A new industrial strategy shows Gauteng’s future lies in hi-tech industries, reports Charlene Smith
GAUTENG has no hope of achieving the 6% growth target set out in the government’s growth, employment and redistribution (Gear) strategy if it continues on its present course, according to a study commissioned by the Gauteng Economics Department.
The year-long study forms the basis of a Gauteng industrial strategy that will be released in two weeks’ time, says Economics MEC Jabu Moleketi. It charts a new direction for business, industry and trade in the province.
The research shows urgent measures must be taken to overcome a reliance on mining and the province’s old ways of doing business.
And if Gauteng, which generates 40% of gross domestic product, is sending out early warning signals now, the whole country had better take stock. Already this week DRI/McGraw Hill, part of the Standard & Poor’s rating group, ranked South Africa the riskiest out of 10 emerging markets. And then the gold price collapsed.
The Gauteng industrial strategy is the first of its kind in the nation’s history and is likely to pave the way for similar regional economic surveys that will feed into national economic strategic planning – to take Gear off the conference tables and into the workplace.
The research backing the strategy shows that between 1985 and 1990 the Gauteng economy grew by an average of 1,6% per annum while employment opportunities almost stagnated at 0,1%. On its present path, the Gauteng economy will grow at 3,2% between 1996 and 2002, increasing job opportunities by 2,3% – or only 540 000 jobs (in a province that has close to 200 000 school leavers a year and the highest crime rate in South Africa).
It goes without saying that such “growth” will not be adequate to address either unemployment or a decline in living standards. “The only future for this country is growth of 6% or more; anything less than that is a crisis,” Moleketi warns.
Policy researchers contracted to the Department of Trade and Industry, Gauteng Economics Department and private-sector economic research units split the study into three indices examining trade, the industrial sector and foreign direct investment. The trade-indexing study ranks provincial exports by volume, value, destination and origin.
The industrial-sector indexing study ranks provincial sectors by growth, employment and productivity, to reveal the performance and composition of the private sector economy and manufacturing sector.
A foreign direct investment indexing study lists the sectors in Gauteng most likely to attract direct foreign investment, the most economically competitive products within those sectors and the countries most likely to invest.
The research sketches a fascinating picture of a region that was already shedding its reliance on mining long before this week’s devastating slump in the gold price. Gauteng is readying itself to become the hi-tech, information technology and telecommunications hub of South Africa and the continent and Moleketi is intent on pushing this.
Contradicting some researchers who have said Gauteng must fight to keep big industries in the region, Moleketi says research shows “our future lies in high volume, hi-tech, financial services and becoming a smart centre.