South Africa needs a radical change in its approach to local economic development. Beyond social security and central government transfers, each district and local municipal area needs a clear plan to attract investment and create jobs.
These plans should address the two facets of economic sophistication. The first is to increase the range of products and services offered. Reliance on just one product or service should be reduced. The second is an emphasis on developing own technologies and processed goods. Selling a pig is one thing: developing and deploying technologies for processing pork products to increase value is another.
South Africa cannot create sustainable employment through its existing Expanded Public Works Programmes. These involve the central government funding temporary low skill jobs: filling potholes, construction, picking up trash, sweeping and even clerical work. The aim is to get people economically active. However, these programmes are never linked to a process of skill formation that propels medium to high-tech industrial activity.
For any local economy to be resilient, it must have the local skills – including those of an entrepreneurial nature – in sufficient quantities to support the creation of local industries. These can supply products and services to the surrounding towns, neighbouring provinces and countries. Simply put, to grow a local economy you must trade with the people who are closest to you geographically and are not too advanced technologically.
Scoping local market and regional opportunities