Improving competitiveness can also drive exports to the rest of the continent
South Africa’s social stability can be directly linked to the competitiveness of the manufacturing and construction sectors.  This is according to Kharti Pillay, who is Director in Risk Advisory, and Leader of the Manufacturing Industry at professional services firm Deloitte.

Pillay points out that South Africa needs to undertake comprehensive social research to understand whether crimes committed have a direct link to people who experience prolonged, or even uninterrupted, periods of unemployment. “We need to think of manufacturing as more than just being about the bottom line and see it as crucial contributor to livelihood which in turn contributes to social stability” says Pillay, who notes that people with jobs have an improved sense of self-esteem and an improved outlook for their future…a sense of “purpose”.

Pillay also points out that manufacturing is the force behind the growth of all successful major economies that have transformed from developing to developed economies.  Pillay emphasises out that in South Africa’s case, improving competitiveness is crucial to keeping approximately 1,8 million people employed by the manufacturing sectors. If competitiveness remains stagnant or worse, deteriorates, some of those people would lose their jobs and add to the 4,7 million people who are already without jobs. Pillay argues that such a development would fuel social instability. Businesses therefore have a role to play in maintaining social stability as well.

Pillay notes that improving productivity has to be a combined effort between government, business and labour. The process starts with improvement of infrastructure such as safe and reliable public transport to reduce the time and cost of travelling. The next step is improvement in training and skills development to improve overall productivity. “This means that as a country we have to review our investment priorities” says Pillay, Another crucial step, according to Pillay, calls for the review of the mandate of government agencies tasked with supporting the growth of the manufacturing sector.
Pillay notes that once these conditions are in place, South Africa can choose which areas of manufacturing it excels in and vigorously focus on growing these strategic areas. “We need to decide what we are going to be famous for producing and do it well” he says.

Pillay argues that South Africa needs to have a deeper appreciation of the manufacturing sector, as its ability to produce tangible goods means it creates “purposeful jobs” that instil a sense of pride.  Pillay says improving competitiveness can also help drive exports into the African continent. Two areas in which South Africa can tap into are agro processing to help Africa’s agriculture economies to process their own produce as well as packaging.
Another reason for improving competitiveness is that South Africa can no longer see itself as the “gate way to Africa” because geographically other countries are located closer to developed markets and a number of countries on the continent are emerging as competitors on the status of “gate way to Africa”.  These include Kenya, which is already attracting a number of large multinationals to set up offices, and Ghana and Nigeria in West Africa.
“Africa presents competition right on our doorstep, so we either have to take advantage of that opportunity or we will have it taken away from us.

The world is getting smaller and at any given point we are competing on an international scale for foreign investments. It is excellent to see Government and Business having discussions about improving our competitiveness, its crucial we  that we prioritise competitiveness more urgently than ever before or face what could be a less optimistic future.” says Pillay.