This article argues that skills development in South Africa must be aligned to the economic and political imperatives of reducing unemployment and poverty, while fostering growth and international competitiveness. The legacy of a resource-based economy, overlaid by apartheid policies, has resulted in widespread poverty, inequality and unemployment existing alongside globally competitive industries. It is therefore necessary to foster employment through the provision of basic needs such as infrastructure, healthcare and education to the poor. At the same time, linkages within the domestic economy should be deepened to broaden economic participation and international competitiveness should be actively promoted to enhance exports. This analysis points to the need for a dual development trajectory. The first level requires a high skill production trajectory to support the ongoing expansion of high-value traded goods and services. The second level requires the expansion of low productivity, non-traded goods and services to redress unemployment, and must be underpinned by the provision of low and intermediate skills.