Transcript City Planning Commission Theme: Growing an Enabling and

City Planning Commission
Theme: Growing an Enabling and Transformative Economy
March 2016
SUB-THEME 1: DEVELOPING AN ENABLING ENVIRONMENT FOR INVESTMENT
Studies:
i.
World Bank Doing Business in South Africa 2015
ii. SAPOA Municipal Service Cost Analysis (February 2015)
iii. Assessment of the Investment Climate of Durban (December 2015)
Study i: World Bank Doing Business in South Africa 2015
Municipality
Starting a
business
Ranking
(1-9)
Dealing with
construction
permits
Ranking
DTF
(1-9)
score
(100 =
best
result)
3
77.50
Getting electricity
Ranking
(1-9)
Registering
property
Ranking
(1-9)
4
DTF
score
(100 =
best
result)
75.32
Enforcing
contracts
Buffalo City
4
DTF
score
(100 =
best
result)
78.67
Ranking
(1-9)
4
DTF
score
(100 =
best
result)
62.84
9
DTF
score
(100 =
best
result)
62.54
Cape Town
4
78.67
1
78.08
2
81.81
8
59.23
6
67.53
Ekurhuleni
1
81.18
4
76.84
5
71.83
3
64.23
4
68.26
eThekwini
4
78.67
5
76.15
3
75.73
6
62.05
3
69.27
Johannesburg
1
81.18
8
68.52
8
55.74
1
65.82
8
66.14
Mangaung
4
78.67
9
68.22
1
83.88
9
58.41
1
71.04
Msunduzi
4
78.67
6
74.07
7
63.00
7
59.49
2
70.81
Nelson Mandela Bay
4
78.67
2
78.05
9
53.14
5
62.69
7
66.89
Tshwane
1
81.18
7
69.88
6
68.51
2
64.71
5
68.17
Study i: World Bank Doing Business in South Africa 2015
Key findings:
-
There is no relationship between the size of the city (as measured by population)
and the rankings, and no single city performs equally well on all indicators
-
eThekwini’s performance is average – some good (getting electricity; enforcing
contracts; starting a business); and some not so good (dealing with construction
permits; and registering property)
Study ii: SAPOA Municipal Service Cost Analysis (February 2015)
Key findings:
• Town planning fees - eThekwini is the third most expensive
• Consent use application fees - eThekwini is the second most expensive
• Building line relaxation application fees - eThekwini is the third most
expensive
• Consolidation application fees - eThekwini is the second most expensive
• Medium density residential building plan fees - eThekwini Municipality is
nearly two and half times cheaper than the average cost
• Retail centre development building plan fees - eThekwini is nearly one and a
half times cheaper than the average cost
• Commercial office development building plan fees - eThekwini is one and a
half times cheaper than the average cost
• Industrial development building plan fees - eThekwini is nearly one and a
half times cheaper than the average cost
• Average electricity fees - eThekwini is the third most expensive metro
Study ii: SAPOA Municipal Service Cost Analysis (February 2015)
Key recommendations:
• National Treasury and municipalities have to develop structures to unify all
records
• It is recommended that a regulating authority, made-up of professional
individuals with practical experience, be assigned to assist municipalities in
compiling fees charged for services
• It is also recommended that municipalities focus on streamlining
communication with consumers. Customer Interface Desks within each
municipal department would be useful in this regard
• Each municipality should abide by the eight Batho Pele principles
developed with regard to service delivery: Consultation; Setting Service
Standards; Increasing Access; Ensuring Courtesy; Providing Information;
Openness and Transparency; Redress; Value for Money
• Municipalities are essentially businesses; customers should be their priority
Study iii: Assessment of the Investment Climate of Durban (December 2015)
Key local business climate issues that firms were facing include:
• High cost of doing business in Durban, specifically related to electricity
prices and outages, reducing water pressure and municipal property rates;
• Lower business performance (compared to Johannesburg) as a result of the
relatively smaller size of the market in Durban than Johannesburg;
• Utility constraints such as electricity, effluent treatment and roads;
• Crime and grime at specific precincts; and
• Unavailability of higher skilled personnel.
Key institutional weaknesses include:
• Insufficient outreach interventions by the City in promoting its business
support services;
• Long turnaround times for development-related queries; and infrequent
investment climate surveys.
Study iii: Assessment of the Investment Climate of Durban (December 2015)
Key recommendations:
• Utility and infrastructure improvements – road conditions, networks and
capacities; promotion of renewable energy; adoption of smart technologies;
improve effluent infrastructure; unlock land for new development
• Institutional improvements - Re-instate the Durban Investment Promotion
Agency; and adoption of e-Government technologies
• Safety and security – manage inner-city crime and grime
• Business-outreach interventions – engage with firms which have indicated
an interest in making investments; create a systematic process of consultation
with the private sector; prepare an annual investment climate survey report
(indicators should include: municipal costs, GDP growth, business confidence
levels, overall cost of business and quality of lifestyle indicators)
SUB-THEME 2: SKILLS
Studies:
i.
Investigation of youth education and employment interventions in the eThekwini
Municipal Area (May 2015)
ii.
Constraints to growth and employment in South Africa: Analysis of data from a
medium and large manufacturing firms survey in the eThekwini area (June 2015)
Study i: Investigation of youth education and employment interventions in the
eThekwini Municipal Area (May 2015)
Key findings:
• Critical success factors for youth education and employment interventions are: scale;
innovation; service offering/quality; cost; staff; target group; and location(s)
• The provision of information about opportunities available to young people is
crucial at the school-level
• There is a general lack of job preparedness among youth
• The lack of effective communication between the public and private sectors
• The stand-alone NPO model is not a sustainable one
• There is a lack of full, holistic support that includes mentorship, coaching and
guidance for job seekers, first time employees and young entrepreneurs.
Study i: Investigation of youth education and employment interventions in the
eThekwini Municipal Area (May 2015)
Key recommendations:
• Development of a public database of available programmes – for distribution at key
points which are accessible to youth
• Collaboration amongst stakeholders – key areas include: placement, tracking,
monitoring; cross referrals; accreditation; and funding opportunities
• Funding – eThekwini to assist in identifying sources of funding
• Development of a combined database and tracking system – eThekwini should
enhance its job seekers database to assist organisations with managing and tracking
their candidates.
• Work readiness must be addressed at the school-level
• Need to develop a dynamic social network through which young people may gain
information about available opportunities
• Coaching and mentoring, and employer buy-in need to be encouraged
• eThekwini Municipality should make use Job Readiness Providers
Study ii: Constraints to growth and employment in South Africa: Analysis of data from
a medium and large manufacturing firms survey in the eThekwini area (June 2015)
Key findings:
• Around one in two establishments consider the “availability of technical/vocational
skills” to be a major constraint to growth
• Focus group discussions revealed that many firms emphasised the problem to be
with matric being a poor predictor of readiness to work, as well as the mismatch of
tertiary or vocational training to specificities of workplace demands.
• Firms are also cautious of high costs of skills given that some firms have to consider
sometimes 10% annual increases for those staff members and may rather substitute
through expansion with production technologies or new production lines.
• Two-thirds of respondents which view skills as a moderate issue are located in the
South Basin and the West, while the North and the West feature as dominant areas
in terms of major problem responses
SUB-THEME 3: SMMES AND INFORMAL ENTERPRISES
Studies:
i.
Business Development Strategy for eThekwini Municipality (November 2012)
ii.
Informal Economy Monitoring Study (IEMS): Street vendors in Durban, South
Africa (December 2013
Study i: Business Development Strategy for eThekwini Municipality (November 2012)
Key challenges faced by entrepreneurs:
• Government top down approach do not meet SMME at the point of need;
• Minimal impact of government programmes of one size fit all does not work, and
SMME’s needs are not properly assessed;
• There are no skilled people within the support institutions to do the proper business
diagnosis and support;
• Training and skills development of SMMEs;
• Access to finance and markets;
• Understanding the SMME trends and opportunities with the EThekwini, South
Africa, Africa and international;
• Entrepreneurial aptitude tests – not all SMME are born entrepreneur; and
• Management and growth – there are no compliance measures in place in
government for on-going management of SMMEs.
Study i: Business Development Strategy for eThekwini Municipality (November 2012)
Key recommendations:
Role of government - The main role of the Government is to ensure that the
appropriate policy environment is created.
Role of the private sector – development of linkages between SMMEs and larger firms,
and use of ‘enterprise development spends’.
Role of incubators - Umbrella of incubators are required at district level in small spaces
(e.g. extension of a library) near the ward business forums. The other role is to engage
with the private sector in procurement – the responsibility of the incubator is to assure
quality.
Clusters - Clusters established through PPPs can provide greater value chain support to
SMMEs.
Study ii: Informal Economy Monitoring Study (IEMS): Street vendors in Durban, South
Africa (December 2013)
Key findings:
• Profits from vending are a key source of household income
• Vendors generate employment, with 3 in 10 respondents reporting they had at least
one paid employee working for them.
• The average vendor in this sample reported a monthly turnover of R2712.
• 90% of survey respondents reported they were experiencing increasing competition
from new entrants, who started vending due to being unemployed.
• 56% of vendors surveyed did not have access to a toilet, while 21% did not have
running water. The situation is worse in the city centre than in the outlying areas.
• Three in every four vendors operating in the periphery and one in every two
operating in the centre reported being harassed by the police.
• National and local government are regarded by the vast majority of vendors as
being unhelpful to vending activities. In the focus groups interviews, the police, the
municipality in general, and the Business Support Unit (BSU) in particular were
identified as institutions hindering their work.
Study ii: Informal Economy Monitoring Study (IEMS): Street vendors in Durban, South
Africa (December 2013)
Key recommendations:
• Stop police harassment
• Draft new by-laws and review the permitting system
• Provision of basic amenities and work-related infrastructure
• Improve council–vendor relations through regular meetings
• Provide business support and training
• Develop trade-specific strategies
• Address tensions among foreign and South African vendors
SUB-THEME 7: BUSINESS PRODUCTIVITY AND INNOVATION
Study:
i.
Innovation needs analysis of eThekwini-based SMMEs (July 2015)
Study i: Innovation needs analysis of eThekwini-based SMMEs (July 2015)
Key findings:
• Varied and in some cases, limited understanding of the concept of innovation
• Most of the businesses do not have formal programs in place for generating
activities for innovation in the organisation
• Most businesses have not used the services of patent/ design/ IP attorney in the
last 5 years to assist in IP protection
• Smaller businesses do not necessarily document innovation efforts and are more
agile with respect to innovating
• Financial obstacles to innovation are significant
• Not enough innovation support/ funding organisations for eThekwini-based
companies.
• Most of the businesses do not attend innovation workshops relating to their
industry/ business
• Majority of the businesses cited lack of skills as an obstacle to innovation. Further,
they did not use government support programs to overcome obstacles due to
limited skills
Study i: Innovation needs analysis of eThekwini-based SMMEs (July 2015)
Key recommendations:
• Development of an innovation toolkit
• Increased focus on innovation support workshops/roadshows
• Encourage ‘worker innovation’/productivity improvement forums
• Incentivise business owners that invest time and resources on innovation efforts
• Create a ‘seed fund/ ring-fenced fund’ that specifically caters for business
innovation requirements
• Review/ re-look innovation funding support programs
• Conduct review/assessment of current workshops/training programs focusing
around innovation and establish their relevance to business
• Provide business owners with access to an innovation portal (industry-specific) that
allows owners to be up to date with innovation information
• Pilot a mentorship program for business owners, that is focused on innovation
(target existing businesses that participated in the innovation needs analysis study)
• Write up case studies of successful innovation business mentorships
SUB-THEME 8: INDUSTRIAL REVITALISATION
Studies:
i.
Constraints to growth and employment in South Africa: Analysis of data from a
medium and large manufacturing firms survey in the eThekwini area (June 2015)
ii.
A pilot study of Greater New Germany for brownfields redevelopment and
industrial revitalisation in eThekwini (August 2015)
Study i: Constraints to growth and employment in South Africa: Analysis of data from
a medium and large manufacturing firms survey in the eThekwini area (June 2015)
Key findings:
• eThekwini’s manufacturing sector experienced a 27.8% decline in the number of
firms between 2002/3 and 2013/14.
• Almost one in three full-time employees in the manufacturing sector, are employed
in the ‘food processing and beverages’ sub-sector.
Key constraints to growth:
1. Depreciation of the Rand/US$ exchange rate (87% of firms)
2. Low rates of economic growth in SA (86.5% of firms)
3. Cost of energy (86% of firms)
4. Cost of transport (80.5% of firms)
5. Availability of technical/vocational labour skills (80% of firms)
6. Crime and theft (79% of firms)
Study i: Constraints to growth and employment in South Africa: Analysis of data from
a medium and large manufacturing firms survey in the eThekwini area (June 2015)
Key recommendations:
• Maintenance of existing infrastructure – this was reported ahead of investment in
new infrastructure.
• Firms felt that increases in property rates must be monitored and reduced.
• Improving skills and the supply of skills
• Preferential procurement from local suppliers may mitigate reduced demand however a stringent compliance framework will have to be developed, in order to
ensure that firms which supply their products to local government are genuinely
engaging in value-adding manufacturing activities.
• eThekwini Municipality has several sector development programmes, and the
survey found that firms find these industrial cluster programmes to be very useful Involvement in these clusters is extremely beneficial to firms as it allows them to
interrogate issues pertaining to competitiveness and productivity, which if improved,
can assist firms in addressing their vulnerabilities to demand shocks and rising
operating costs.
Study ii: A pilot study of Greater New Germany for brownfields redevelopment and
industrial revitalisation in eThekwini (August 2015)
Key findings:
• In 2010, there were 761 businesses in the Greater New Germany area. Of these, 414
continued to remain in existence in 2015
• Smaller firms in the area have a high mortality rate; larger firms retain their existing
position; and medium businesses tend to grow, and exit towards other better
locations
• Up-keep of properties along arterial roads was of an acceptable standard – this
declined as properties were located farther away from arterial roads
• Businesses related to the automotive sector, even in locations other than the main
arterial roads, tended to demonstrate a higher degree of resilience
• There is a steady demand for industrial units of a smaller size
• Safety and security in the area is a major issue
• Steady overflow of informal housing from Clermont area
• The municipal investments in the area have been in facilities like stadiums which are
not used as often.
Study ii: A pilot study of Greater New Germany for brownfields redevelopment and
industrial revitalisation in eThekwini (August 2015)
Key recommendations:
•
•
•
•
•
•
•
•
•
Focus on automotive sector development
Develop a clear and innovative policy framework
Set-up a Brownfield Development Team
Re-align information systems for brownfields development
Improve City-Business dialogue
Business sustainability support
Improved stakeholder engagement
Develop a suitable incentives and local financing package
Brownfield development modelling
Shivani Singh
Assistant Research Officer
(Policy, Strategy, Information and Research)
[email protected]
031 322 2996