Today, the Western Cape Provincial Cabinet approved the establishment of a new Economic Development Agency (EDA) for the region. The EDA as a formal corporate entity is due to be launched by end March 2012.
While many of the organisational and operational details are still to be worked out, here is a quick guide to the EDA’s intended role and functions:
What will the EDA do?
The EDA will be a partnership-based organisation that will lead, coordinate and drive the regional economic growth, development and inclusion agenda through:
- Economic and market intelligence and monitoring (evidence-led strategy)
- Economic vision and strategy (leadership and common agenda)
- Business attraction, retention and expansion (business and investment climate)
- Single brand platform (marketing alliance)
- Organisation of the economic system for optimum delivery
Economic development involves at least three distinctive clusters of activity – growth, development and inclusion. These need to be integrated into a single development framework: not ‘either/ or’, all are needed.
What outcomes will the EDA prioritise?
- Building a shared economic vision and a common agenda
- Shift from an existing ‘culture of disaggregation’ to a more collaborative approach on the economy. Behaviour change starts now!
- Better economic and market intelligence, so that economic development strategies are more evidence-based
- Incentivising business organisations to work more closely together under the banner of the EDA
- Single brand platform for Western Cape and Cape Town
- Closer working relationship with national government departments and agencies on the economy
- Better coordination of economic effort between Province and the City of Cape Town, given the importance of Cape Town as an engine of growth in the regional and national economy
- Better coordination of economic effort between Province and local government
- Single strategy towards contested activities and markets, e.g. visitors, firms, events and festivals, students, investors, institutions, innovators and entrepreneurs, research, etc.
What could the EDA mean for the Cape Town and Western Cape economy?
Over time, and it will take both time and lots of effort to improve economic conditions, this will mean:
- Higher employment (including temporary employment programmes)
- Improved business and investment climate
- More competitive, productive and resilient economy
- More coherent regional business brand
- Improved hard and soft economic infrastructure (digital, transport, logistics, and educational and workforce development, institutional support systems)
- Greater support for all levels of economic activity, from the informal economy to new enterprises, to small and medium sized business to multinational corporations;
- Higher levels of external investment
- Better targeting of particular parts of the city and region for regeneration, growth and spatial inclusion, through area-based initiatives and increased mobility and access
Why is the EDA being established?
To date, the absence of a common economic agenda and strategy, and a disjointed regional economic delivery system, has resulted in the following:
- As a region, we are not achieving our full growth potential, particularly in relation to our assets and opportunities
- Crisis of jobless growth: We are not reducing poverty and inequality sufficiently or quickly enough – breaking the cycle of poverty means expanding incomes and jobs, not just the provision of more household and welfare services to more people
- Many barriers remain to making us a more competitive region – while the post-recession global economy has become even more competitive
- We have a relatively weak regional business brand, partially because of a traditional focus on leisure tourism and ‘quality of life’ assets (where Cape Town and the region is sometimes associated as an antidote to business and development), and partially because of the gaps in our business and investment climate and economic delivery system
What sort of organisation will the EDA be?
The EDA proposition is to some extent unconventional, because it is trying to address old problems in a new way. It cannot be ‘business as usual’. The EDA will:
- Be a cross-sector partnership, with the public sector, business partners and other economic stakeholders playing key roles, rather than a traditional public sector agency
- Not substitute the role of the public sector in the economy, but will require greater collaboration between different spheres and sectors of government to avoid wasteful competition and duplication of effort
- Be market-facing (understanding long-term demand trends) and industry-facing (understanding the needs of firms and investors)
- Be established as a not-for-profit company rather than a statutory body
- Be a relatively small, well-resourced leadership and coordinating body (the ‘centre of gravity’ of the economy) rather than large ‘mega-agency’ or ‘command and control’ organisation
- Seek to create a flexible and creative operational environment in order to attract top minds and skills and promote innovative thinking
- Not be a general all-purpose development vehicle, but will focus on keeping the economy and jobs at the top of the development agenda
- Be a non-partisan organisation, aligned to long-term economic cycles rather than short-term political cycles
- Look for opportunities for coalition building, partnerships, networks and knowledge exchange
Will the EDA take over the role of government?
The EDA does not substitute for the role of government in the economy, but rather, by being a market- and industry-facing intermediary organisation, adds value to government roles and functions.
The primary role of government is to be community-facing (to ensure that the needs of citizens are represented and addressed) and government-facing (to coordinate efforts of all line function departments through a ‘whole of government’ approach and to ensure vertical alignment of spheres of government).
Division of labour between government and the EDA, and changing role of government within economic delivery system
How will the EDA involve other stakeholders?
The EDA is an invitation for all economic role-players, within government and outside, to get together on the basis of a common agenda to address the most pressing issues of our generation: poverty, inequality and unemployment. The EDA will be an economic partnership rather than a traditional government agency, based on better aggregation of effort amongst all role-players rather than amalgamation of existing organisations.
The EDA will seek to organise a more coherent system of economic delivery in the region, i.e. helping public, private, social and institutional partners to do their jobs better rather than try and do everything itself. The EDA, and the system of economic delivery as a whole, will only be strong as the partners.
How will the EDA approach spatial development?
The EDA will organise in both economic spaces (specifically in partnership with local government) and with economic sectors and clusters across the whole of the province. However, a ‘one size fits all’ approach that does not differentiate between the needs of areas of potential growth and the needs of areas of greater social deprivation is not helpful.
To this end, based on the principle of “cooperative differentiation”, four sub-regional economic partnerships will be established under the aegis of the EDA as follows: the Cape Town City-Region Partnership (with 87% of the Provincial GDP and 78% of Provincial population, an important region for organising both global competitiveness and economic inclusion efforts), and the South Cape, Karoo and West Cape Partnerships (to ensure greater economic linkages between urban and rural, and leading and lagging areas).
Cooperative differentiation model – EDA leading four cross-sector sub-regional economic partnerships, with emphasis on linkages between sub-regions. The economic partnership boundaries are fluid and create spaces of economic cooperation rather than new layers of governance or administration.
Did the EDA investigation take global best practice into consideration?
The EDA took a number of city and regional economic development models into account from both developing and developed parts of the world, including Amsterdam, Auckland, Barcelona, Bilbao, Bogotá, Cataluña, Gauteng, Johannesburg, Hong Kong, London, Madrid, Melbourne, Miami, Milan, Mumbai, New York, Toronto, Sheffield, Shanghai, Singapore, Sao Paulo and Turin.
When will the EDA be established?
The aim is to formally launch the EDA as a corporate structure by March 2012. However, many things can and will take place to improve the system of economic delivery before this date. For example, in the next nine months, the EDA process will aim to:
- Establish an Economic CEOs Forum to ensure better coordination and aggregation of effort amongst private and public agencies and entities involved in economic development
- Progressively establish four sub-regional cross-sector economic partnerships, with the involvement of local government and local business organisations
- Re-orientate the economic roles and improve the economic delivery capacity within Provincial Government and the City of Cape Town
- Strengthen intergovernmental relations and cooperative arrangements with national government ministries, departments and agencies that impact on the economy
- Strengthen ties between the Cape Town City-Region, the Gauteng City-Region and the greater Durban City-Region
- Establish first stage work-streams to bring the necessary role-players together around the following issues:
- Economic and market intelligence
- Vision and strategy
- Business and investment climate
- Common brand platform, focusing on Cape Town and the Western Cape as an economic and business location, and not just a visitor destination
- Stage two work-streams will include:
- Part-time employment opportunities
- Economic inclusion agenda
- Economic infrastructure (digital, transport, logistics)
- Regional innovation strategy and systems
- Building contested markets strategies
- Economic leadership development
2.The strength of the visitor destination brand vs. the economic location brand
Brand Cape Town is clean, it can be argued that it is green but the underlying question that should inform the establishment of the EDA is whether the Western Cape is economically smart?
Since its launch brand Cape Town has positioned itself as arguably one of the most sought after tourism destinations globally , however there is little or understanding of how the growth in the tourism fraternity has impacted on the promotion and viability of other key economic sectors in the province. Brand Cape Town has concentrated international visitors to the Cape Town metropole leaving little or no exposure semi-urban and rural economic sectors resulting in a disjointed and fragmented economic development activities.
Whilst Cape Town is positioned as a premier tourism destination globally it can be argued that the economic perception of the Western Cape has yet to have the desired impact that would result in a more inclusive and more robust center of economic activity.
Whilst key sectors like boatbuilding and ICT (Call centers) have grown significantly, again these have been focused on the metropole whilst skills in the semi-urban and rural areas of the Western Cape are rearing to be developed.
There is no shortage of individual passion and drive for the citizens of the province to develop themselves, there are structural inefficiencies that are resulting in our citizens being unable to leverage on the activities being driven by the Department of Economic Development and Tourism Western Cape and these can be spelled out as follows:
• The lack of an efficient and accessible (financially and otherwise) transport
system between the metropoles and semi-urban and rural areas.
• Economic development activities are activated in absence well established
and verified research activites
• Post matric education and training activities are disjointed and unstructured
• There is little intervention from colleges and universities to develop training
centers in semi-urban and rural areas.
• Little to no participation is evident from rural structures when policy and strategy
discussions are activated at broader strategic levels.
• The proverbial “Red Tape “
A key example to illustrate the deficiencies outlined above is the attempt to establish a fish farming operation in rural Western Cape in 2008. Whilst the research showed the Rural Western Cape has the right climate, natural resources and a large captive market
(protein hungry rural Africa), the industry has not been developed to the desired outcomes, despite significant funding being received from private investors from Norway. The result being the closure of two such fish farms. Are we staring gold in the face and walking away?
The question begs how we resolve the deficiencies to benefit the citizens of our province and in doing so establishing the PROVINCE as a vibrant Centre for economic activity and participation that will form a basis and role model for the rest of Africa.
To quote Prime Minister Clarke of New Zealand “We need to develop our economic sectors to be robust, efficient and result driven otherwise we will be dangerously close to marketing a white elephant”.
The Research shows that we need to:
• identify the key sectors we wish to develop
• empower the rural citizens to ensure skills are developed in these sectors
• establish a more robust and accessible transport system for the movement of
goods and services between rural and urban areas.
• ensure world class products and services are delivered
• establish centers of economic activities in semi-urban and rural Western Cape
which must lead to the establishment of economic corridors in the Cape.
• Our political masters must ensure that the proverbial Red Tape is eliminated
• Establish focused international marketing activities promoting the product
coming out of the Western Cape as best of breed and establishing our business
reputation in key international markets.
For examples of how urban and rural linkages work best we need to better understand how leading agricultural economies ensure product is delivered efficiently and effectively to urban centers for international export. This will clearly show efficiency in transport mechanics and rural centers of vibrant economic activity. Examples of flourishing urban-rural economic linkages can be found in Australia, Canada and the Netherlands all which have one common denominator being: Inclusive and active participation in the politics of economics by all sectors of society.
Brand Cape Town is clean, it can be argued that it is green but the underlying question that should inform the establishment of the EDA is whether the Western Cape is economically smart?
Since its launch brand Cape Town has positioned itself as arguably one of the most sought after tourism destinations globally , however there is little or understanding of how the growth in the tourism fraternity has impacted on the promotion and viability of other key economic sectors in the province. Brand Cape Town has concentrated international visitors to the Cape Town metropole leaving little or no exposure semi-urban and rural economic sectors resulting in a disjointed and fragmented economic development activities.
Whilst Cape Town is positioned as a premier tourism destination globally it can be argued that the economic perception of the Western Cape has yet to have the desired impact that would result in a more inclusive and more robust center of economic activity.
Whilst key sectors like boatbuilding and ICT (Call centers) have grown significantly, again these have been focused on the metropole whilst skills in the semi-urban and rural areas of the Western Cape are rearing to be developed.
Whilst there is no shortage of individual passion and drive for the citizens of the province to develop themselves, there are structural inefficiencies that are resulting in our citizens being unable to leverage on the activities being driven by the Department of Economic Development and Tourism Western Cape and these can be spelled out as follows:
• The lack of an efficient and accessible (financially and otherwise) transport
system between the metropoles and semi-urban and rural areas.
• Post matric education and training activities are disjointed and unstructured
• There is little intervention from colleges and universities to develop training
centers in semi-urban and rural areas.
• Little to no participation is evident from rural structures when policy and strategy
discussions are activated at broader strategic levels.
• The proverbial “Red Tape “
A key example to illustrate the deficiencies outlined above is the attempt to establish a fish farming operation in rural Western Cape in 2008. Whilst the research showed the Rural Western Cape has the right climate, natural resources and a large captive market ( protein hungry rural Africa), the industry has not been developed to the desired outcomes, despite significant funding being received from private investors from Norway. The result being the closure of two such fish farms. Are we staring gold in the face and walking away?
The question begs how we resolve the deficiencies to benefit the citizens of our province and in doing so establishing the PROVINCE as a vibrant Centre for economic activity and participation that will form a basis and role model for the rest of Africa.
To quote Prime Minister Clarke of New Zealand “We need to develop our economic sectors to be robust, efficient and result driven otherwise we will be dangerously close to marketing a white elephant”.
The Research shows that we need to:
• identify the key sectors we wish to develop
• empower the rural citizens to ensure skills are developed in these sectors
• establish a more robust and accessible transport system for the movement of
goods and services between rural and urban areas.
• ensure world class products and services are delivered
• establish centers of economic activities in semi-urban and rural Western Cape
which must lead to the establishment of economic corridors in the Cape.
• Our political masters must ensure that the proverbial Red Tape is eliminated
• Establish focused international marketing activities promoting the product
coming out of the Western Cape as best of breed and establishing our business
reputation in key international markets.
For examples of how urban and rural linkages work best we need to better
understand how leading agricultural economies ensure product is delivered
efficiently and effectively to urban centers for international export. This will
clearly show efficiency in transport mechanics and rural centers of vibrant
economic activity. Examples of flourishing urban-rural economic linkages can
be found in Australia, Canada and the Netherlands all which have one common
denominator being: Inclusive and active participation in the politics of economics
by all sectors of society.
That’s great but still these are only expectations of what can be achieved with no real plan how to implemented it! I would like to see facts on the amount of money that will be spent and how long it will take to be operational!
Knowledge, education and skills development should be at the heart of the EDA.