Durban is battling to attract and retain people with critical skills that are needed to propel its economy to great heights.

This is the sentiment expressed by business leaders and academics after it was revealed at a recent Durban Chamber of Commerce and Industry event that hundreds of mid-size businesses in the city have closed down.

Gary Nagoor, CFO of the Royal Tyres Group, said as his company tries to introduce artificial intelligence (AI) into its operations, it has struggled to find people with the required skills.

Ebrahim Asmal, head of the Department of Information Technology, in the faculty of Accounting and Informatics at the Durban University of Technology, noted that Durban faces challenges in attracting top talent, particularly in scarce skills within the Fourth Industrial Revolution (4IR) space, such as AI, machine learning and robotics.

“The city has a growing start-up ecosystem, with innovation hubs attracting entrepreneurs and innovators. The Durban tech sector is growing, but its size is relatively smaller compared to Cape Town and Johannesburg. Most large corporate companies have their head offices in Johannesburg.

“To be competitive both nationally and globally, Durban needs to grow its economy. Investment in digital infrastructure is essential. Upgrading internet connectivity, attracting large companies to open data centres, and developing other digital infrastructure to support tech businesses are crucial steps.

“To attract and retain top talent, Durban should focus on developing a comprehensive ecosystem that addresses these factors, rather than relying solely on salary incentives,” he said.

Nagoor said talent is scarce in Durban.

“We have been finding it very difficult to recruit, candidates prefer Johannesburg or Cape Town simply because the quality of life there is better… “There is a lot that needs to be done from a governmental perspective, from a safety perspective, and from an infrastructure perspective so that we can draw the right talent… but we remain hopeful.

"Keeping them will be a challenge for the municipality to create the right environment because even though you have money, you cannot buy the right beach or safety; these things have to be provided,” he said.

Dr Ntokozo Nzimande, a research associate in the Macroeconomics Research Unit at the University of KwaZulu-Natal who has worked on compiling the Durban Business Confidence Index, said the issue is largely the size of the economies of these cities.

“If you look at the number of people moving from KZN to Johannesburg and Cape Town, you can see that it is not just a skills issue; we might have the skills, but we do not have the economy that is capable of absorbing these skills.”

He emphasised that introducing AI skills is crucial for boosting productivity and economic growth.

“When we engage with companies, they always highlight that labour costs are very high; this is one of the issues that prevent the employment of more people. With the introduction of AI skills, employees could become more productive, generate more revenue for the company, which could, in turn, lead to the creation of more jobs.”

The concerns about skills mirror those raised by the City in a report released a few years ago which forecast that talent could leave the city for other provinces.

The report outlined the challenges faced by the city and ways to overcome them. In one of the scenarios, which previews a hypothetical situation where the city fails to act to address the challenges, it states that eThekwini will be overlooked as a key investment destination due to poor customer orientation and government inefficiency, which hampers business development.

“Durban will experience a more severe loss of talent as the tech sector migrates to Cape Town, while skilled workers move to Johannesburg, Cape Town and Gqeberha. Social unrest will occur more frequently, with growing racial tension... This will lead to higher crime rates, reduced foreign direct investment and tourism, resulting in further contraction of the local economy,” it said.

THE MERCURY