A proposed industrial growth initiative by the local aviation manufacturing industry can potentially serve as a showcase for how South Africa can stimulate its industrial sectors and how it should respond to their digital transformation, Commercial Aerospace Manufacturing Association of South Africa (Camasa) avers.
Camasa co-chairperson and Aerosud South Africa MD Johan Steyn highlights that a study by the association and its members found that the advanced manufacturing subsector can double its yearly export of high-value and value-added products sustainably by R3-billion if it secures about R3-billion in stimulus funding over five years.
There are about 100 identified opportunities to develop exports within the aviation manufacturing industry, and most of them lie in creating and incubating startups, which also aids transformation in a high-skills industry.
While the majority of the R3-billion industry turnover is generated mainly by five companies, there are significant opportunities and demand worldwide to produce and sell more aviation and advanced manufactured goods, says Steyn.
Supporting the creation of small businesses using the funding will provide the most sustainable impact and some can be established to supply into the production chains of current aviation manufacturers in South Africa.
Further business opportunities will also arise for these advanced manufacturing companies to expand their range of products and services for international clients, once the companies have successfully been incubated.
“Creating opportunities is the easiest way to facilitate transformation. It is ten times easier to grow if there is also a well-understood and supported plan,” he adds.
The advanced aviation manufacturing industry currently employs about 3 000 people; the proposed initiative foresees this workforce growing by 2 000 people to support the expanded production capacity.
Of greater significance than the impact of the small number of jobs created is determining the character that industrial stimulus and support should take to be effective, including the implications of digital technologies in advanced manufacturing and the broader industrial economy.
“Some of the barriers to industrial development is the complexity of accessing incentives and funding. It can take up to two years to access even relatively minor funding from existing industrial incentives.”
One of the biggest barriers facing the industry and the broader industrial sectors is the inability of government structures to execute their functions, says Steyn.
“South Africa has great policies, but we are not getting results. The only way that industrial development can occur is if there is a working partnership between the public and private sectors.”
Multiple stakeholders lead to competing drives and objectives, which is why there needs to be a broadly agreed upon working framework to make any industrial development initiatives a success. This framework must also be quickly adapted if it proves unsuccessful and a new approach developed using information from the participants, he explains.
In this regard, Camasa has formulated a public–private growth initiative (PPGI), and the association is part of the Presidential Working Group on growth.
The association believes that the Department of Trade and Industry can be the face of government’s interventions in industry, especially in manufacturing and advanced manufacturing.
“Creating a one-stop solution, where companies applying for incentives can get a ‘yes’ or ‘no’ answer within a short time, will help to speed up the use of incentives and encourage their uptake while adhering to State policies.”
The aviation subsector can arguably be seen as the leader in advanced manufacturing in South Africa and, partly owing to its international exposure, is grappling with digital transformation while adhering to international standards and processes.
A focused approach that hones in on what can be done in the short term and then over the medium term is required, explains Steyn.
“The aviation manufacturing industry can serve as a showcase of what can work, but we have to take a ‘fail fast’ and ‘fail forward’ approach so that any industrial development initiatives do not get bogged down or become irrelevant over time.”
Initial gains from a successful industrial development programme will also reach into the industry’s suppliers and supporting industries, such as stimulating titanium additive manufacturing, and leading to the creation of companies such as Gauteng-based additive manufacturing company Aeroswift.
If the initiative is successful, it will help to win over apathetic industry leaders and investors, and can lead to a much swifter growth in investments, but only if success is achieved, he adds.
With the severe, and possibly terminal, damage done to various State-owned enterprises, including those in the aviation industry, only successful cooperation between the private and public sectors can overcome the barriers to growth and development, concludes Steyn.