancies will be filled with lower quality human talent – or not at all. This will initially create a larger pool of quality human resources who won’t have access to the tertiary sector (i.e. they will have to seek alternative employment opportunities). These can be absorbed by the private sector or may be lost to overseas opportunities (less so to unemployment, considering the relatively higher rate of mobility of these human resources);

4.      The outputs produced by tertiary institutions will decline in value, leading to lower grant funding income and a growing pool of graduates who will be less employable than they are already today. We already observe a decline in job-readiness with graduates when it comes to advanced but also to very basic skills (e.g. pipetting, performing simple calculations, problem solving), the effect of which is that the corresponding individuals will miss employment opportunities (locally and elsewhere). This is due to a lack of molecular biology and laboratory training at Universities but also a lack of basic analytical and mathematical skills;

5.      Certificates, Diplomas and PhD degrees will lose value, for current, past and future graduates. Therefore, incentives on behalf of students for investing time, energy and money into tertiary institutions will decrease, leading to further depreciation of ‘tertiary sector stock’ and loss of investment opportunities (in the form of student fees or time, and, donor funding);

6.      Over time, the pool of employable talent will decline. This is and will be exacerbated by the Department of Home Affair’s ongoing efforts to keep skilled resources from outside the country from entering the job market. Collectively, this will hamper or stop efforts to build a viable knowledge economy and life science eco-system;

7.      In order to attract or retain talent, tertiary institutions will have to shift to competitive remuneration models, applicable to local and international talent (notwithstanding the Dpt of Home Affairs’ attempts to keep them out). This will put more strain on austerity budgets, lead to issues of inequality and/or prevent the institutions from making appointments (-> return to point 3);

8.      Publicly funded academics working in technology intensive areas (Genomics, Proteomics, Precision Medicine, and the like) will have growing difficulties to carry out their work in SA, leading to a decline in research activity and outputs and/or loss of opportunity to offshore collaborators. This will go hand-in-hand with more demand for free-of-charge or reduced-price services, negatively impacting the life-science / biotech supplier ecosystem.  

In the following, I am highlighting opportunities that I believe (will) emerge in the (near) future:

1.      The need for good quality training and education in (South) Africa will persist and actually grow. There will be an increasing number of graduates whose certificates will qualify them decreasingly less for academic as well as private sector jobs (except at tertiary institutions that continue to exist despite low-quality output generation – perhaps owing to certain state funding opportunities). This will add to frustrations that already exist and will further fuel civil unrest. Graduates will have to be trained post-graduation to enhance their employability;      

2.      Therefore, there will be an opportunity for private sector training and education programs and offerings. Only a fraction of graduates will be able to afford post-grad training (but companies who may want to employ them may be willing to pay);

3.      Increasingly, there will be a need and opportunity for full-scale private sector tertiary education to replace the current tertiary sector model (think https://www.curro.co.za/ for postgrads and perhaps https://www.aims.ac.za/);

4.      Non-tertiary organizations (including private companies) will initially be presented with a surge in available human resources. These will have to be retained by offering competitive remuneration / reward schemes on the long-term. In the short-term, an increase in human resource supply may have positive effects on employers (due to a lower bargaining power on behalf of job-seekers);

5.      In view of the decline in funding for academia and life science/biomedical research, opportunities for collaborative ('risk sharing') research & development partnerships may increase because local scientists’ bargaining power will decline. There will be more opportunity to shape attractive deals for/with biotech and pharma companies. However, this will be counterbalanced by an increasing need and desire by researchers to work with academic partners internationally who have access to funding and other resources. A negative effect of this will be that more work will be outsourced to offshore parties, leading to possible clashes with SA laws and regulations (eg laws that aim at keeping biological samples in the country). This may lead to stalemate situations where scientific progress stalls for lengthy periods of time;

6.      Companies will benefit from a pool of more mobile and less risk-averse individuals who will be forced out of the tertiary sector and will be more inclined to embark on entrepreneurial ventures. This will fuel innovation-centric initiatives (such as the CPGR’s accelerator program);

8.      In view of a declining SA tertiary sector, there will also be opportunities for academic, non-profit and private training & research organizations in South Africa as well as in the rest of Africa. These may present work opportunities for individuals shed by the SA tertiary sector as well as for graduates from other African countries who will not find, or won’t be allowed to, work in SA. Companies and institutions active in the training & education space in SA will be able to capitalize on this;

9.      There is perhaps an opportunity to build an African ‘Biomedical Institute of Technology’ (or, something like it) to harness opportunities across the continent while balancing / overcoming issues present in any individual country. AIMS (African Institute of Mathematical Sciences) may serve as a template for this.