Transcript SA Economic Goals

LOCAL ECONOMIC DEVELOPMENT
COMPETITIVENESS THROUGH
THROUGH SYSTEMIC COMPETITIVENESS
Presentation to the Mayors Conference
With Provincial and Local Government
by
the dti
If the following are present, we should be
able to conclude that the local economy is
relatively competitive:
• Jobs are created (particularly high skillhigh income jobs)
• Production evolve toward environmentally
benign goods and services.
• Production concentrated in goods and
services with desirable characteristics, such
as a high income elasticity of demand.
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• An environment is conducive to a dynamic set of
small- and medium- sized firms.
• Adequate access to capital and to finance.
• Attractive industrial sites and office spaces.
• A supportive regulatory environment.
• Effective government.
• Effective linkages between the public and private
sectors.
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Characteristics of Local
Economic Competitiveness.
• The rate of economic growth should be
appropriate, so that full employment is achieved
without generating the negative aspects of over
stressed markets.
• Municipalities should specialize in activities
which will enable it to gain control over its
future, that is to choose among alternative
futures, rather than passively accepting its lot.
• They should be able to enhance their position in
the global space.
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Building Global Municipalities:
• Global municipalities have the following
characteristics
– Extensive linkages to the rest of the
world.
– A high skill labor force.
– A highly educated labor force.
– A full selection of business and
professional services.
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– A superior transportation and
communication infrastructure.
– A complex of research institutions
appropriate to the city's competitive
advantage.
– Large continentally- or
internationally-engaged firms
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Model for measuring competitiveness
• Local Competitiveness = ƒ( economic
determinants + strategic determinants)
Where,
– Economic determinants =
• factors of production +
• infrastructure +
• location +
• economic structure +
• urban amenities
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• Strategic determinants =
– governmental effectiveness +
– Urban and rural strategy +
– public-private sector
cooperation +
– institutional flexibility
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Municipalities international
competitiveness is quite different from
the concept of an "international city."
•
“international city” -the degree to which
a city is in fact "international" in its
connections with the rest of the world
economy and with designing strategies to
enhance that internationality.
• a municipality may increase its
competitiveness without increasing the
degree to which it is an international city.
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What an LED Plan must addressindicative “credible” LED Planning
Requirements
• Factors of production
– % skilled of labor force
– availability of industrial sites and
office spaces
– access to (venture) capital
– Infrastructure
– transportation:
• adequacy of air, road, rail, and
bridge linkages
– Communication
– cost and availability of various
services
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– research facilities:
• quantity and quality of
universities and research
laboratories
• number of scientists
• linkages between research
entities both within the region
and with other regions, and
internationally
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Location
• relation to market
• center-periphery position
• impact of technological
change on center-peripheral
position
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Strategic determinants: qualitative data
•
Governmental effectiveness
– active leadership role
– clear lines of responsibility and mandates
•
Urban and rural strategy
– how specific and well thought out
– how actively pursued
•
Public-Private sector cooperation
– operational linkages between city and private
sector
– coordination of each sector
•
Institutional flexibility
– regulatory environment
– openness of decision-making to change
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What the dti will do
In partnership with the dplg, salga and the
city network, we will:
1. Development of comprehensive Regional
Industrial Development Strategy with the
following key regional support measures:
a) formulate their industrial road maps,
b) form their local growth coalitions and
c) Develop integrated regional indicative
local growth plan.
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WHAT INFORMS THE RIDS/
THE PRODUCTS SPACE
Metropolitan cores
Metropolitan fringe areas
Major towns
Other significant towns
High-intensity agric./ mixed use
Mining & energy complexes
Medium-intensity agriculture
Game reserves & related tourism
Arid/low-intensity agriculture
.
Tourism &
mining
Tourism &
fruit export
Well-linked 2nd economy areas
Deep rural 2nd economy areas
Coal &
energyintensive
manufacturing
Fruit,
tourism,
forestry
& furniture
200km
100km
Automobile
manufacturing
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WHAT INFORMS RIDS /
Sectoral performance by provinces
Growth in GGVA at Constant 2000 Prices
(2000 to 2004)
12%
10%
Western Cape
Eastern Cape
6%
Northern Cape
4%
Free State
Kw azulu Natal
2%
Gauteng
-8%
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9 Community,
social and
8 Finance, real
estate and
7 Transport
and
6 Trade
(Wholesale,
5 Construction
-6%
4 Electricity
and water
-4%
3
Manufacturing
-2%
2 Mining and
quarrying
0%
1 Agriculture,
forestry and
Average Annual % Change
8%
North West
Mpumalanga
Limpopo
LOCAL GOVERNMENT
COMPETITIVENESS CHALLENGES
– Underdeveloped physical and social
infrastructure
– Uni-sectoral / economic dependency / lack
of diversification
– Go-it-alone syndrome
– Uncompetitive industrial base
– Industrial concentrations
– Widespread economic decline, particularly
in small towns (former mining towns)
– Access to industrial finance
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Our value proposition…
CRITERION
TRADITIONAL
APPROACH
VALUE PROPOSITION
CONCEPTUAL BASIS
Key factors
Regional attributes i.e.
production costs &
availability of workers
Regional capabilities i.e.
innovative milieu, clusters &
industrial networks
POLICY
CHARACTERISTICS
Aims
Objectives
Equity or efficiency
Employment creation &
increased investment
Geo-spatial equity, efficiency
and capabilities
Increased Competitiveness
& employment creation
KEY INSTRUMENTS
Incentive schemes,
business aid &hard
infrastructure
Local growth coalitions,
regional road maps,
business environment & soft
infrastructure
POLICY STRUCTURE
Spatial focus
Analytical Base
Problem areas
Designation indicators &
Regional exporting
All regions
Regional SWOT analysis
EVALUATION
Outcomes
Measurable
Growths and jobs
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OTHER REGIONAL INDUSTRIAL
DEVELOPMENT SUPPORT
MEASURES
• Policy framework for scaling up catalytic
projects e.g. IDZs, SDIs
• Comprehensive rollout of the Apex Fund
• Transformation of Khula to a direct landing
agency
• Comprehensive Rollout of SEDA to all
provinces and district
• Alignment of investment promotion
strategies
• Align our incentives to spatial imperatives
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THANK YOU
RAY NGCOBO