Opinion: ‘Stronger Together’ spirit key to inclusive growth
JOHANNESBURG – The Springboks’ glorious win at the Rugby World Cup in Japan – and the euphoria that followed it – will go down in history as a defining moment for South Africa.
For a nation grappling to come to terms with a decade of poor economic growth and increasingly divisive political rhetoric, this event provided a much-needed hiatus from reality and showed that we are indeed stronger together.
As the feeling of national unity wanes, it is helpful to take stock of the less enthralling, but equally important gains we made towards our country’s social and economic nation-building over this time. For the Department of Trade and Industry (dti), November 2019 has been a month of noteworthy achievements.
At the start of the month, Minister Ebrahim Patel announced the launch of the pilot phase of a new online business portal, where entrepreneurs can register a business in as little as a day for the modest sum of R175.
Even in its pilot phase, this can only be an improvement on the usual registration time of 40 days recorded by the World Bank’s 2020 Ease of Doing Business Report. It may only be a small step towards addressing the many hiccups and hurdles faced by small businesses in South Africa, but it is the first attempt at a single integrated company registration platform in the country.
What makes this even more significant is that this project is the result of a collaboration between the Companies and Intellectual Property Commission, the South African Revenue Services, the Unemployment Insurance Fund and the Compensation Fund.
This is exactly the sort of strategic joint government approach that is needed if we are serious about boosting South Africa’s growth.
Another example of strategic and collaborative policy reform being used to drive inclusive economic growth is the dti recently updated Global Business Services incentive.
The success of the Global Business Services Investor Conference held in Durban between November 19 and 21 was the result of collaboration and co-operation between the public and private sector to create jobs and drive investment and economic development.
The Business Process Services (BPS) industry was identified several years ago as having the greatest job creation potential across all service sectors in South Africa.
As a result, the dti launched the BPS incentive programme in 2014 to attract investment and create employment opportunities for our youth. The incentive was designed to provide youth with opportunities in medium to high complexity jobs linked to major global brands while at the same time land offshore business into the country.
Between 2014 and 2018, the programme created an additional 20 000 direct jobs in the sector with an average growth rate of 22 percent a year during the period. The incentive was then updated last year in response to changing market conditions to make South Africa’s BPS even more competitive globally.
What these projects have shown is that the dti can, with the right incentives, use public-private partnerships to create jobs and drive sustainable economic growth. Indeed, the dti is uniquely positioned to co-ordinate the sort of inclusive growth championed by Finance Minister Tito Mboweni in his economic policy paper earlier this year.
Mboweni made it clear that government must focus its attention on reform that both boosts South Africa’s growth in the short term, while also creating the right conditions for long-term sustainable growth. In other words, every policy must pass the “growth test” – if it does not contribute to short and medium-term growth, it must be placed on the back burner.
Other examples of public private partnerships focused on socio-economic outcomes include the launch of the Google Station in Cape Town this month and the Closed Loop Network. The Google Station is a great example of public interest service from commercial providers and could be a game-changer for township economies.
Similarly, the Closed Loop Network is a public-private partnership with the Free State Department of Education that brings together service providers such as MTN and content providers like Oxford University Press to make digital educational resources available to under-privileged learners and teachers for free. Both of these are great examples of collaboration that works and now just need to be scaled up.
As encouraging as it is to see what can happen when government departments such as the dti choose to work more closely with the private sector, it is even more exciting to see the increase in organic collaboration between private entities.
In response to widening inequality, increasing joblessness and persistently tough economic conditions, the private sector has developed socio-economic development initiatives that are not reliant on the public sector for their success.
One of these – the Impact Catalyst was launched this November in Limpopo as part of an initiative founded by Anglo American, Exxaro, CSIR and World Vision South Africa.
The goal of the project is to bring business, government and civil society together to drive large-scale socio-economic development. The idea is that by leveraging the combined scale and resources of partners, they will be able to deliver impacts far beyond what the individual partners could achieve on their own.
In essence, these partners have realised that they, much like our rugby heroes, are stronger together. It is essential that we take this spirit forward as we seek to tackle the enormous economic challenges that face us.
Adam Craker is the chief executive of IQbusiness.