Accelerating%20Growth%20and%20Development:

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• Accelerating Growth and Development
• The Contribution of an Integrated Manufacturing
  Strategy

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OUTLINE

• Process issues
• A vision for the economy
• Extending a policy tradition
• Analysis informing the strategy
• The challenge
• Governments response
• The role of the Integrated Manufacturing Strategy
• The platform of Microeconomic Reform
• What can you expect from the dti?
• A challenge to stakeholders
• Measuring our performance
• The way forward

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Process issues
Parliament, Nedlac, other dialogues
Extensive consultations and dialogue
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A Vision for the economy by 2014

• We need an economy that can meet the needs of our
  economic citizens in a sustainable way
• Access to quality work and enterprise
  opportunities necessary capacities and skills
• Platform of economic efficiency, inputs,
  infrastructure, government service etc.
• Adaptive, innovative competitive enterprises
• Consumer access to quality goods services
  effective protection legislation and recourse
  mechanisms
• Built on the potential of all our people,
  resources and geographic areas

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Extending our policy tradition

• A vision beginning with the Freedom Charter
• RDP objectives
• GEAR programme
• Geographic strategies
• Integrated Economic Action Plan
• Microeconomic Reform Strategy

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AnalysisPolicy and manufacturing before 1994

• Resource-oriented, especially minerals, energy
  and agriculture
• Industrial Policy import-substitution,
  resource-driven
• Apartheid policy legacy included
• racial and geographic inequalities
• distorted demand
• restricted skills development
• Inefficiencies
• inward-orientation, with poor linkages to the
  region and the world
• restricted access to economic assets
  opportunities -gt limited capacity for savings,
  investment and enterprise development.

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AnalysisThe challenge faced in 1994

• Interventions required to address both domestic
  conditions and integration into the global
  economy
• Trends in the domestic economy
• Diverse manufacturing base
• Continued inward-orientation
• Concentration of ownership lack of equity
• Global trends
• Liberalisation and acceleration of global capital
  flows
• Selective trade liberalisation
• Systems of global governance with unfair outcomes
• Dangers of marginalisation

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AnalysisPolicy interventions since 1994

• Macroeconomic reform to address crises
• Initial set of microeconomic reform measures
• Trade reform tariff simplification and trade
  negotiations (multilateral free trade
  agreements)
• Supply-side measures
• Small business
• Competition policy
• Regulatory reform
• Institutional transformation
• Some sector-specific programmes
• Geographic programmes e.g. SDIs
• Some consumer protection reform
• Wider reforms
• Labour law dispensation and skills development
• Agriculture and land reform
• Development of a consultative approach

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AnalysisManufacturing performance since 1994

• Some progress made
• Slow growth, but avoided deindustrialisation
• Increased export orientation and integration into
  global markets
• Increased share of manufacturing in exports
• Some sectors doing particularly well e.g. auto
• Improved opportunities for market access
• Diversification of markets reduced vulnerability
• Increased productivity

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AnalysisManufacturing performance since 1994

• But
• Declining share of global trade
• Trade balance still net importer of manufactured
  goods
• Continued job losses within manufacturing
• Casualisation, subcontracting informalisation
• Particular decrease in demand for unskilled
  labour, increase in skilled labour demand
• Productive investment too low
• Declining investment in technology RD
• Limited progress in relation to small business
  development, BEE and geographic equity
• Poverty and inequality still severe
• Continued geographical inequality
• Underlying constraints to future competitiveness
  and equity e.g. inputs, telecomms infrastructure
  requisite skills

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AnalysisOld ways of gaining competitiveness
will not work in future

• Raw materials
• Unskilled labour
• Proprietary production technology
• Privileged access to markets

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AnalysisNew sources of competitiveness

• Information and Communication Technologies
• Technology diffusion
• Time, efficiency and responsiveness
• Integration of value chains
• Economic participation and equity developing
  human and economic potential

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The challenge we face

• We face numerous constraints
• distortions in our domestic economy
• our relationship to the global economy
• the changing basis of competitiveness away from
  our previous areas of advantage
• We need to develop our domestic potential by
  strategically engaging with the global economy
• Minimise marginalisation
• Maximise our use of opportunities to achieve
  national objectives

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Governments response to the challenge
Enable competitive, adaptive
job-creating sectors enterprises
Integrated Manufacturing Strategy
Platform of efficiency reduced constraints to
growth development across the economy
Microeconomic Reform Strategy
Sustainable Growth-oriented Macroeconomic
Framework
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The foundation provided by the Microeconomic
Reform Strategy

• Coordinated action across government on issues
  beyond the authority of any single department
• Improve efficiency of the economy as a whole and
  reduce barriers to entry
• Key performance areas
• growth
• competitiveness
• employment
• small business development
• BEE
• geographic equity

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The foundation provided by the Microeconomic
Reform Strategy (2)

• Key programmes
• Input sectors (telecomms, energy, transport)
  efficiency and access
• Cross-cutters infrastructure, HRD, access to
  finance, technology innovation
• Priority sectors agriculture, tourism, ICTs,
  cultural, exports (auto, clothing textiles,
  metals beneficiated minerals, agro-processing,
  chemicals)

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Objective of the Integrated Manufacturing Strategy

• Accelerate growth, employment and equity through
  developing high value adding, knowledge-intensive
  integrated manufacturing built on our full
  potential
• HOW?
• Address constraints in the domestic economy to
  create a platform for competitiveness and
  economic participation
• Integrate to our advantage into the global
  economy
• Equip our enterprises to compete on the basis of
  new drivers of competitiveness
• Integrate equity objectives into each aspect of
  the strategy
• Build partnerships and cooperation between
  economic stakeholders

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What is the IMS? (1)

• A vision for the growth path of manufacturing
• A series of interventions by government to help
  achieve that vision
• A call to action for all economic stakeholders

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What is the IMS? (2)

• A strategy for manufacturing in the wider sense
  including all activities associated with the
  production of goods
• Uses the conceptual tool of integrated value
  matrices to understand production and how best to
  intervene effectively

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Integrated Value Matrices Leather
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Value matrices interconnections Auto
Components
Chemicals/Plastics e.g. bumpers, trim
Textiles/Synthetics, natural fibres e.g.
environmentally sound interior trim
ICT
Automotive Sector 5 of GDP
Finance e.g vehicle finance
Metals/carbon steel, aluminium, stainless,
magnesium
Engineering services
10 steel industry output consumed by auto
Agro /leather e.g. leather seats
Suppliers of consumables
Leather seats 16 of component exports
Design
Tool Die Making
Estimated impact on GDP 8
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What is the IMS? (3)

• Integrated action with regard to
• Market access
• Beneficiation and value addition
• Equity and economic participation
• Regional production
• Knowledge intensity and services integration
• Development of integrated value matrices

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What can you expect from the dti?

• Championing competitiveness within government in
  a way that supports equity
• Packages of customised services and products in
  prioritised sectors, developed in partnership
  with stakeholders
• More accessible and efficient broad-based
  services across the economy, to provide a
  platform for efficiency and equity

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What can you expect from the dti?Championing
Competitiveness

• Leadership role in the economic employment
  cluster
• Provision of valid and reliable information on
  the economy to economic actors

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What can you expect from the dti?Customised
Services

• Developed in partnership will stakeholders in
  high potential sectors cross-functional
  programmes, initially for
• clothing textiles
• agro-processing
• metals minerals
• tourism
• auto transport
• crafts
• chemical biotech
• knowledge-intensive services ICT
• For each sector, there will be a process of
  analysis, strategy development and action
• Also customised programmes for value matrix
  enablers HRD, technology, infrastructure
  logistics

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What can you expect from the dti?Broad-based
services

• Services to address more generic issues critical
  to the development of the economy as a whole
• Increased relevance, accessibility and efficiency
• In addition to high volume services provided,
  will be specific programmes for
• Market access
• Regulatory environment
• Investment
• Access to finance
• Policy coherence

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A challenge for all stakeholdersPartnerships
for growth development

• Necessary partnerships
• within government both vertically (national,
  provincial, local) horizontally
  (interdepartmental) their agencies
• within the dti group of institutions
• between economic actors at all levels in the
  economy
• bringing in previously excluded voices
• Parliament
• knowledge networks

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A challenge for all stakeholdersPartnerships
for growth development

• Purpose of partnerships
• Developing a common economic vision
• Information sharing within and between
  stakeholder groups developing a common
  understanding of trends and drivers in the
  economy
• Building partnerships for strategy development
  and action at all levels in the economy,
  including wider stakeholder representation
• Developing new ways of thinking and working

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Measuring our performance

• Developing our understanding of the key drivers
  in the economy
• Developing appropriate indicators to measure and
  evaluate
• efficiency
• outputs
• impact in relation to our objectives
• Benchmarking our relative performance and
  competitiveness, and best-practice of other
• DTI-equivalents
• Reviewing progress in partnership with
  stakeholders

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The way forward

• Taking up the opportunity presented to us
• Moving from dialogue to collective action
• Securing the long-term sustainability of growth,
  employment and equity in our economy