Research on the Performance of the Manufacturing Sector

Western Cape

Provincial Growth & Development Strategy

Overview of Strategy

The Western Cape has formulated its economic development strategies based on the priorities listed in the:

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  The Accelerated and Shared Growth Initiative of South Africa (ASGISA)
  
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  The National Growth and Development Strategy (NGDS)
  
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  The Presidential Apex Priorities
  
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  The iKapa Elihlumayo Economic Development Strategy.
  

Implementation and incorporation of these strategic points in relation to the manufacturing sector will be done via the Micro – Economic Development Strategy (MEDS), a provincial industrial development policy framework that seeks to limit the impact of government failure, market failure and network failure in the Western Cape economy. The overall objective of MEDS is to ensure that provincial government markets and networks are properly aligned. A key focus of MEDS is to identify interventions that will accelerate economic and employment growth to strengthen the economic foundations of the Western Cape.

Provincial Government has identified or earmarked the following manufacturing subsectors for development interventions.

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  Textile and clothing
  
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  Boat Building
  
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  Green Technologies
  
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  Metals
  
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  Furniture
  

The MEDS framework seeks to enhance Growth/Participation and Competitiveness through various policy frameworks and strategies which include the Western Cape strategy for SMME support and special development.

Focus on Manufacturing

The Western Cape Strategic plan to stimulate the manufacturing sector intends to refer to policy mandates and in particular the National Integrated Manufacturing Strategy (NIMS) which is aimed at bringing together all role-players (Government; Industry leaders etc) in the sector to collectively ensure that there is sustainable growth and development. Another policy that the Western Cape government plans to draw from is the Advanced Manufacturing and Technological Strategy (AMTS) which focuses on sector based initiatives to advance the technological equipment and modern methods to manufacturing in order to stimulate declining industries such as Metal Pressing and the Automotive sector which has contributed largely to the Western Cape’s manufacturing sector recording double digit decline. The Textile sector requires re-stimulation in terms of a policy review on imports (China in particular), as well as technological advancement, as the textile subsector has the potential to stimulate job creation. The skills set for the textile industry is available due to the recent decline in this sector, resulting in large textile and clothing factories closing down.

The Agro processing industry is also an industry that the Western Cape provincial government has targeted to create employment in relation to wine making, as well as processed foods (jams, dried fruits etc). The boat building industry is one of the industries that were never formally targeted in the past, however since it emerged that this is a R2 Billion industry, it warrants focus on it to become a key driver of economic development.

Green Technologies is another industry that the Western Cape government plans to invest in, develop and grow, as this industry can assist in solving other –non-economic goals of the province, such as bio energy solutions and solar heating. Solar geysers are already being used in other provinces through government housing initiatives.

SMME Support and Development

Incorporated in the Western Cape integrated development plan (five year strategic plan) is the formulation of an SMME support base using the MEDS approach, guided by an oversight committee of industrial experts to enhance strategic insights into opportunities and constraints.

A key priority by Western Cape government, with the assistance of sector role-players (Public and Private) is to create an environment which supports SMMEs through development programmes and interventions to ultimately stimulate growth with the purpose of job creation.

The strategy seeks to support SMMEs by identifying and addressing challenges and constraints faced by SMMEs such as:

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  Low access to competent mentors.
  
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  Low numbers of procurement opportunities.
  
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  Lack of programmes that stimulate the SMME Sector (implementation of national strategies).
  
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  Low number of partnerships between SMME sector and Public – Private Entities.
  
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  Difficult access to funding.
  
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  Low access to business support initiatives.
  

The micro economic development strategy identifies the SMME sector as critical “creators” of economic opportunities and employment.

Municipal Growth and Development Strategy

The City of Cape Town (CoCT) Growth and Development Strategy

Strategy Overview

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  The City of Cape Town is to promote infrastructure-led economic growth that will create economic growth and employment opportunities.
  
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  In line with the Western Cape Provincial Growth and Development Strategy (WCPGDS) the CoCT seeks to achieve its economic development goals through shared economic development strategies on a National, Provincial and Local level.
  
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  A key strategy of the CoCT is to create employment opportunities by stimulating the declining manufacturing sector through foreign and local investment and providing support to the SMME sector in the form of funding, business support and skills development.
  

Focus on Manufacturing

The CoCT economic development strategy aims to stimulate and number of industries within the manufacturing sector such as:

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  Furniture
  
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  Metal Pressing
  
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  Agro - Processing
  
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  Textiles and Clothing
  

There are new industries that the CoCT indents to investigate, analyse, and provide support to Boat Building and Green Technologies.

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  Boat Building: is an industry that has been around in the Western Cape for many years but has never garnered the same attention as any of the other sector industries. The availability of material suppliers for boat construction such as sail-making, mast builders, naval architecture, outsourced manufacturing of component parts, as well as post-production parts – make the Western Cape ideal for Boat building.
  
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  Green Technologies: This sector hold potential to grow and for employment opportunities as it can assist the CoCT in achieving its other socio economic objectives.
  

SMME Support & Development

The support of the SMME Sector is a key priority of the CoCT with the objective of reducing the cities unemployment issues.

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  The CoCT aims to provide support to the SMME Sector through national and provincial initiatives as well as to develop programmes to assist SMMEs in the manufacturing sector
  
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  The Economic and Human Development programme (EHD) will support strategic events in the business support space.
  
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  The EHD will act as a knowledge and support hub for SMMEs.
  
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  The CoCT has also identified skills development programmes to assist SMMEs with skills development, training, and advice to improve their business operations.
  
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  The Cape Town Activa initiative is new approached focusing on creating a network where organisation individuals and business owners can share information, tools, and strategies.
  

Source: City of Cape Town IDP; Western Cape PGDS