CEO Speech Delivered At The Gauteng WPC Programme Milestone Workshop, 25 August 2022
Productivity SA Chief Executive Officer (CEO), Mr Mothunye Mothiba, speech at the Gauteng Workplace Challenge (WPC) programme milestone workshop, 25 August 2022, Premier hotel, Midrand, Gauteng
Programme Director. Ms Lalane Janse Van Rensburg, Executive Manager: Region 1, Productivity SA,
Mr. Masale Selematsela – President: FEDUSA and Board Member at Productivity SA;
Ms. Ester Tloane. Chief Director: Department of Employment and Labour and former board member at Productivity SA;
Mr. Jak Koseff. Deputy Director General: Economic Planning and Development, Department of Economic Development, Gauteng Provincial Government;
Mr Moses Mokgosi, Managing Director, Auto Blue Oils & Projects;
Ms Winnie Magodi Co-Director& Owner, Matongoni Plastics;
Ms Shanaaz Ebrahim. Director: Skills for the Economy in the Spatial, Industrial, and Economic Transformation Branch, The dtic;
Mr Masha Mathopane. Director: Inclusive Economy, Gauteng Department of Economic Development (GDED);
Mr. Donald Mabusela. Director; Strategic Partnerships and Customer Care, The dtic.
Ms. Eugenia Vijande – Representing the Embassy of Argentinia;
Mr. Ivan Mendoza-Benitez – Representing the Embassy of Colombia;
Ms. Mpumi Mnconywa. – Chief Director: UIF
Acting Executive Manager: Research, Innovation and Statistics, Productivity SA, Dr Leroi Raputsoane
Acting Executive Manager : Competitiveness Improvement Services (CIS), Productivity SA, Ms Amelia Naidoo ( in absentia)
Representatives from Business, Labour and Academia.
Colleagues from Productivity SA and the dtic.
Members of the media, all invited guests, Ladies and gentlemen.
THOBELA, NDAA, MOLWENI, GOEIEMORE, SANIBONANI, GOOD MORNING
Programme Director, Ladies and Gentlemen, all me to greet you all, in particular, women of our country as we draw towards the end of Women’s month. I am humbled and honoured by your presence and sharing your valuable time, out of your busy schedules to participate in this WPC Milestone workshop. This is confirmation of your commitment to the partnership (social contract) we made to collaborate in implementing the Economic Reconstruction and Recovery Plan (ERRP) and to Grow Gauteng Together towards 2030. promote employment growth (job preservation and creation of productive employment and decent work) in the Gauteng Province. We do this understanding that, growing Gauteng (employs over 4,7m30% of the 15,6memployed persons in South Africa with over xxx SMMEs), which is the economic hub of South Africa, the seventh largest economy in Africa, the 26th largest urban regions in the world and the 6th largest urban agglomeration in the continent will have a ripple effect on other Provinces(Growing Gauteng Together, 2019 – 2030)
As our erstwhile statesman and the first president of South Africa‘s democratic dispensation, Nelson Mandela once said “We must use time wisely and forever realise that the time is always ripe to do right.” I can assure you that your presence in this workshop is highly valued and it is not time wasted. It is the Right Time to do the Right Things, the Right Way.
Ladies and Gentlemen, this Workplace Challenge Milestone Workshop afford us as stakeholders and strategic partners (The DEL, The dtic, GEDA, Gauteng Dept of Economic Development, Districts and Metros and other players in the economy and the labour market) an opportunity to reflect and stake stock of progress made since 2019 to date (over the MTSF 2019 – 2024), and plan our programme interventions to support our enterprises to be competitive and sustainable to preserve and create jobs towards 2030.
As we commemorate Women’s Month, the best tribute we can give to the women of South Africa and the girl child is to acknowledge that, we have achieved very little in creating an enabling environment conducive for women to participate in economy both as workers an entrepreneurs.
The productive potential of South African women in the labour market remains unused and women who do find work are usually in vulnerable environments, often characterized by inadequate income, low productivity and difficult conditions. This discrimination, which we cannot justify persist despite women representing more than half of the working population (15 – 65) in South Africa. Their participation in the business sector remains significantly low. The low overall female entrepreneurship is explained by the relative lack of participation, particularly young women between the ages 21 to 34.
A further indictment on us is that the rate of unemployment among women was 36.8% compared to 32.4% among men, with men more likely to be in paid employment than women, regardless of race. The high unemployment rate among women makes them the most vulnerable population group in the country. Therefore, entrepreneurship should be a safe career path for most women in South Africa who are the main breadwinners mainly in rural areas. We continue discriminating against women of our country, and the girl child is most vulnerable, worse-off exposed to Gender-Based Violence (GBV)
We cannot justify this discrimination because there is sufficient evidence that shows that women have the capability to change their plight and overcome the barriers to entry that we as men have create, and we should work with them to change this. There are exceptional women entrepreneurs who are already playing a critical role in jump-starting the economy and getting the country’s food security, job creation and financial stability back on track after a tumultuous year. One of the owners of the companies that will showcase their implementation of the Workplace Challenge Programme, Co-Director & Owner of Matongoni Plastics, Ms Winnie Magodi is sheer testimony of the exceptional women entrepreneurs amongst us. According to research by Development Economics, women-owned businesses established between 2018 and next year may generate about R175 billion a year and create close to 1 million jobs. The World Bank also reports that women are critical for job creation. Now is the time to accept that, more women-run businesses will be the tonic South Africa desperately needs because greater economic participation by women stimulates economies, reduces poverty, and creates jobs.
As much as we saw a decrease in the unemployment rate (improved marginally by 0.6 of a percentage point from 34.5% in the first quarter to 33.9% in Q2), this was eroded by the increase in CPI by 1.6% point to 105.80 from 104.29. We are not out of the crisis, and we should not let a good crisis go to waste.
Programme Director, the emancipation of women through entrepreneurship is critical and this should be supported in keeping with The Theme of this milestone workshop – “Adapting and growing stronger, together”. This Theme is premised on the need for us to be agile in navigating the rapidly changing technological advancements and the Changing Nature and Future of Work, Innovation is the way to go. Just over a decade ago, words such as” gig economy” were hardly heard of but these days it has become a common term. The theme highlights the need for adapting to new ways of doing business and leveraging on collaboration and partnerships for growth.
It is for this reason that as we host this milestone workshop, we call upon the leadership (both political and administrative) of the Gauteng Economic cluster departments at provincial level, the three metropolitan municipalities of the City of Ekurhuleni, City of Johannesburg and City of Tshwane Metropolitan Municipalities, as well as two district municipalities, which are further subdivided into six local municipalities to work with us to improve the competitiveness and sustainability of their economies and enterprises, particularly SMEs (both formal and informal) operating in the priority productive sectors.
Whilst it is the smallest of South Africa’s provinces, covering only 1.4% of the total surface area of South Africa, Gauteng is the economic powerhouse of the country and is also the most populous, being home to about 13 million people. Thus, all hands should be on deck to improve the improve the competitiveness and sustainability of Gauteng enterprises.
Commentators and pundits alike have lamented that “South Africa urgently needs to find a way to develop a more inclusive social order that brings social partners (labour, government and business) together as a basis for long-term economic development and growth”. There is a strong call for social partners to rise above their sectional interests and put in place a social compact that is for the greater good of the country with national interests put forward.
The clarion call for a social compact has been emphasised by our President, Honourable Matamela Cyril Ramaphosa, who impressed it upon us that, to address the immediate crisis and to create conditions for long-lasting stability and development, we should work together. The President says the country needs a number of impactful interventions, including attracting more investment and enhancing the capability of the state. He says the economy has not been growing at the pace that could enable us to make a meaningful dent in unemployment, poverty and inequality and to turn our economy around and create the millions of jobs needed is something that cannot be achieved by government alone. A comprehensive programme will require the mobilisation of all social actors.
Over the last few months, a team led by the Ministers of Employment and Labour (which is Productivity SA ‘s lead department), Trade, Industry and Competition, and Finance have been meeting with social partners to map out the priorities that must be reflected in the new social compact. The team identifies priority actions to achieve higher levels of investment and growth, increase employment, unleash the dynamism of the private sector, protect the rights of workers, expand support for the unemployed and tackle extreme poverty.
The proposed compact builds on many of the key tenets of the Economic Reconstruction and Recovery Plan such as job creation, accelerating structural reform and growth enhancing measures, the expansion of mass public employment and social protection, and driving economic inclusion through greater entrepreneurial activity. As Productivity SA (with the mandate to promote employment growth and productivity) we play a strategic role in the economy and labour market, and are a critical player in the social compact, particularly as it relates to enhancing the productivity and competitiveness of South Africa.
Programme Director, Ladies and Gentlemen today is about productivity improvement and by extension the improvement of the performances of our enterprises. Productivity improvement is the most effective way of ensuring long-term competitiveness, long-term business success, economic growth and, consequently, tackling the challenges of unemployment, poverty, inequality, and exclusion. Productivity leads to growth, which leads to income levels and improved well-being. The more productive the economy, the more its enterprises become competitive and sustainable as well as grow to preserve existing jobs and create new jobs.
One other key reason for today’s workshop is to report back on the progress of Workplace Challenge Programmes and interventions throughout Gauteng. Productivity SA has a signed agreement with Gauteng Economic Development Department. The agreement covers all the relevant development bodies under their umbrella including Gauteng Economic Development. I am proud to provide feedback that the Workplace Challenge Programme has intervened in and is also currently involved in as follows:
• GAUTENG DEPARTMENT OF ECONOMIC DEVELOPMENT (GDED)
The GDED and its agencies Gauteng Enterprise Propeller (GEP) and Gauteng Growth Development Agency (GGDA) formed a key strategic partnership with Productivity SA to assist the Gauteng based companies to improve their competitiveness and productivity. The three years Memorandum of Understanding (MOU) between the department and its agencies was signed in 2021. In 2022 Productivity SA further signed an SLA with GGDA targeting 10 emerging and 10 stable businesses to go through a 6 to 12 months Exporter Competitiveness Programme. Productivity SA is currently doing nurturing and baseline assessment for these 20 businesses. The ultimate goals are to drive productivity movement and encourage the participation into Productivity regional and National Awards thereby increasing the overall Provincial growth ( GPD, Employment and Export value).
• AUTOMOTIVE INDUSTRY DEVELOPMENT CENTRE (AIDC)
The MOU between Productivity SA and the AIDC was signed in June 2022, to support 1 cluster of 5 Kaizen projects and 20 entrepreneurs on productivity capacity building relevant to operational needs. The objective of Kaizen is to introduce the key concepts and tools of Kaizen; To create active participation for both top management and front-line workers; To facilitate problem solving techniques aimed at improving key performance indicators such as Cost, Quality, Speed, Delivery, Morale and Safety; and Identify and define key activities to drive continuous improvement.
• Johannesburg Water
The Workplace Challenge Programme is currently being implemented at Johannesburg Water. The intervention entails using train-the-trainer methodology in 10 depots across Johannesburg Water during the 2021-22 and 2022-23 financial year. This mammoth intervention will see a total of 336 employees and 80 productivity champions capacitated on Workplace Challenge Programme tools to improve productivity and competitiveness within Johannesburg Water.
This partnership was entered into in 2020 to implement the Workplace Challenge Programme (WPC) and achieve the following objectives:
• Empower employees to solve the Quality, Cost, Delivery, Safety, Morale (QCDSM) problems
o A total of 336 employees including regional, depot and operations managers attended Management system training and Sensitisation session in preparation for the project roll out.
o Toolkit Training
o Toolkit coaching
• Continuous improvement and efficiency of work processes
o Toolkit auditing/external audits
• Set QCDSM KPIs in alignment with Organisational Strategic Objectives
o Establishment of 40 Mini Business Units
Ekurhuleni Metropolitan Municipality
Productivity SA has been implementing solutions with the Ekurhuleni Metropolitan Municipality since 2016. The implementation scheduled for 2022/2023 Financial year is for Business Performance Improvement Solutions for 100 Cooperatives in Industrial Parks. A further 50 Cooperatives have been earmarked for fully fledged Workplace Challenge Kaizen Programmes with Productivity SA.
SACONO (South African Congress of Non-Profit Organisations)
• Productivity SA has a long-standing relationship with and has recently signed a two-year Memorandum with SACONO with the focus of improving productivity and competitiveness within the informal sector. The roll-out entails awareness and marketing campaigns to attract beneficiaries to participate in Business Start-Up Training Workshops. It is envisioned that more than 500 Cooperative in agriculture, textile and other relevant sectors will benefit from the participation in this programme.
Small Enterprise Development Agency (SEDA)
• Productivity SA is hosting multiple online webinars/capacity building sessions with Seda across all Provinces. Productivity SA is also implementing a customised Kaizen solution for beneficiaries who form part of the Seda programme in Gauteng
Tshwane University of Technology
• Productivity SA has partnered with the Tshwane University of Technology with a focus on the access and exposure of students/graduates to the Productivity SA offering starting with the introduction of Productivity concepts straight through to full on productivity implementations and joint Enterprise Development and Research Projects.
Some of the key benefits of implementing the Workplace Challenge Programme include:
• Improving the management decision making (effectiveness) and getting better results from the workforce through involvement and consultation – The change management process about effectiveness and improves workers morale.
• Improving process efficiency and flexibility – resulting in fewer errors or less disruption, good service delivery within a shorter time, and lower costs.
• Improving the Product/Service efficiency – with a process that gives more output for the same inputs, resulting in higher customer satisfaction and quality of service delivery benefits.
In the previous Financial Year of 2021/22 in Gauteng, Productivity SA capacitated 466 Enterprises and also capacitated 465 Black Owned Enterprises. During that financial Year, a total 37 Workplace Challenge Programme contracts were signed. In the current Financial Year, the aim is to continue with the commendable and even exceed the targets.
As we work towards facilitating economic growth, it is important to note SMMEs are still facing numerous challenges and issues which include but not limited to legislative compliance, economic constraints, and access to finance for their survival and growth. Most are relatively stagnant, employing mostly unskilled/semi-skilled workers, struggle to transform their informal operations into established businesses. They also struggle to break free from a restrictive owner mindset and assume a more strategic role largely because they often lack sufficient performance management systems, operating models, and management structures with well-defined roles and responsibilities, key performance indicators (KPIs), and designated decision-making.
It is evident that the SMMEs require focused Enterprise Development and Support Ecosystem and Programmes to create an enabling environment conducive for entrepreneurship and sustainable enterprises that create and deliver value (generate wealth and profits for owners, contribution to GDP growth, preserve existing jobs and create productive employment and decent work, and improve the incomes and wellbeing of workers, as well as contribute to social wellbeing). Our innovative solution to transitioning our SMMEs from informality to the formal economy should include productivity, which is a key factor for competitiveness and sustainable growth, targeting those in the priority productive sectors, which intervention will also assist in resolving the high levels of informality, the consequence of which are high levels of unemployment, poverty, and inequality.
SMMEs are an integral characteristic of emerging and developing countries’ economies, accounting for about a third of low- and middle-income countries’ economic activity, employing about 2 billion workers (IMF, 2020). However, most are comprised of unproductive firms providing low-paying jobs (La Porta & Schleifer, 2014). The low productivity growth of informal SMEs also lead to low-income generation, exacerbates informality and inequality, and poor growth performance, the consequence of which is generational and deep poverty, and inequality. To this end, I would like to urge all of us to adapt and grow stronger as we work towards tackling the country socio economic challenges. I thank you all