Cluster initiatives at provincial level could play an important role in improving the competitiveness of South Africa’s logistics and supply chain sector, Christian Ketels of the Harvard Business School’s Institute for Strategy and Competitiveness said this week.
Ketels was speaking at the second in a series of supply chain and logistics programmes offered in partnership by JSE-listed Imperial Holdings subsidiary Imperial Logistics and the Gordon Institute of Business Science (Gibs) under the theme ‘Competitiveness in a changing global economy’.
He stated that clusters could serve as a process instrument, offering an opportunity for companies, government and academic institutions to collaborate in finding solutions to challenges that faced the logistics industry, which included a shortage of skills and infrastructure, high operating costs and strict government regulations.
“Cluster initiatives aim to create a dialogue, not just on the high level, but on many technical issues, including what type of logistical infrastructure is needed and what type of investment should be made,” Ketels said, adding that such an approach would place companies in the driving seat.
“It intends to change the policy process to a bottom-up kind of a process that involves companies much more; different from traditional lobbying,” he noted.
Ketels said an effective allocation of responsibilities and capabilities that enabled provinces to define their strategy and upgrade their competitiveness effectively was required.
“National government does manage national policies, but as you go to the microeconomic business environment, including clusters in infrastructure, skills and regulations, it is really different levels of government that are important.”
He added that South Africa ought to look at the specific data it had on current economic geographic patterns to determine what barriers were preventing clusters from emerging.
Associate director at KPMG and member of the Gibs faculty, Dinesh Kumar, said South Africa was between five to seven years behind Europe’s lead in terms of clustering in general logistics.
“What we look for is public–private partnerships to make this happen in terms of cluster involvement,” he noted.
Meanwhile, Imperial Logistics chief integration officer Cobus Rossouw said that trade barriers had to be overcome for the logistics and supply chain sector in South Africa to prosper.
“Some of the difficulties in doing business in South Africa include government regulations, banking and taxes. We have to make it easier to do business. In Southern Africa, among the biggest changes required is access across borders; we need to fix a few practical things to make ourselves more efficient,” Rossouw noted.
A recent competitiveness survey done by the Wold Bank ranked South Africa 35th out of 183 countries on the ease of doing business index.