Chief Executive Officer Northen Cape Milestone Speech 

WELCOME SPEECH AT THE NORTHERN CAPE WORKPLACE CHALLENGE PROGRAMME MILESTONE WORKSHOP

3 NOVEMBER 2023

Programme Director: Productivity SA Senior Productivity Practitioner: Region 2, Mr Phil Coki

Mr Lionel Archillies: Deputy Director in the Incentives Branch at the dtic

Mr Bonolo Moea: Chief Executive Officer: Kimberley Diamond & Jewellery Incubator

Mr Daryl Christians: Executive Manager: Integrated Economic Development Services, NC-DEDAT

Ms Kedisaletse Williams: Provincial Manager: SEDA, Northern Cape

Mr David Molefe: Deputy Director – Incentives Branch at the dtic

Toufiekas Projects T/A Toufiekas Kitchen and Coffee Bar

Ubunele Primary Cooperative

Mr Philiswa Mnguni: Executive Manager-Region 2 Operations, Productivity SA

Ms Amelia Naidoo: Acting Executive Manager for Competitiveness Improvement Services Programme at Productivity SA

Representatives of Organized Labor: Union Federations and Union Members

Representatives of Business and Members of the Business Community

Representatives of Government and State-Owned Entities

The Executive Management and staff of Productivity SA

Members of the media

Ladies and gentlemen, Good Morning

Programme Director, Ladies and gentlemen, allow me to join the nation in celebrating the Springboks (Goo Bokke) for winning the 2023 World Rugby Cup back-to-back (Goo Bokke). As we celebrate this momentous achievement, I also want to thank you for taking the time out of your busy schedules to join us in this Northern Cape Workplace Challenge Programme Milestone Workshop, which also marks a joyous occasion of celebrating the 25th anniversary of the Workplace Challenge Programme (commonly referred to as the WPC Programme). We are celebrating 25 years of creating an enabling environment for competitive and sustainable enterprises that create value.

The WPC Programme was initiated in 1998 by stakeholders (government, business, and labor) in the National Economic Development and Labor Council (NEDLAC) under the auspices of the Department of Trade, Industry, and Competition (the dtic), which funds the Programme. The stakeholders then had an understanding and vision that economic development and prosperity of South Africa depended on them collaborating to create an enabling environment for South African enterprises to compete favorably in the global value chain, and to create new, more, and better jobs.

The WPC Programme was initiated to bring business, labor, and government together to discuss and reach agreement on a set of arrangements and measures to improve the competitiveness and sustainability of enterprises and sectors, growth, and increasingly higher levels of employment across all industrial sectors in the national economy.

Key tenets of the WPC Programme are workplace democratization and collaboration between management and workers as well as at the macro level (government, business, and labor), and at sector level (industry players including academia) to improve value chain competitiveness, which I believe has been the cornerstone of our successes over the past 25 years.

The aim and focus of the WPC Programme is to improve the Productivity and Competitiveness of Enterprises through improved value chain efficiencies, implementation of clusters for industrial competitiveness, collaborative relations, continuous improvement, and establishment of model companies to disseminate processes and lessons.

The cooperation between the dtic and Productivity SA (which is a public entity of the Department of Employment and Labor (DEL), with the mandate to promote employment growth and productivity bears testimony to a Joined-Up Government towards an Integrated Enterprise Development and Support Ecosystem to create an enabling environment for entrepreneurship and sustainable enterprises that create value.

During the 25 years, over 3000 companies participated in the WPC Programme, with about 33 000 jobs preserved and created. Just last year (2022/23 FY) alone, we supported 101 enterprises. 80% of the businesses which we supported are owned by Black people and in addition, 51% of these are owned by women, with 25% owned by young people. Overall, the WPC achieved 12 of the 14 business plan targets for the last quarter (a performance score of 86%), despite the challenges in supporting Special Economic Zone (SEZ) and Industrial Development Zone (IDZ) enterprises and supporting previous WPC clients.

I call upon the leadership of the province (both at provincial and local level) to work with us to enroll more companies to support through the WPC Programme across the Districts and in the SEZs/Industrial Parks.

Ladies and gentlemen, Productivity SA remains committed to ensuring that we collectively create an enabling environment for entrepreneurship and sustainable enterprises that create value.

As we celebrate the significant milestones achieved in the past, we need to use this celebration as a springboard to accelerate job creation and lead a generation that is full of hope. It is the achievements of the Workplace Challenge Programme that should drive this hope. South Africa is faced with a mammoth task. In June, Productivity SA in collaboration with the Swiss based Institute of Management Development (IMD) released the 2023 World Competitiveness Yearbook (WCY).

South Africa’s international competitiveness ranking deteriorated slightly to 61 in 2023 from 60 in 2022. The IMD WCY is an annual report that ranks the international competitiveness of selected countries, 64 in 2023 from 63 in 2022. The IMD WCY is recognized internationally as the leading Survey of competitiveness between nations. The World Competitiveness rankings are drawn from a combination of Hard data and an Executive Opinion Survey. Productivity SA is the information partner institute for the IMD WCY in South Africa. Productivity SA is an entity of the Department of Employment and Labor (DEL) and is responsible for employment preservation and creation among other functions.

The latest Quarterly Labor Force Survey (QFLS), published by Statistics South Africa just under two months ago shows that the official unemployment in the country stands at 32.6%. According to the data South Africa has over 7.9 million unemployed people and the number of people who are not economically active for reasons other than discouragement is at 13.3 million. The expanded definition of the unemployment sits at 42.4%. The economy is expected to stagnate at 0.2% this year, following 1.9% growth in 2022, before gradually recovering 1.8% by 2025. More employment gains are required to reduce the unemployment rate.

The importance of an integrated training & skills development ecosystem can never be overemphasized and prepare continuously for the Future of Work (FOW). We can prepare for this by encouraging for an integrated enterprise development and support ecosystem to improve the competitiveness & sustainability of enterprises, with a focus on SMMES through the creation of:

  • An environment conducive for entrepreneurship and sustainable enterprises
  • Encouraging the application of decent and productive workplace practices
  • Addressing sector-specific challenges through value chain and cluster upgrading which is linked to training and skills development along the value chain
  • Promoting technology & ways of doing business that are environmentally friendly
  • Integrating government support for formal and informal SMMEs, start-ups and cooperatives, with government as funder of first resort and funding linked to productivity outcomes

Ladies and Gentlemen looking at the statistics on South Africa competitiveness and forecast economic growth, it is clear that we have a long way to go. Taking into consideration the performance of South Africa, Productivity SA has the responsibility to contribute to South Africa’s socio-economic development and competitiveness. Productivity SA’s continued focus on SMMEs is further motivated by their potential to promote domestic-driven growth of new and existing industries and to strengthen the resilience of the economy in a competitive and challenging environment. Accordingly, SMMEs are crucial to the Future of Work (FoW), not just for employment creation and economic growth, but also to drive innovation and competition in markets. The SMMEs, and mostly informal SMMEs are also more likely to hire from traditionally economically marginalized groups with lower chances of finding employment such as youths, women, older workers, and less-skilled workers.

It is evident from research that SMMEs require focused Enterprise Development and Support Ecosystem and Programs 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 well-being of workers, as well as contribute to social well-being).

South Africa‘s innovative solution to transitioning 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. The intervention will also assist in resolving the high levels of informality, which results in high levels of unemployment, poverty, and inequality.

Identifying SMMEs, which constitute close to 90% of businesses in the country, in the NDP as a potential source of employment and as central to the Economic Reconstruction and Recovery Plan was a positive step. Acknowledging that the productivity of the industrial SMMEs sector is low and requires urgent attention should be the second most important step. Thank you very much