A Spatial Perspective

Policy Context Cabinet adopted the New Growth Path (NGP), a strategy promoting decent work and inclusive growth. A target was set nationally to grow employment by 5 million jobs by 2020 (around 3 million more than the anticipated growth if we extrapolated from 2002 to 2009) In order to achieve this target 5 key job drivers were determined The NGP recognises the urgent need to address the extraordinary divergences in terms of the spatial concentration of economic growth in South Africa The NGP outlines the fact that creating an enabling environment for rural employment will require the finalisation of a spatial perspective that sets out the opportunities available and the choices to consider in order to lay the basis for aligning government spending, infrastructure, housing investment and economic development initiatives. The National Infrastructure Plan was adopted in February 2012 to give effect to the NGP infrastructure driver

Jobs drivers Main economic sectors: Agriculture & agroprocessing Mining and beneficiation Manufacturing (IPAP2) Tourism/other services Infrastructure Energy, transport, communications, water, housing. Look for employment opportunities in “jobs drivers” and implement policies to take advantage of them Spatial opportunities: Rural development African regional development New economies: Green economy Knowledge economy Social capital: The social economy The public sector 3

NDP: Vision 2030 New Growth Path Infra-structure for employ-ment and develop-ment Economic sectors: Agricultural and mining value chains, manufacturing, tourism and high-level services Investing in social capital: The social economy and the public sector New economies: The green economy and the knowledge economy Spatial development: Rural development and African regional development Infrastructure Plan Outcome 4: Inclusive Growth deliverables Other economic sector implementation plans such as IPAP and IRP Social dialogue commitments: October 2012 Accord, Skills, Education, Local Procurement, Green Economy

Infrastructure The 1st jobs-driver is infrastructure: laying the basis for higher growth, inclusivity and job creation However, the pace of infrastructure development and spending on infrastructure is projected to fall from 9,1% of GDP currently to 8,1% of GDP (2013) Blockages include weak implementation capacity in parts of the state (with unspent monies) and poor project development planning Projects are not always strategic, integrated or aligned with national priorities Poor co-ordination slows projects and limits their impact

Infrastructure.... Through the : the Presidential Infrastructure Coordinating Commission (PICC) Government adopted an Infrastructure Plan that is intended to transform the economic landscape, create a significant numbers of new jobs, strengthen the delivery of basic services Establish a structure at the highest level to address the challenges through coordination, integration and accelerated implementation Develop a single common Infrastructure Plan that will be monitored and centrally driven Identify who is responsible and hold them to account Develop a 20-year planning framework beyond one administration to avoid stop-start patterns

Infrastructure .... Based on this work, 18 Strategic Integrated Projects(SIPs) have been developed and approved to support economic development and address service delivery in the poorest provinces. Each SIP comprises a large number of specific infrastructure components and programmes. An Infrastructure Book has been compiled, which contains more than 645 infrastructure projects across the country Infrastructure Bill developed and undergoing approval processes.

The Infrastructure Plan Initiatives 1. Catalytic 2. Enabling socio-economic devpt Greening the South African economy Electricity Generation Electricity Transmission and Distribution Integrated Municipal Infrastructure Integrated Urban Space and Public Transport Agro-logistics and rural Infrastructure Regional Integration Unlocking Northern mineral belt Durban-Free State-Gauteng Corridor Development South Eastern Node & Corridor Development Saldanha-Northern Cape Corridor Development 3. Crosscutting Access to communication technology, SKA and MeerKat National school build programme Higher Education Revitalisation of public hospitals Unlocking the economic opportunities in North West Province

Strategic Infrastructure Projects 18 Geographic Strategic Infrastructure Projects (SIPS) identified: SIP 1: Unlocking the Northern Mineral Belt with Waterberg as the Catalyst SIP 2: Durban- Free State– Gauteng Logistics and Industrial Corridor SIP 3: South Eastern node & corridor development SIP 4: Unlocking the economic opportunities in North West Province SIP 5: Saldanha-Northern Cape Development Corridor SIP 6: Integrated Municipal Infrastructure Project SIP 7: Integrated Urban Space and Public Transport Programme SIP 8: Green Energy in support of the South African economy SIP 9: Electricity Generation to support socio-economic development SIP 10: Electricity Transmission and distribution for all SIP 11: Agri-logistics and rural infrastructure SIP 12: Revitalisation of public hospitals and other health facilities SIP 13: National school build programme SIP 14: Higher Education Infrastructure SIP 15: Expanding access to communication technology SIP 16: SKA & Meerkat SIP 17: Regional Integration for African cooperation and development SIP 18: Water

Need for a Spatial Vision National Development Plan indicates that there is a need to tackle inherited spatial divisions as SA’s spatial structure perpetuates exclusion Distorted growth patterns cannot be ignored as they worsen economic and logistical inefficiencies Many places are not growing economically because of a lack of infrastructure, inadequate skills, poor innovation capacity and weak governance Locked-in potential of these areas could be released through targeted investment in economic and social infrastructure investment strategy

Spatial Economic Development Principles Principles of particular significant to economic development: Spatial Efficiency- Productive activity and job opportunities are optimised and burdens on business minimised. Efficient commuting patterns and circulation of goods and services will be supported with regulatory procedures that go impose unnecessary costs to development Spatial Justice- The historic policy of confining particular groups to limited space and the reverse of the unfair allocation of public resources.

Spatial Considerations Where would we support development in spaces, where is the potential? We need to understand demand and supply dynamics in rural areas spatially How do we shape/ unlock demand potential? Where is labour relative to demand ? Do we understand the distribution of skills across space We need to understand spatially supply potential in relation to national value -chains What is the potential for clusters if we know where demand is? How do we create better access to demand (markets)? Can we add value to the CWP and EPWP through the use of local inputs ... where will they be sourced (local procurement)? Where are the opportunities for productive activities in rural areas

Considerations cont... NGP sectors – based on labour-absorption Where are growth sectors (economic and labour absorption) What is the employment impact of sectors across space? Access to factors of production (land, water, labour etc) Comparative and competitive advantages of rural areas Migration patterns and labour sending areas Identify potential employment creating activities where demand is adequate to support growth Consider existing economic activities and what opportunities they provide in terms of skills, infrastructure, institutions and other resources or competencies What is constraining growth in areas and what can be done to address these constraints

Functional Economic Regions Project Overview (1) Beyond municipal boundaries and projects In support of the National Growth Path (NGP) and the National Development Plan, the Economic Development Department (EDD) is committed to grow employment by five million jobs by 2020. The main indicators of success will be jobs (number and quality), economic growth (rate, labour intensity), equity (lower income inequality and poverty) and sound environmental outcomes. In order to achieve the above, it is critical that: As a country we wisely utilise our valuable and scarce resources and target our limited capital and capacity in such a way that it maximises the creation of decent work opportunities; The State coordinates its efforts around core priorities that contribute to sustained expansion of economic opportunities and quality of life for its people;

Functional Regions Project Overview (2) To assist with the achievement of the NGP’s goal of 5 million new jobs by providing a spatial economic understanding of: Where the most new jobs can be created, in the shortest span of time, with the least new government investment/spending Where the same amount of government investment/spending can create the most new jobs Where huge investment can create large number of jobs

Functional Economic Regions Project Overview (3) Approach - Phase 1 (2013): International and local desktop research to inform the supra-national, national and sub-national context Focus on spatial economic understanding of key job drivers, spatial priority areas, issue based mapping, maximising impact, identifying & considering trends, and identifying trade offs Develop spatial economic scenarios given existing trends, understandings & visions and (1) explore and record their impact on the realisation of the key job- drivers, and (2) develop a decision-making tool to assist with determining priority areas (functional economic regions) for State and private sector investment and spending USE: Interviews, bi-lateral discussions and analyses of space economy and space economy interventions TO: Identify and describe categories /type of job-area-industry-people value chains & networks, as well as Identify and explore supportive case studies Consultation, collaboration… on-going Dissemination and enhancement of perspectives and decision-making and monitoring tool

Functional Region Project Overview (4) Create various entry points for ‘reading’ the space economy: i.e. Types of jobs (self employment, high skills, low skills). Jobs linked to growth path (short term public employment schemes...) Types of regional economies (regional industrial economies, rural economies e.g. Grant based, agri-based, Mining based etc. Types of rural economies (high level socio-economic profile with enables/ constraints) and what are the typical conditions for take off and game changes that currently and could effect change. What are typical place based constraints associated with different rural economies. What are the high level/ dominant value chains? Types of areas (rural small towns, dense rural settlements, dense urban townships) - Consider networks of places. Investment relationships national, regional and international Types of people (Types of people/institutions, including the State. Typical industries/sectors (take off time, impact, enablers required) Types of networks (Sector growth and decline linked to place (e.g. Although tourism is a growing sector nationally some local areas it is declining) Types of sectors & industries & value chains Focus on interactions between places/jobs/people/institutions/sectors

Rationale for the Functional economic Regions Initiative (1) This initiative is critical to EDDs mandate for the following key reasons:   Development of spatial economic perspective that will essentially underpin the SIP programme and provide the economic layer to the National Spatial Framework To create space for cross-boundary planning. Allowing municipalities that configure into functional economic regions to collectively plan catalytic interventions To be provide a basis for structures such as the MINMEC, Infrastructure Cluster and the PICC, to prioritise of high Impact infrastructure investment across the country To provide a basis for EDD to proactively determine intervention areas to ensure the impact of strategic economic interventions of the Department are maximised

Rationale for the Functional Economic Regions Initiative (2)   To enable the potential basis for Provincial Economic Development Departments to support economic planning on a regional basis with Provinces strengthening the economic component of the PGDS Addressing development of the former Bantustan (23 Districts) areas within a broader economic context Providing a spatial platform for scaling up jobs by maximising opportunities resulting from high impact initiatives To provide an economic context/ platform for key spatial initiatives of government such as the SIP, IDZ and new SEZ and RIDS programme

Proposed Regional LED Approach Based on functional economic regions, the intention is that EDD will follow regional approach to LED Coordinate actors and create a platform for partnerships i.e. Districts that relate to a functional economic region to identify, engage on and prioritise high impact cross-cutting interventions that affect the broader region identified Implications of the main çross-boundary economic value-chains as they relate to the functional economic regions will be examined in order to consider opportunities to spread economic opportunities. Provincial Departments Economic Development can potentially drive this coordination that will fit into the IDP cycle so that reviewed IDPs factor in these priorities The result will be: improved cross-boundary planning and projects/ initiatives supported across municipal boundaries more sustainable catalytic projects that take broader market issues into account more holistic approach to the development of rural areas as they relate to their urban centres/ nodes Proposed Regional LED Approach

Local and regional focus Regional Economies – i.e. Regional industrial economies, rural economies e.g. grant based, agri-based, Mining based etc. , types of rural economies and what are the typical conditions for take off and game changes Local and regional focus Resource critical areas Green economy zones Competitive growth & job centres Regional growth & service centres Rural restructuring Resource based growth regions Competitiveness and Regional corridors Special zones – employment decline, vulnerability (i.e. mining) Regional Economies i.e.

Understanding areas in terms of spatial & temporal trends – i. e Understanding areas in terms of spatial & temporal trends – i.e. trends of growth & decline of economic activity identifying special intervention areas…

Jobs & employment – spatial trends and dynamics, and how that relate to specific job drivers – i.e. trends of growth & decline of employment in identifying special intervention areas…

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