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an initiative by Brand South Africa

South African Competitiveness Forum

Research & Outcome Report

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an initiative by Brand South Africa.


FOREWORD

During 2013, Brand South Africa, the official marketing agency of South Africa, embarked on a major project, namely to host the inaugural South African Competitiveness Forum. On the 5th of November 2013, Brand South Africa successfully hosted this Forum, at Gallagher Estate. While the South African Competitiveness Forum took place on 5 November, the journey and development of the concept of the forum began long before then.

It started in 2011, when Brand South Africa identified the need to develop a national platform where issues pertaining to nation brand competitiveness and reputation can be addressed in a multi-stakeholder environment.

As a democratic, free, open society the South Africa we inhabit today is a diverse collage of unique geographical, cultural, economic, social, linguistic, and historical features. This is a nation of world renowned leaders, globally respected business personalities, innovators, thinkers, actors, and poets. The challenge Brand South Africa set itself with the South African Competitiveness Forum was to create a platform where the people, businesses, civil society, and government officials that make South Africa work, can share insight, and help to shape the story of the brand.

This report captures the full spectrum of the design and concept, the regional and specialist consultations, events, research, and ultimate outcomes of the inaugural South African Competitiveness Forum. Brand South Africa constantly strives to build a comprehensive, inclusive, and compelling brand positioning that does justice to the message of an inspiring nation at the southern tip of the African continent. To quote from the Address with which Deputy President Kgalema Motlanthe opened the Forum,

“By acting in concert this forum may prove to be an invaluable tool in the identification, management and minimisation of risks in governance, delivery systems, institutional arrangements and other existing procedures… We would like to believe that through social dialogue and social compact, the South African Competitiveness Forum will be a strategic platform for South Africans to engage reflectively on conditions and issues upon which is predicated our development.”

We believe that this Special Research Report on the full spectrum of activities that fed into, and ultimately made it a resounding success, will prove that the South African Competitiveness Forum is to remain a strategic platform on the Brand South Africa annual calendar. Through this initiative we call on all South Africans to play their part and engage in collaborative efforts to build a strong national reputation, based on a globally competitive economy.

Ms Chichi Maponya Chairman – Brand South Africa

Contents

Foreword – Ms Chichi Maponya, Chairman - Brand South Africa 3

Part 1 – Setting the scene 4 • Introduction–MillerM.Matola,CEO-BrandSouthAfrica 6 • TheCompetitivenessForumconceptanddesign–DrPetrusdeKock, Research Manager - Brand South Africa

Part2–ThePre-SouthAfricanCompetitivenessForumprogramme • LaunchoftheCompetitivenessForum 9 • eNCAdiscussionon50yearsofPan-AfricanismandimpactofAfrican integrationonregionalcompetitiveness • HighlightsfromBrandSouthAfricaregionalconsultationsandspecialprogrammes 10 • EasternCape–consultationreport 12 • Gauteng–consultationreport 13 • WesternCape–consultationreport 15 • KwaZulu-Natal–consultationreport 16 • Outcomesandstrategicrelationshipsestablished 17

Part3–OutcomeReport:SouthAfricanCompetitivenessForum–5November2013 • OpeningremarksbyMsChichiMaponya 19 • WelcomeandsettingthecontextbyMinisterCollinsChabane 20 • AddressbyHEDeputyPresidentKgalemaMotlanthe 21 • 20yearsofprogressbyColinColeman,GoldmanSachs 22 • Breakawaysessionhighlights • Education,SkillsandLabour 25 • Manufacturing 28 • ForeignDirectInvestmentCompetitiveness 30 • Infrastructure 32 • Governanceandleadership 34

ConclusionsandKeyThemesfromthe2013Forum 39

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While we conducted these consultations, Brand South Africa also worked extensively with several content partners, who shared sector-specific insight and advice to Brand South Africa. I once again want to take this moment to acknowledge and thank:

• TheReputationInstitute • Deloitte • ManufacturingCircle • ProudlySouthAfrican • NationalPlanningCommission • PMRAfrica • WitsBusinessSchool • InternationalWomen’sForum • DepartmentofTradeandIndustry

Each of these organisations shared views, exchanged research, or played an active role in the preparatory phases of the forum to ensure that accurate, up to date information regarding sector-specific issues are absorbed to inform breakaway session discussions. More on this in the detailed session reports below.

On behalf of Brand South Africa, I also want to thank the moderators of the Breakaway working sessions, the panellists, and delegates who helped us to tell the inspiring South African story. We will sustain the conversation, and actively work with you to position South Africa as an inspiring, competitive, reputable, African brand.

Miller M. MatolaCEO – Brand South Africa

INTRODUCTION

Brand South Africa set out to design the South African Competitiveness Forum as a strategic platform through which to consult and work with government, business and civil society stakeholders to identify the competitive and reputational strengths, and challenges the brand faces.

Brand South Africa believes that through such quality interactions with its stakeholders we, as an organisation, can be better equipped to design communications, marketing, thought leader and a range of other activities to create a truly competitive positioning for the country in international markets and at home.

Furthermore, Brand South Africa set out to bring to life a forum where, through shared insight, actions can be decided on that may, if taken incrementally and systematically over time, contribute directly and substantially to improving competitiveness and reputation.

Butwhatistheoutcomeofthis?BrandSouthAfricabelievesthattherealisationofthecountry’sdevelopmental, social, transformational and economic objectives can benefit tremendously from a strong reputation and a competitive positioning in a rapidly changing and volatile global economy.

Research and stakeholder engagements conducted by Brand South Africa in preparation for the South African Competitiveness Forum took the long-term objectives identified in the National Development Plan into consideration. The purpose of this was to locate the discussions on reputationandcompetitivenessinthebroadcontextofthecountry’slong-termdevelopmentalobjectives as set out in the NDP.

This report shares with South Africans and our international stakeholders, investors, global South Africans, and those interested in the future of this nation, the journey of the forum, the key outcomes, and suggested actions agreed to by participants in the forum discussions.

However, all of these discussions mean little without actions. Only by taking action on our own decisions can South Africans be active participants in changing what needs fixing, and to further enhance and develop the areas where the nation brand, and South Africans are strong.

Since officially launching the South African Competitiveness Forum in July 2013, Brand South Africa has conducted consultation and research reference groups with business, government and civil society stakeholders in the Eastern Cape, Western Cape, Gauteng, and KwaZulu-Natal. Admittedly, these networks and engagements can be expanded in future, but as a somewhat experimental first for the organisation we truly hope and believe that we did our best to gather and absorb as much insight and perspectives of all stakeholders.

Valuable insight regarding matters of regional importance has been shared with the Brand South Africa team. These insights were absorbed into comprehensive background briefing documents shared with delegates in preparation for the forum hosted on 5 November at Gallagher Estate, Midrand. These and related matters will be addressed in more detail in the Research Outcome Report sections below.

Part 1 – Setting the scene

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• Infrastructure • ManufacturingandRelatedServices • GovernanceandLeadership

Each of these sessions kicked off with a conversation starter panel discussion. Following on the panel discussion the session became an open workshop where delegates and panellists were asked to provide input on six issues Brand South Africa wanted insight on. In terms of issues, Brand South Africa had no prescription in terms of ideas raised by delegates in the breakaway sessions.

To ensure Brand South Africa received input on the themes under consideration, the breakaway sessions were asked to discuss and develop responses to the following elements:

> National/International reputation in relation to session theme > National/International competitiveness in relation to session theme > Sector-specific issues related to the theme of the breakaway session > Factors that impact positively and negatively on all the above > Recommendations and executable actions to rectify what is wrong, and to enhance and leverage off that which is recognised as competitive and reputational strengths > Possible country messaging and proof points for Brand South Africa Domestic and International communications

Clearly these elements were only intended as a framework for the discussion, and to enable delegates to provide Brand South Africa with specific and preferably actionable proposals in relation to the session theme.

The intention of the above methodological design was to ensure maximum stakeholder input in the breakaway working sessions. This format turned out to be productive, and at the end of the day the breakaway sessions each reported back to the main plenary with specific issues and recommendations. The latter are captured in more detailed session reports below.

In planning for this Competitiveness Forum – which is a first for our country – Brand South Africa was mindful of significant changes that have taken place in the global economic and political environments in the past decade.

THE COMPETITIVENESS FORUM CONCEPT AND DESIGN

SouthAfrica’sdemocracyasweknowittodayisaresultofmanyyearsofintensenegotiations.BrandSouthAfricatookSouthAfricaandhercitizens’abilitytoengageinopenandfrankdiscussionsregarding issues that impact on the nation, and ultimately the brand, as an inspiration in the design of the programme.

Unlike regular conferences, where delegates absorb presentations and may sometimes suffer ‘paper fatigue’,BrandSouthAfricadecidedtodesigntheregionalconsultations,aswellastheprogrammeof the forum hosted on 5 November, to maximise input by, and interaction among, delegates. By applying this method throughout the programme, Brand South Africa managed to gather tremendously rich and diverse views. New valuable relationships were forged in the process as well, and Brand South Africa will continue to interact through its provincial engagement mechanisms.

On the day of the forum, 5 November, the programme was opened by Deputy President Kgalema Motlanthe. This was followed by a presentation by Colin Coleman, from Goldman Sachs, on progress and change in South Africa in twenty years since 1994. This set the scene for the work of the forum to begin in all earnest.

In his opening Address, Deputy President Kgalema Motlanthe indicated that, “As a first of its kind in South Africa, this forum will give leaders from all spheres a platform for debating our country’scompetitiveness,aswellasarrivingatcommonunderstandingofhowtoimprovethecompetitiveness of our economy. This forum will harness the collective wisdom of various sector leaders in an effort to meet the quality standards of the local and world markets.”

The Deputy President challenged delegates to the forum by asking that, “…we trust that you will help us answer some of the questions on the following areas:

• WhethertheskillsdevelopedinSouthAfricaarepositionedtoaddresstheneedsofindustryin future and how we can realise the goals for education, skills development and job creation outlined in the NDP; • Whatinterventionsarenecessarytoexpandmanufacturingandservicesectorthatcreates employment opportunities, in particular for youth; • Howwecanimprovethequalityofinstitutionsandsystemsinkeyareaswheregovernance impacts on competitiveness; • HowwecangiveeffecttotheNationalDevelopmentPlanwiththeaimofaddressingcritical social and economic infrastructure the country needs; • WhatissuesrelatedtoFDIandSouthAfrica’scompetitivestrengthscanhelppositionthe country effectively as an investment destination.

Allow me to conclude by stating that the achievement of sustainable competitiveness has never been a more pressing challenge for South Africa.”

With this challenge the South African Competitiveness Forum set out to rise to the occasion. At this point the programme went into the breakaway working sessions on:

• FDICompetitiveness • Education,SkillsandLabour

South African Competitiveness Forum OutcomesReport Back Box1

The overall outcomes of the forum are reflected below, with specific report back points on each: • Outcome1:ForumWorkingGroupandSessionReportswithspecificrecommendationsandimplementableactionstepsto enhance competitiveness.

Report Back: This outcome has been achieved – detailed reports and recommendations included in Part 2 below • Outcome2:MinisterialDebriefingandFinalAnalyticalReportPresentationtoMinistryofPerformanceMonitoringandEvaluation;

Report Back: Comprehensive South African Competitiveness Forum outcome report to be presented to Minister in the Presidency for Performance Monitoring and Evaluation January 2014. For public release on the day as well. • Outcome3:InitiateworkandsolicitinputonthedevelopmentofaSouthAfricauniquecompetitivenessindex;

Report Back: Several inputs regarding this received during regional consultations and at the forum. Brand South Africa plans to host a special Research Reference Group in 2014 to bring stakeholders that have already given specific input in this regard together to initiate concept design/framework proposal. • Outcome4:Extractinputsandproof-pointsformessagingonSouthAfrica’sreputationandcompetitiveness;

ReportBack:BrandSouthAfrica’sSouthAfricanCompetitivenessForumdeliveredtremendousinsight,information,andpossiblecasesforincorporation in country messaging. Specific country messaging recommendations included in breakaway session reports.

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For example, the global financial crisis that started in 2008 had a decided impact on the economic outlook of several nations. In this period, the importance of developing nations, as drivers of global growth, has been widely acknowledged. Hence, when engaging with the specific themes in the breakaway sessions, delegates were asked to be mindful of rapid changes to the global economy and technology in the 21st century, and how these may also impact on our competitiveness and reputationasacountry.SouthAfrica’smembershipoftheBRICSanditscontributiontoeffortsatdevelopingAfrica’sregionalinfrastructurenetworksfeaturedasissuesinpreparatorydiscussions, as well as the proceedings of the day.

As an organisation tasked with the international marketing of the country, Brand South Africa is aware of the manner in which the 21st century has thrust rapid changes to technology, global economic and social circumstances into reality. More importantly, nation brand marketing in international environments has become an increasingly competitive endeavour as countries vie for FDI, trade opportunities, and new expanding markets.

For this reason Brand South Africa positioned the competitiveness forum as a knowledge and insightsharing platform. Input and views gathered throughout the process created a rich pool of information,case studies and research which Brand South Africa can utilise as we build a comprehensive country value proposition. In a dynamic international market, and in a country where major social, economic and demographic changes have taken place in a short space of twenty years of democracy, Brand South Africa felt compelled to draw insight from the very inspiring people that make this country a reality through their work, expertise, knowledge, and commitment.

Part 2 of the report below takes you on the journey of the forum from its launch on 25 July 2013 and through highlights of the regional consultations.

Dr Petrus de KockResearch Manager – Brand South Africa

Part 2 of the report presents highlights of the launch, and regional consultation process Brand South Africa engaged in from July 2013. In its design the South African Competitiveness Forum emphasised consultative interaction with stakeholders. This methodology is supported by the understanding that the international marketing of the nation brand has to reflect the actual strengths and unique features of thebrand’sconstituentparts,andsubbrands.

LAUNCH OF THE COMPETITIVENESS FORUM AND eNCA DISCUSSION ON 50 YEARS OF PAN-AFRICANISM AND AFRICAN INTEGRATION

To mark the official launch of the South African Competitiveness Forum, and to open the phase ofregionalconsultations,BrandSouthAfricahostedapaneldiscussionfacilitatedbyENCA’sChrisMaroleng on Thursday, July 25 at the Hyatt Regency Hotel in Rosebank.

Theevening’sproceedingswereopenedbyMinisterCollinsChabane,MinisterinthePresidencyforPerformance Monitoring and Evaluation.

The purpose of the panel discussion was to facilitate the engagement of a rigorous debate on expectationsforAfrica’sintegrationprocessinthenextfiftyyears.Thepanelmemberswereasfollows:

• AmbassadorPatrickWamoto;HighCommissioneroftheRepublicofKenyatoSouthAfrica •MrEbrimaFaal;RegionalDirector,AfricanDevelopmentBank •MrStanleySubramoney;PWC,ChairmanNepadBusinessFoundation • DrEssopPahad;FormerMinisterinthePresidency,EditorofTheThinkermagazine

PanelBriefingNote

The panel discussion primarily focused on the future of African integration, and linked to it a broader question concerning how improved infrastructure and regional integration initiatives can further enhance the competitiveness of African economies.

During 2013 the African continent will celebrate 50 years since the creation of the Organisation of African Unity (OAU). The OAU, created in the heyday of African struggles for liberation from colonial rule, and its successor, the African Union (AU), stand as institutional symbols of liberation, integration, and development of the continent. However, the African continent has changed dramatically in the past 50 years. The panel was asked to reflect on the above advances, and based on that, to extrapolate and discuss expectations for the next 50 years of African integration and the Pan African agenda.

Part 2 – The Pre-South African Competitiveness Forum Programme

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HIGHLIGHTS FROM REGIONAL CONSULTATIONS AND SPECIAL PROGRAMMES

A series of regional consultations, with the purpose to reach out to stakeholders in 4 key regions of the country, preceded the Competitiveness Forum hosted on 5 November.

As explained in the concept of the Forum, the main purpose of the consultations was to gather input into the programme, and to identify unique competitiveness issues that distinguish the regions. As outlined below, the key themes from the consultations predominantly speak to themes such as: education and skills; infrastructure; competitiveness enablers and challenges in regions; country messaging and – importantly – the consultative relationship between Brand South Africa, provinces, metros, and other regions of the country.

KeyLearningforBrandSouthAfrica:

The strength and unique positioning of the nation brand in domestic and global environments depend on the input from, and underlying strength of, the components/constituent parts of the nation brand. BrandSouthAfrica’snew2014/15BusinessPlanaimstoaddressthisissuebyworkingcloselywithregional stakeholders to design consultative platforms for knowledge sharing, Nation Brand CI and Country Messaging input from Brand South Africa.

As part of the background research, Brand South Africa, for example, shared findings of the 2013 City BrandIndexwithdelegatesinsessions.ThestrengthandattractivenessofSouthAfrica’scitybrandscontributes much to the overall international perception of the country, its people, and what it offers its citizens and the world.

OverallfindingsonSouthAfricanCities:Johannesburg,CapeTown,DurbanAnholt Gfk-Roper City Brand Index (CBI) – 2013

• DespiteSouthAfricancitiesfacingreputationalchallenges,theyarebecomingcompetitive, as seen with a significant increase in their overall CBI scores.

• Johannesburg,CapeTownandDurbaneachhaveselectadvantagesovertheircompetitors Rio de Janeiro, Beijing and Mumbai.

• India’soverallopiniontowardsallthreecitiesisthewarmest,rankingCapeTownand Johannesburg in the top-half (above 25th position) and Durban 36th.

• Allthreecitiesareassociatedwith‘naturalbeauty’and‘culturaldiversity’;inaddition,the peopleareseenas‘hardworking’,‘respectfuloftraditions’,‘happy’,‘easy-going’and ‘energetic’.

• Americanopinionsonthethreecitiesaremorepositivethisyear,rankingthemhigher on Potential.

• RussiansscoredthethreeSouthAfricancitieslowerthisyear,withDurbanscoringthe lowestacrossallthedimensions.Inparticular,Russiascoredthecities’Pulsethelowest, while South Koreans ranked the three cities low in Prerequisites.

• CapeTownandDurbanleadthegrouponcleanliness(both33rd),withJohannesburg trailing close behind (35th).

• Youthaged18-29hasaslightlyhigherratingthantheglobalaverageonmostof the average.

• JohannesburgisonlysecondtoBeijingincompetitivenessinregardstoeducation quality; 10 positions ahead of Mumbai and 5 ahead of Rio.

• AllthreecitiesbeatBeijingandMumbaiinthelabourmarketandeaseofdoingbusiness.

• AllthreeSouthAfricancitiessufferfromlow‘familiarity ’,allrankinginthebottom-10, trailing Mumbai, Rio de Janeiro and Beijing. Positively, Cape Town and Johannesburg both outshine Mumbai on global contributions.

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East London Consultation 30 August 2013 Key Themes, Comments and Actions by Brand South Africa

Theme CommentsfromDelegates

Infrastructure • Notedwithconcernthefactthateventhoughmuchisbeingsaidaboutnational infrastructure build programmes, the Eastern Cape remains in need of road, rail and port infrastructure interventions.

Labourandsocio-economicissues • SeemsasifstrikeshaveincreasedinnumberinSouthAfrica.Levelsofviolencealso higher during strikes. • ThiscomesatatimewhenthemediaarealsoreportingonstraininSouthAfrica’s collective bargaining platforms. • ThiscommenthighlightedtheconcernthatstrainedlabourrelationsinSouthAfrican economy have a direct and potentially adverse impact on GDP.

SouthAfrica’sBRICSmembership • Aparticipantaskedwhethertheremightbeanylong-termcostsassociatedwith SouthAfrica’sBRICSmembership.• Thediscussionthatfollowedfocusedmainlyonthepositiveoutcomes:43%of world population included in BRICS; growing awareness of South Africa in BRICS markets as evidenced in tourist arrivals, and increased trade and investment activities; increased bilateral agreements and focus on delivering on promise of BRICS by members; BRICS Development Bank.

Competitiveness of state-owned enterprises

• PrivatecompaniesinSouthAfricahavetosubmitbidsfortendersandprojectsina highly competitive economic environment. An example was given of the cost companies have to absorb when developing submissions for government tenders/ projects of a more technical nature.• Theissue/questionistowhatextentstate-ownedenterprisesarerequiredtobe competitive. The overall impression is of inefficiency. • Thisraisesacrucialquestionregardingtheroleofstate-ownedenterprisesin enhancing country competitiveness.

NDP-related comments • SomecommentsfromparticipantsindicatedthatgoalsoftheNDPshouldalsobe reflectedinbusiness‘constitutions’andbusinessplanssothattheideals,goalsand objectives of NDP become the standard against which business conducts itself. • BusinesshasacriticalroletoplayinmakingpartsofthevisionoftheNDPareality; this therefore necessitates high-level business engagement and involvement in realising specific goals.

Awareness of Brand South Africa in regions/provinces

• AparticipantnotedthatthiswasthefirsttimehehadeverheardofBrandSouth Africa. In certain sectors Brand South Africa is known, but it is clearly necessary to raiseawarenessofBrandSouthAfricainregionsoutsideofSouthAfrica’smain economic hubs.• Suchinputandconsultationsessions(inthiscasefocusedontheSouthAfrican Competitiveness Forum) can be regional platforms through which Brand South Africa can profile itself and its work. • AparticipantindicatedthatBrandSouthAfricacanbenefitfromworkingcloser with local government, rather than national government.

Comment on education • Aparticipantraisedsomeconcernsregardingthelackofjobopportunitiesfor young South Africans once they graduate from tertiary education institutions.

GAUTENG RESEARCH REFERENCE GROUP CONSULTATION HIGHLIGHTS – 4 SEPTEMBER 2013

Theme:SouthAfrica’sCompetitiveness–aprogrammedevelopmentandinputworkshop

This was the largest of all the consultation sessions. It attracted nearly fifty participants. This research reference group also experimented with the programme design of the forum by breaking the session into small commissions tasked with discussing issues, and the approach to be taken to the design of the breakaway working sessions. Based on input gathered from delegates on the day it was decided that the breakaway session workshop format is a workable solution to conducting an intensive consultation with stakeholders on the Forum held on 5 November 2013. Representatives from the following organisations and content partners participated in the day: Deloitte; Reputation Institute; Unisa; Institute for Global Dialogue; Manufacturing Circle; Wits Business School; WWF; NERSA; and several others.

In terms of themes and issues in the discussion some issues specific to Gauteng, and the forum itself, came to the fore. Note, however, that the themes of education, infrastructure, and the development of a country performance tracking index were unique features of this consultation session. The manufacturing discussion at this reference group, together with consultations with the Department of TradeandIndustry,helpedshapeandfocusthediscussiononSouthAfrica’sreputationinrelationtoitsmanufacturing capabilities.

Although the day was packed with insightful discussions, the table below captures some of the key points that came through the consultation.

Gauteng Consultation 4 September 2013


Infrastructure and Messaging • GivenSouthAfrica’srelativelyadvancedinfrastructureintheSADCregion, it positions the country well as an export-import, trans-shipment, air freight and related services hub. The latter recommended as key country messaging point.• Itwas,however,indicatedthatpolicytalkrelatingtotheNationalInfrastructurePlan should be translated into actions. Participants also indicated that in order to develop infrastructure further it will be necessary to identify whether the country has sufficient skills to deliver on the infrastructure promises.

Labourandsocio-economicissues • Delegateshighlightedtheneedtodevelopagloballycompetitiveeducation system that is flexible and agile enough to respond to the changing demands of the economy. • Itwasnotedthatrapidadvancesintechnologyrequireaworkforcethatisableto adapt and respond to these changes in order to remain relevant and competitive in the global economy. Therefore, providing a workforce that is productive and analytical is an important aspect of the education system in South Africa.• Toachievetheaboveitwasrecommendedthatthepoliticaleconomicdynamic between government, trade unions and civil society needs to be reconfigured to address some of the structural challenges that constrict the development of a globally competitive education system.

EASTERN CAPE RESEARCH REFERENCE GROUP CONSULTATION HIGHLIGHTS – 30 AUGUST 2013


On 30 August 2013 Brand South Africa invited stakeholders to participate in a discussion on the plannedSouthAfricancompetitivenessforum.ThisispartofBrandSouthAfrica’soutreachbeforetheforum to gather inputs and perspective on issues to be addressed.

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Specific education-related recommendations

• Roadmaptobedevelopedtoprofessionalisetheteachingprofession.• Needgreateralignmentbetweengovernment,businessandcivilsociety in the education sector. • Developarepositoryofinterventionsintheeducationsector.• Includeentrepreneurshipinthecurricula.• Engagepublicbroadcastertoincludeentrepreneurshipintheireducation programmes on both TV and Radio.• Introduceapprenticeshipinthedevelopmentoftechnicalskills.• Removemathematicsliteracyfromthecurriculaaspartoftheraisingofthebarof SouthAfrica’scurricula.

Manufacturing • TheManufacturingsectorinSouthAfricaplaysanimportantroleinbuildingcountry reputation and positioning South Africa as trade partner and investment destination. • IntermsofpositivefeaturesassociatedwithmanufacturinginSouthAfrica,participants noted: • SouthAfricahasabundantrawmaterialsforinputintomanufacturingprocesses • SouthAfricaalsohasamaturebusinesssector/economycomparedtoother developing nations • SouthAfricahaswell-developedserviceindustriesthatcansupplyup-anddown- stream manufacturing • SouthAfricancompaniesaresomeofthebestintheworld• IntermsofnegativeissuesthatimpactonmanufacturinginSouthAfrica,participants noted: • TheNDPdoesnotmentionmanufacturingasameanstoeconomicdevelopment • CollusionandmonopoliesintheSouthAfricaneconomyimpactoncompetitiveness • Intermsofpositioning,SouthAfricaisnotconsideredtobeamanufacturing destination but rather a commodity currency

Foreign Direct Investment • RegulatoryframeworkforFDIisakeyissuethatimpactsoninvestmentdecisions.• SouthAfricaisaservices-dominatedindustry.• Perhapsthereisacasefordevelopingeconomictradezones–createeconomic incentives, tax holidays, tax breaks.• PerceivedpolicyuncertaintyisabighindrancetoFDIinSouthAfrica.• Long-termskillstrainingplansneedtogohand-in-glovewithFDI–oncetheyhave set up business in South Africa, who will they employ, do we have a skilled educated workforce?• BrandSouthAfricatocoordinatethedevelopmentofaroadmapforinvestmentinto South Africa – See overall recommendation from the 5 November forum regarding the establishment of Investment One Stop Shops in South Africa to make transition of companies into South Africa easier with clear roadmap, approval processes, and integrated management by multiple government agencies and departments.• CodeofConductforSouthAfricanbusiness(doingbusinessinAfrica,otherregions).• Ambassadortrainingprogramme–toincluderoadmapforinvestment.

Governance-related inputs • Itwasindicatedthatacleardefinitionofgovernanceisneededtodrivethis discussion.• Participantsuggestedthatthesessionfocusondomesticandinternational governance. In the domestic context it should focus on achievements South Africa has made in governance post-1994 (e.g. IEC; the role of the Constitutional Court; public consultations for policy making).• ParticipantsindicatedthatitisnecessarytobringSouthAfricanpoliticalpartiesinto the competitiveness forum discussions. • Itisimportanttoaskwhatthepurposeisofmakingthecountrymorecompetitive, and how specific governance-related issues impact on competitiveness. • Intermsofgovernanceitisalsoimportant,inthecontextof20yearsofdemocracy, to understand the quality of South African democracy – we need an assessment of SouthAfrica’sdemocraticcredentials.• InterestingexamplesofimportantgovernancebreakthroughsinSouthAfricapost-1994 came to the fore – the Independent Electoral Commission, as well as the need for public consultation on policy through departments and the National Assembly. According to participants these two are key unique examples of governance strengths to bring into the South African Competitiveness Forum discussion on governance.• In terms of general governance issues it was noted that South Africa has made significant strides to be recognised as expert in design of corporate governance – e.g. the King Code. A recommendation was made that this issue should also be addressed in the South African Competitiveness Forum session on governance.

Comments on the NDP • Needtodevelopabullet-pointversionofNDPtoinformdiscussionson implementation and actions to be taken by business and civil society stakeholders.

WESTERN CAPE RESEARCH REFERENCE GROUP CONSULTATION HIGHLIGHTS


Western Cape Consultation 17 October 2013


Stakeholder interactions with provincial and metro- and municipal structures

• Participantsnotedthatstrategicopportunitiestopartnerwithinitiativesincitiesexist.• OnesuchexampleisCapeTownbeingDesignCapitalduring2014.• HowwillBrandSouthAfricaworkwithCityofCapeTown?• Inordertodevelopmorebrandalignmentbetweenthenationbrandandcity/provincial structures, participants suggested that Brand South Africa and relevant agencies at provincial and city levels share their annual plans to see where complementarities exist, and how best these organisations can work together to maximise impact of communications, marketing, and related programmes aimed at positioning the nation brand globally and domestically.

Importance of city brands to the nation brand

• Acrucialissueregardingdevelopingthenationbrandistofindeffectivewaysof showing the organic link between the value a strong regional/city brand has and its positive impact on the nation brand. Example of this – findings from the 2013 City Brand Index. • Reputationofcitiesthereforetobeunderstoodascriticalelementthatsupports nation brand reputation.• Hencetheneedtofocusmoreworkonthecontributioncitiesmaketo competitiveness of the nation as a whole.

Competitiveness and reputation messaging – mobilising the business community as messengers

• OneoftheoutcomesBrandSouthAfricawantstoachievethroughtheSouthAfrican Competitiveness Forum is to gather stakeholder input and insights to include in Brand SouthAfrica’smessagingframeworks.• DuringthediscussioninCapeTownaparticipantnotedthatintheWesternCapethere exists networks of business executives and professionals Brand South Africa can engage with, and share country messaging.• Theseexecutivescantheninturnincorporateelementsofthiscountrymessagingwhen they travel, and speak on international platforms, to profile the country.

BuildingSouthAfrica’sinternationalreputation from the inside out

• ParticipantsindicatedthatuniversitiesintheWesternCapeattractsignificant numbers of international students, especially from the rest of the African continent.• ThispresentsanopportunitytofosterrelationshipswithalumnithatstudiedatSouth African universities and in so doing to develop networks of experts and graduates from South African universities positively disposed to the country.

Government bureaucracy and competitiveness

• Aparticipantindicatedthatinsomeinstancescriticismofgovernmentbureaucracy and‘redtape’isnotbasedonreality.• Thispersonnoted,forexample,difficultiesSouthAfricancompaniesfacewhenthey intend to export to Brazil, implying that red tape is not a unique issue in the South Africa context.

Skills and knowledge sharing between cities, provinces and Brand South Africa to improve competitiveness

• Participantsindicatedthatinsomecasescertainprovincesorcityregionsdevelop unique projects, or programmes, that boost economic activity or to enhance the standard of living of residents.• Theideaexpressedessentiallymeansthatplatformsforsharingsuchknowledge, solutions and approaches should be created. • Thiscancontributetoincreasingthecapabilityofregions,citiesandprovincesto bring best practice examples from other parts of the country to bear on their own unique challenges.

Governance- and mining-related observations

• Participantsraisedissuesregardingcountryreputation,especiallyintermsof policy certainty.• InthisregarditwasindicatedthatrevisionoftheMineralandPetroleumResources Development Bill is increasing uncertainty regarding the awarding of mineral prospecting and mining licences in South Africa.• Itwasindicatedthatthishasanadversereputationalimpactandcanpreventmining companies from making decisions on re-investment, or new investments in the South African mining sector. • ItwasalsonotedthatthepolicyregimesofminingandtheobjectivesoftheNDP are not aligned. 14 15



KWAZULU-NATAL RESEARCH REFERENCE GROUP CONSULTATION HIGHLIGHTS


KwaZulu-Natal (KZN) Consultation 24 October 2013


Investment in South Africa • Stakeholdersfromvarioussectorsintheroomwereconcernedaboutthestate of the labour markets. It was indicated that this could impact on continuing investment from outside investors. The media portrays a negative overview of the country’slabourmarketdespitetheprogressthathasbeenmade.

Mobilise domestic investment • BrandSouthAfricashouldbeacustodianinthefacilitationofnotonlysellingSouth Africa to external investors but to ensure that local investors see the country as an investment hub.• TheDepartmentofTradeandIndustryandtheChamberofCommerceshould engage in a more open manner about vetting and FDI.

Competitiveness and FDI • Inalltheindicesthattrackcompetiveness,SouthAfricaisdoingbetterthanmostof its fellow BRICS and African countries. The issue, however, is that even though South Africa is doing better, why is it not being materialised and converted into FDI?• SouthAfricaisnotseeingthegrowthsuchasothercountries,i.e.Zimbabwe,Rwanda and Kenya. This needs a more rigorous introspection on South Africa and calls for researchintotheseissuestodevelopinsightintoissuesthatimpactonthecountry’s growth rate.• Thisbringsaboutconcernsfromcivilsocietythatquestionshowgovernmentis spending public money and how efficiently they are spending it.• Asuggestionistohaveamacro-economicstrategythatSouthAfricaislacking.

South African Brands to expand in African markets

• ThereneedstobemoresupportforSouthAfricanBrands.Oneoftheparticipants mentioned that the only way he got into other African markets was because he supplies two local retailers, who have a presence in African Markets. Other than that, he finds it very difficult to tap into those markets with his South African food products.

Buy local campaign • Governmentandmunicipalitiesshouldbuylocal,buttheydonotcomplywith theseregulationsand,inturn,thisimpactsonthecountry’sreputationwhen international goods are sourced and used over local products.• ThemarketshouldbeinsulatedsuchasinIndia.MadeinIndia,andboughtbythe local markets.• ThereneedstobesynergywithbusinessesandSMME’s.Notonlythroughfunding but also to produce or have a one-stop shop where there is a supply chain for both local and international investments.

Need for a coherent country message • AsuggestionwasmadethatBrandSouthAfricapartnerwithorganisationsto create communication platforms, ensuring a coherent message when conducting international work. • Itwasindicatedthatatpresenteachprovinceissellingitselfasthoughitwere a country on its own. Even though provinces compete with one another, there needstobeauniformmessagewhendrivingthecountry’smessagingabroad.• AnationalPRstrategyshouldbedeveloped.• Insellingandmarketingthecountry,weneedtoleverageoffthestrongpointsof the country. What each province can offer individually. • BrandSouthAfrica’slogodoesnotseemtobeamarketingtool.Andthisisagap that should be addressed.

Obstacles to doing business in KZN • InKZNthebarriertoinvestmentintheProvincetendstobethehighcostofland.

OUTCOMES AND STRATEGIC RELATIONSHIPS ESTABLISHED

Several important milestones and key learnings from the regional consultations:

• BrandSouthAfricadevelopedimportantnew,andactivelyworkedtodeepenexistingrelations with stakeholders in regions; • TheDurbanChamberofBusiness,forexample,preparedandsubmittedanextensiveresearch document with key recommendations to Brand South Africa in preparation for the forum; • IntheEasternCape,BrandSouthAfricawaswellreceivedwiththeChambersofCommerce, the Black Management Forum, as well as other stakeholders, calling for more such consultative interactions between Brand South Africa and its regional stakeholders; • TheWesternCapeconsultationbroughttogetherrepresentativesfromthePremier’soffice,the City of Cape Town, the Western Cape Partnership and business representatives; • Intermsofkeythemesforthcomingfromtheregionalconsultations,thetablebelowshowsthe key themes from each consultation. Please note the extensive commonalities between sessions. Brand South Africa utilised these thematic inputs extensively in planning for the 5 November forum, and this will remain a reference source for Brand South Africa when it plans future regional engagements and consultations.

Regional Consultation Thematic FocusInformed planning for South African Competitiveness Forum and integrated into background briefing documents

shared with delegates @ South African Competitiveness Forum 13

WesternCape KwaZulu-Natal Gauteng EasternCape

Importance of city brands to the nation brand

Investment in South AfricaMobilise domestic investment in South African economyCompetitiveness and FDI focus crucial to development of South African economy

Infrastructure and Country Messaging

Infrastructure

Competitiveness and reputationmessaging – mobilising the businesscommunity as messengersBuildingSouthAfrica’sinternationalreputation from the inside out

LabourandSocio-economicissues

LabourandSocio-economicissues

Specific education-related recommendations

SouthAfrica’sBRICSmembership

Government bureaucracy and competitiveness

South African Brands to expand in African markets

Manufacturing Competitiveness of state-owned enterprises

Skills and knowledge sharing between cities, provinces and Brand South Africa to improve competitiveness

Buy local campaign Foreign Direct Investment competitiveness and policy, regulatory issues

NDP-related comments

Governance- and mining-related observations

Need for a coherent country message

Governance-related inputs Awareness of Brand South Africa in regions/provinces

Stakeholder interactions withprovincial, metro and municipal structures

Obstacles to doing business in KZN

NDP-related comments Comment on education

16 17



From the thematic breakdown Brand South Africa took the following lessons:

1. Need for more focus on city brands and their contribution to the nation brand. 2. Focus on consultative knowledge and planning exchange between Brand South Africa, metros and regions. 3. Mobilise business community stakeholders as Nation Brand messengers; equip stakeholders with necessary country messaging and CI tools. 4. Reputation implications of education and skills challenges in South Africa. 5. FDI flows, and factors that impact on South Africa and regional ability to attract FDI. 6. LabourchallengesnotedasimportantissuestoaddressforSouthAfricatoenhancereputation and image, internationally and domestically. 7. Role of good governance, and sound policy making noted as important element in managing country reputation.

Based on analysis of inputs received during regional consultations, the figure below brings the high-level themes from these sessions together.

Reputation implications of

education noted as challenge to the

nation brand

SACF-Keythemes from Regional

Consultations(incorporated into SACF

planning & briefings)

Business community

stakeholders to be equipped as

Nation Brand messengers

FDI flows and factors that

impact on SA as destination to be interrogated in

more detail

Nation brand to focus more on

city brands & their value add to nation

brand construct

Labourchallenges & role of good governance

in shaping SA reputation

Need more consultative

knowledge & planning exchange btw Brand South Africa & regional

stakeholders

As can be seen in the sections above, the South African Competitiveness Forum aimed to engage with stakeholders, and gather insights and input, all with the goal of helping Brand South Africa deepen its understanding of the brand reality.

Part 3 captures the essence of the day, with a specific focus on the overall outcomes of the day, as well as specific issues raised during the breakaway working sessions.

OPENING BY MS CHICHI MAPONYA – BRAND SOUTH AFRICA CHAIRMAN

HighlightsfromtheChairman’sopening:

• “TheCompetitivenessForumisaculminationofayear’splanning to bring together a range of stakeholders from South Africa to begin aconversationaboutournation’scompetitivenessandreputation. There’sadistinctrelationshipbetweenthesetwoconceptsandthey directly influence each other. Both of these concepts are of great interest to Brand South Africa and, as you know, Brand South Africa

istheofficialmarketingagencyofSouthAfricaandismandatedtobuildandpromoteSouthAfrica’sreputation in order to position our country as a globally competitive and attractive destination for investment. We are also mandated to build pride and patriotism among South Africans in order to contribute to nation building and brand ambassadorship.”

• “Theshapingofthecountry’sdestiny,therefore,dependsontheabilitywe,asSouthAfricans,have to open and be receptive to diverse opinions, ideas and positions. In order to achieve the national goals of poverty alleviation, job creation and the long-term targets set by the NDP, South Africans must be active participants in shaping that destiny. For this reason, the South African Competitiveness ForumisaninitiativeandaninvitationtoallSouthAfricanstohelpshapethecountry’sfuturethrough focused contributions to strengthening the national brand positioning, both domestically and internationally. This South African Competitiveness Forum is furthermore informed by and aims to facilitate discussion on how improved competitiveness and strong international reputation can assist the country to achieve long-term development, social, transformational and economic objectives. But looking to our heritage, we must not lose sight of where we want to go and it is this that we must deliberate upon today.”

Part 3 – 5 NovemberSouth Africa Competitiveness ForumOutcome ReportKey outcomes from South African Competitiveness Forum

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WELCOME AND SETTING THE CONTEXT – MINISTER COLLINS CHABANE

HighlightsfromMinisterChabane’sWelcome • “BrandSouthAfricahasbeenchargedwiththeresponsibilitytobring South Africans together, to display what South Africa is all about and to tell the world who we are. As we face these challenges, one thing is clear that even those who would not like to admit, nobody can disagree that South Africa is not the same as it was in 1994 and it has changed for the better, not for the worst. It is that message which, as South Africans, we should be able to communicate and let the world understand South Africa from what we South Africans think South Africa is.”

• “Todaywearegoingtodeliberateonfivethings:educationandskillsandlabour;manufacturing and related services; governance and leadership; infrastructure; and foreign investment competitiveness. Each of these areas are critical to our competitiveness as a country and our reputation. For here and now, but also for the future, these elements will set the tone for our development and competitiveness. It will help us to attract investment and therefore create more jobs.”

• “Soourtaskasanation,allofus,whetherwe’reinthemedia,whetherwe’reinbusiness, whether we're in politics, whether we are churches, is to go out there and convince the world thatinspiteofsomeofthechallengeswhichwe’vefaced,whicharefacedbyanynation anywhere, we have got a vision to build a better world, not only for the future generations of our country but those who can make a significant contribution to the well-being of the world as a whole.”

ADDRESS - H.E. DEPUTY PRESIDENT KGALEMA MOTLANTHE

HighlightsfromDeputyPresidentMotlanthe’sAddress

• “As a first of its kind in South Africa, this forum will give leaders from all spheresaplatformfordebatingourcountry’scompetitivenessaswellas arriving at a common understanding of how to improve the competitiveness of our economy. This forum will harness the collective brain of various sector leaders in an effort to meet the quality standards of the local and world markets. This is in itself no small feat given that we live in a global village where goods and services have no regards for borders and where countries continuously strive to penetrate foreign markets to sell their products.”

• “Beyond the competitiveness of our products, we need to prove our worth on a number of socio-economic indicators such as political stability, cultivating an investment-friendly environment, greening the economy, transparency, predictability as well as having good macro-economic policies. If we are to be competitive, we must have in place sound economic policies, cultivate the favourable legal and business environment, roll out socio-economic infrastructure, constantly improve our trade and industrial policies, and lower the cost of doing business. As such, the sheer amount of work that still needs to be done requires that we, together as government, business, labour, and other social partners, continue to work together to address the challenges we face. Towards this noble objective, I would encourage that we see this forum as an opportunity for social dialogue and crafting social compacts that will enable higher growth trajectory. By acting in concert, this forum may prove to be an invaluable tool in the identification, management and minimisation of risks in governance, delivery systems, institutional arrangements and other existingprocedures.Ladiesandgentlemen,wehave,overtheyears,madegoodstridesin positioning our country as a stable democracy with the necessary institutions and mechanisms for providing an attractive and friendly investor environment.”

• “Inmoderntimes,societalprogressispredicatedoninnovation.Equally,SouthAfricahasthetask of remaining innovative in all key sectors of society, particularly the economy. In turn, innovation assumes that our research and development capacity as a country is of international standards. Research and development creates conditions in which innovation can keep thriving at every stage and, logically, this then suggests sequentially that our education system is sound and solid, especially in the key areas of science and mathematics and ICT, all of which are the prime drivers of national development. In other words, harnessing the force of science and technology to meet our developmental needs is among the empirically proven ways for societies to move forward. Only a sound and quality education system with strong emphasis on mathematics and science can serve as a reliable feeder for tertiary institutions, which will in turn be able to produce top-notch graduates geared to the needs of the country.”

• “Simplyput,toimproveourcompetitiveness,weneedtogrowacriticalmassofpopulationthat is able to fully participate in their own socio-economic development thus pulling themselves up by theirownbootstraps.Inthisregard,forustoimproveourcountry’slabourandeconomicproductivity, education and training remain disproportionately important as the most viable long-term solution.• “Inviewoftheissuesraisedabove,I’mconfidentthatthisforumwillequalthetaskoftryingto improve our competitiveness, conscious too that in the final analysis it is action that speaks louder in the achievement of our objectives.”

20 21



• “ProgrammeDirector,allowmetoconcludebystatingthattheachievementofsustainable competitiveness has never been a more pressing challenge for South Africa.”

SOUTH AFRICA’S COMPETITIVENESS:A BUSINESS PERSPECTIVE – COLIN COLEMAN, GOLDMAN SACHS

• “IunderstandthetopictodayisthecompetitivenessofSouthAfricaand Goldman Sachs has just completed a 20-year review which was launched yesterday, so the timing of this conference is fantastic from that point of view to share with you the major components of this report as it impacts competitiveness.Theinterestingpartofthereport,andhopefullyyou’llbe abletopickupthedatafromwhereyou’resitting,isthatwetakea20-year view on South Africa, get away from the short-term sort of more emotive lately largely negative view of South Africa and we get some perspective onthegainsthatwe’vemadethatMinisterChabanehasalready referred to and,withthatinmind,we’reinabetterpositiontounderstandthestructural advanceswe’vemade,thestructuralchallengesthatremainandwecan

then deal with what the next period has in store for us.”

• “WehavemanagedtomovetheGDPfromroughlya$130bn,orarelativelysmalleconomy,to $400bntoday,whichisasignificant-sizedeconomyandthelargestinAfricaasweknow.”

• “Thestatisticsunderneath,effectively,reinforcewhatMinisterChabanehasinfactsaid,whichis that the social service delivery system of the non-cash transfers by the state has, in effect, made significant value transfers to the poor. That you can see in terms of electricity, for example we now have85%ofthecommunitywithaccesstoelectricitywherethatwaspreviouslyinthemid-fifties.”

• “Well,we’veturnedacountry,ifyoulookatthatchart,thatwaseffectivelyajunkbondstatus country in 1994 that we inherited with almost nothing in the bank account because if you take the $3bnreserves,we’llactuallydeduct$25bnofthenettopenforwardpositionthatwehadatthat pointintime.WehadnettdebttoGDPof50%whichfellthroughTrevorManuel’seffortsin2007 to28%.Posttheglobalfinancialcrisisithascomebackuptoaround42%todayandwehada significant number of people that were effectively outside the social welfare net with only 2 million peopleatthatpointintime.Whathavewedone?We’veeffectivelymovedtoaninvestment grade rating.”

22 23



24 25



26 27

Changein20yearsofDemocracy

Category 1994 Now

S&P Credit rating BB(SubInvestmentGrade) BBB(InvestmentGrade)

GDP $136bn $400bn

Inflation 1980-94Average=14% 1994–2012=6%

TaxReceipts R114bn/1.7mpeople R814bn/13.7mpeople

GrossGold&ForexReserves $3bn $50bn

JSEMarketCapitalisation $101bn $800bn

Labourproductivityperworker $8,000(2002) $25,600(2012)

LSM5-10 13.8mpeople 23.5mpeople

SocialGrants 2.4mpeople 16.1mpeople

Householdelectricity 58%(1996) 85%(2011)

1986 1994 2012

Banking &Real

Estate17.2%

Govt. Services

18.6%

Manufacturing18.7%

Retail13.4%

Mining9.4%

Transport7.5%

Others9.3%

Banking &Real Estate

23.9%

Govt. Services

15.3%

Manufacturing17.2%

Retail14.0%

Mining5.5%

Transport10.1%

Others7.8%

Banking &Real Estate

12.5%

Govt. Services

12.4%

Manufacturing22.7%

Retail11.4%

Mining15.2%

Transport8.6%

Others15.5%Personal

Services1.7%

PersonalServices5.8%

PersonalServices6.1%



COLIN COLEMAN - 10 KEY ISSUES SOUTH AFRICA HAS TO ADDRESS

Public sector

- Productivity: "bang for buck", especially in the areas of health and education

- Exercise good management practices to meet own performance requirements

- Education fit for employment

Special focus on unemployment/unemployable youth

Labourpactfor

- Sustainable growth and employment

- Balanced wage/productivity growth

Defending the rise of the African middle class

Creating fiscal space to sustain spending on the poor by optimising state assets

Driving economic growth through

- Promoting industry and driving new frontiers for growth

- Building economic linkages with Africa

- Creating visible economic wins from "BRICs"

Driving FDI through building investor confidence

Driving innovation via increased investment in research and development and technology

A common effort to protect the sovereign rating and cost of capital

Leadershipdrivingacultureofaccountabilityandteamwork

BREAKAWAYSESSIONREPORTBACK

EDUCATION, SKILLS AND LABOUR

In preparation for the South African Competitiveness Forum, the regional consultations and background research identified education as not only a driver of social development and broader economic development, but that if left unattended to, can have significant downside reputational risk for South Africa. The education, skills and labour session therefore focused on a range of reputational as well as competitiveness implications of perceptions regarding the quality, standard, and relevance of education for the economy.

In his report back to the closing plenary of the day, session moderator, Dr Adam Gordon, indicated that the session was characterised by robust debate and creative conflict of ideas.

The report back focused on the reputational risk of various labour issues and labour unrest. Delegates agreed that this impacts on perceptions of the country and that it may be a somewhat unstable market for investment.

Specific education-related issues the session discussed pertain to low levels of literacy and numeracy. The session also noted that South Africa has to focus on both low- and high-level skills. It was argued that a lack of management acumen and experience impact negatively on institutional capacity and delivery capability in the public sector in particular.

Education delivery in South Africa has had to address historical legacy issues post-1994. General levels of access to education have improved; however, one key challenge pertains to the relative lack of internet and online capability in the South African education sector. This issue is not confined to a particular level of education but impacts on the full range of institutions, both private and public, that deliver education.

In terms of this issue the session concluded that the cutting edge of education development and delivery is online, or has a blended approach between classroom contact and online course offerings. The session advised that although the reputational risk is low as of now, this will not be the case in the next five to ten years. The underlying problem identified in this regard is not located in the realm of education policy per se, but identifies a key infrastructural challenge South Africa faces in terms of internet access and bandwidth.

DelegatesinthesessionindicatedthatthequalityofSouthAfrica’shighereducationisacountryreputationenhancer.TheinternationalrecognitionofsomeofSouthAfrica’sbusinessschoolswasnoted as a proof point. Intermsofqualityeducationofferedthroughthecountry’stertiaryandtechnicaltrainingfacilities,it was argued that there is a large Global South African community of people with exceptional skills and qualifications. Such individuals make sterling contributions to multinational corporations and corporations located in key international markets. The session delegates argued that this is a real country reputation enhancer because such South Africans are taking good skills to the international market, reflecting well on the South African education and skills.

28 29



On the domestic front it was noted that South Africa has several national pockets of excellence in skills. In sectors such as financial services, broadcasting, media, and sports, South Africa has developed significant skill and competency. In addition, the delegates to the session indicated thatthecountry’slegalsystemisgenerallystrongandwellcapacitated–thiscanbeviewedasareputation enhancer.

A strong recommendation that came through the session is that more time and resources should be devoted to the managerial development of school principals. Principals occupy key strategic positions not only in the education system, but also within the communities they serve. In line withthecommentonSouthAfrica’sbandwidthchallenges,itwasnotedthatschoolprincipalsshould ideally also be skilled in IT and online education delivery. This was highlighted as a potential reputation enhancer if planned and implemented properly at a national level.

While several contributions in the session focused on education delivery through state infrastructures, the role of business and civil society in the education sector was also addressed. In this regard a specific recommendation was made regarding the creation of centres of excellence where graduates, and emerging graduates, could go to gain work experience and to refine their skills in the real world of work.

The session also made recommendations regarding country messaging. Delegates firstly felt that it is important to tell the story of the last twenty years of democracy, as a good news story of South Africa.However,SouthAfricashouldalsomovebeyondthe‘feelgood’elementandmakeacontractwith itself and the world for the next twenty years which states that we are intent on taking action to make the country a better place in the next twenty years. This ties in closely to the realisation of the NDP’sVision2030.

Another key country message delegates felt is important to convey is that South Africa is strong and unique in terms of being a place/country that manages diversity really very well. Delegates in the session thought that diversity was a key part of our country message going forward, and that South Africacanpositionitselfasa‘diversityexpert’.

A final country message the session delegates addressed pertains to the Square Kilometre Array (SKA) project. The suggestion was to leverage high-value single point projects that we embark on as a country that showcase the world-class capabilities in the country.

During the regional consultation process very similar issues regarding education were raised. To this end key outcome #6 of the South African Competitiveness Forum speaks to education. The South African Competitiveness Forum Task Team will further engage with this issue, and seek to develop mechanisms to implement recommendations forthcoming from this session.

Theme Descriptor

Country reputation impact of negative perceptions on education

SouthAfrica’sprofileasinvestmentdestination,anditsinternalcapabilitiesquestioned as a result of low standards of education.

Reputation implications of labourmarket instability

Delegates noted that uncertainty in the country fed by ongoing labour market issues. Need concerted effort to stabilise labour-government-business relations. Latterwillimpactpositivelyoncountryreputationandattractivenesstoinvestment, trade.

Development of managerial skills Poorly trained/skilled managers impact negatively on delivery capability in public sector. Need concerted effort to up-skill managers and instil values of delivery and service ethic to the public.

Broadband internet access foreducation not a luxury, but national necessity

Poor access to the Internet as a result of bandwidth challenges in South Africa, impacts negatively on roll-out of new technologies to deliver education in 21st century South Africa.

South African production of world- class skills

Showcase Global South Africans, their skills and expertise gathered in South Africa and how it is absorbed and utilised in international markets.

Celebrate and learn from existing national pockets of skills excellence

While South Africa has skills and educational challenges, also need to note strengths and accomplishments in sectors such as: Financial Services; Broadcasting; Media; Sports;Legalexpertise;CorporateGovernance.

Role of business and civil society in education and skills development

Noted that national centres of excellence should be created where graduates can gain work experience and develop skills relevant to industry.

Communicate more on accomplish-ments South Africa made in 20 years of democracy

Important to keep on telling the positive South African story of a nation in transfor- mation post-1994. Need for clear understanding of national achievements to inspire South Africans.

Education, Skills and Labour Session Themes

30 31



SouthAfricarank Competitivenessdriver Score Globalrank

1 Cost and availability of labour and materials 3.16 3

2 Localmarketattractiveness 4.43 8

3 Energy cost and policies 4.80 7

4 Economic, trade, financial and tax system 4.88 2

5 Physical infrastructure 4.99 6

6 Supplier network 5.38 4

7 Talent-driven innovation 5.63 1

8 Government investments in Manufacturing 6.18 10

9 Legalandregulatorysystem 6.43 5

10 Healthcare system 8.80 9


MANUFACTURING AND RELATED SERVICES

In preparation for the forum, Brand South Africa consulted extensively with stakeholders in the industry. In particular Deloitte, the Manufacturing Circle, and the Department of Trade and Industry.

Given the specific focus of this session on Manufacturing and Related Services the content input received from Deloitte, the Manufacturing Circle, and the Department of Trade and Industry (specifically the IPAP policies) form the core of background documents to be considered. In addition to the latter, Brand South Africa also received inputs from the Manufacturing Advancement Programme, which focuses, in particular, on increasing the internal capability and skills, as well as ultimate competitiveness of smaller manufacturing companies in South Africa.

From Minister Rob Davies and the Industrial Policy Action Plan, “The overriding goal of the IPAP in this policy context is to prevent industrial decline and support the growth and diversification of SouthAfrica’smanufacturingsector.Thebalanceofinternationalevidenceisthatmanufacturingis the engine of growth and employment of all economies that have achieved high gross domestic product (GDP) and employment growth. Manufacturing can generate significant job creation directly as well as indirectly in a range of primary and service sector activities. At the same time, experience over the past year reinforces a point articulated in previous iterations of IPAP: namely, that industrial policy can and does succeed if it is well designed, adequately resourced and informed by robust and constructive stakeholder dialogue.”

Deloitte and Manufacturing Circle ResearchThe most recent Global Manufacturing Index results saw South Africa drop two places. The report projected that we would continue to drop over the next five years. These results spurred Deloitte SA to partner with the Manufacturing Circle to conduct a local manufacturing competitiveness survey in line with the global survey. The objectives were to understand what is working and what is not working in the South African context.

The members of the Manufacturing Circle reviewed the global ranking of the Manufacturing competitiveness drivers and then ranked the drivers from a South African perspective. The results are shown in the table below.

The Deloitte South Africa Manufacturing report goes further to reflect on a workshop facilitated in its state-of-the-art innovation Zone™ with members of the Manufacturing Circle and various Deloitte industry subject matter experts.

The purpose of the workshop: to gain a deeper insight into the reasons for the rankings and to better understand some of the competitiveness issues faced by manufacturers in South Africa.

Key issues from the discussion:

> Cost and availability of labour and materials > Localmarketattractiveness > Energy cost and policies > Economic, trade, financial and tax system > Physical infrastructure > Talent-driven innovation > Government investments in Manufacturing

With the above snapshots of input received for the Manufacturing and Related Services discussion, the following highlights and recommendations emerged from this breakaway session on 5 November.

Delegates noted that South Africa should take a reality check in terms of the shrinking share that manufacturing has in the South African GDP. According to the discussions in the session, as well as the report Colin Coleman shared with the South African Competitiveness Forum, in 1986–22.7%; 1994–18.7%;2012–17.2%. This means manufacturing has to be prioritised from both an economic as well as country reputation point of view.

Some of the reasons given for this state of affairs include: Pricing in terms of transport, fuel, and port charges. These costs, unique to internal logistics, freight, and bottlenecks in transport infrastructure have an adverse impact on the global price competitiveness of South African manufactured goods.

While the above framed challenges, delegates also noted that there are several pockets of excellence inSouthAfrica’smanufacturingsector;thesecanbeutilisedascasestudiesandincountrymessaging.Delegates furthermore noted that, in terms of reputation, South Africa does not go out often enoughwiththepositivestories,especiallywhenitconcernstheinherentstrengthsofthecountry’smanufacturing sector.

InordertofurtherpromotethedevelopmentofSouthAfrica’smanufacturingsector,itisnecessarytodevote more energy to identifying viable markets to expand into. In this regard delegates noted thattheAfricanmarketispotentiallySouthAfrica’slargestmanufacturingexportmarket.

In regional consultations several questions were asked about the manner in which government and business work together to market, promote, and profile South Africa in international markets. Delegates felt that there needs to be a stronger South African presence in target markets in the form of trade delegations, trade markets and shows where business and government embark on a collective effort to promote the country. In this regard delegates also indicated that South Africa may also need to promote the niche products manufactured in the country which distinguishes itself from the global market.

Delegates to the manufacturing sessions also strongly recommended that a steering committee be mandated by government to help develop a national strategy for the manufacturing sector. This body should ideally take deliberate steps to grow the sector. Brand South Africa will address this recommendation through the South African Competitiveness Forum Task Team structure.

32 33



This calls for one coherent strategy to be developed which includes the different provinces and regions. Delegates noted that this is a role Brand South Africa, as the custodian of the nation brand, should perform.

An issue that solicited much comment in the session concerns perceived policy uncertainty. Some delegatesasked,‘Dowereallyhaveaneconomicpolicy?’Thispertainstoregularchangesinpolicythat impact directly on business. It was recommended that policy changes be made less regularly to maintain a stable outlook for business activity, and that ideally all economic policy developed henceforth needs to be posited in the context of the objectives of the NDP.

Delegates noted that international business representatives are sometimes confused by South African policy. According to delegates, BEE and its associated codes take some explanation to international stakeholders. This may call for clearer articulation of the socio-economic and transformational objectives that underpin such policies.

While Brand South Africa is mandated to market and promote South Africa, delegates felt, much like delegates at the regional consultation held in Cape Town, state-based promotion of trade and investment in South Africa has natural limits. Ideally, country promotion has to be carried as a natural part of the international strategy of corporations. For example, a successful businesses brand that is globally recognised builds the reputation of its home country as well. An example mentioned concerned Ikea and how, through its global brand footprint, it also in some instances directly promotes its underlying (Swedish) nation brand.

Lastly,thedelegatesinthesessionalsofeltthatthereisalackofawarenessamongSouthAfricans,andpossiblyinternationalaudiences,ofSouthAfrica’suniquecompetitiveadvantages.Thiscallsfor sector-specific communications to be designed that highlight areas of competitive advantage, for example:Platinum–SouthAfricaholds80%ofworldreserves;retailsectordevelopmentandregional footprint, expertise; financial services sector.

Delegates noted that there is a need to develop a South Africa unique competitiveness index. This instrument can be used to track country performance on key indicators.

Delegates noted with some concern that South Africa does not have a one-stop shop for investors. The session moderator showed results of a Google search a person from India conducted when lookingforinformationoninvestmentinSouthAfrica.ThesearchresultwasalonglistofURL’swhichmostly contained articles about South Africa and little on how to invest in the country. The question delegates then asked is why, if African peer countries like Kenya and Senegal provide such platforms to serve the needs of investors, can South Africa not develop a similar one-stop shop concept?

Theme Descriptor

Challenges to competitiveness of South African manufacturing


Dwindling share of manufacturing in South African GDP

ShareofGDP:1986–22.7%;1994–18.7%;2012–17.2%.

LogisticsandexportcostchallengestoSouth African manufacturing

Due to high input and transportation costs some South African manufacturers find it hard to be price competitive in global markets. Contributing factors that have economic and reputational impacts: •Transportcosts; •Fuelandroadhaulagecosts; •Portcharges.

Excellence in South African manufac-turing to be communicated domesti-cally and internationally

Delegates noted several unique niche products manufactured in South Africa. Case studies of unique South African manufactured goods should be developed and included in country messaging, marketing and positioning strategies.

Need for steering committee/task team to revitalise South African manufacturing

Delegates strongly suggested a government-business platform to be created to find new ways of expanding South African manufacturing profile.

Manufacturing and Related Services Session Themes


FOREIGN DIRECT INVESTMENT COMPETITIVENESSPart 2 of the report above, in the section devoted to regional consultations, clearly shows the extent to which delegates were interested in a combination of issues: country messaging and FDI attractiveness. There is a natural linkage between these two issues in that accurate and expertly applied country messaging can go a long way towards positioning South Africa more effectively as an investment destination, trade partner, and tourist destination.

The breakaway working session on FDI competitiveness drew the largest group of delegates at the forum of 5 November. Some of the key issues that came through in the discussion mirrored many of the issues raised during regional consultations.

In the session, delegates questioned the positioning of South Africa as the Gateway to Africa. Manyofthedelegatesfeltthatwe’reactuallynotthegatewaytoAfrica.Therearemanygatewaysto Africa, in actual fact, and ultimately there are more than fifty countries in Africa, so how can we actually claim to be the only gateway to Africa?

Delegates indicated that South Africa should ideally utilise existing strengths, e.g. in the financial sector, or key infrastructure, to position the country to promote South Africa as a global hub of service excellence. It was suggested that South Africa could position itself as the service centre of the continent,whichisalmostsimilartosaying‘Chinaistheworkshopoftheworld.’Inaddition,sloganssuchasKenya’s‘Kenya–OpenforBusiness’wereraisedasexamplesofhowothercountriescreatea key descriptor outside of the official pay-off line. It is an association that needs to be created with South Africa to give, in a few words, the key thing the country offers the world. Following on the above, delegates also noted the need for a more coherent, and widely shared, country communications strategy. It was noted that there seems to be a lack of strategy in terms of provinces and the internationalmarketingofthecountry.Itwasindicatedthatthevariousprovincesandmetro’s/cities are telling their own individual stories internationally. 34 35



projectshadkickedin2or3yearsago,SouthAfrica’sdecliningGDPfigurecouldhavebeenboostedbysuchpublicinvestments.Thecountry’seconomicoutlookthereforestandstobenefitpositivelyfrom bringing planned projects from idea to bankable and implemented project reality. In terms of the regulatory environment, the session report back noted that overly regulated processes of getting projects from feasibility to bankability to delivery, hamper implementation. It was indicated that this is a product of the intrastate process between a prospective state-owned enterprises and/or government departments being overly complicated and/or bureaucratised.

The session report back indicated that South Africa clearly illustrated phenomenal capability when it plannedfor,builtandhostedasuccessfulFIFA2010WorldCup.Leadingupto2010,theinfrastructurespend, the institutional capacity, the skills and the project management skills that we built up led to South Africa not missing one infrastructure delivery deadline. It should be recalled that this included the delivery of critical infrastructure expansion and new construction of airports, the Gautrain (at least the Sandton-OR Tambo route), world-class stadiums and the initial backbone of expanded public transport infrastructure. South Africa met every single production date or project date.

The reputation issue is that the country clearly has the capability to deliver infrastructure projects. To deliver on the currently planned infrastructure projects the session recommends South Africa takes some lessons from its 2010 delivery.

A key recommendation made by the session is for the establishment of a ring-fenced sovereign wealth fund for infrastructure development. Such a fund can be privately managed, and available capital can be allocated to key projects on a sovereign wealth fund project basis.

IntermsofSouthAfrica’sopportunitywithintheAfricanmarket,itwasobservedthatSouthAfricashould make more of its strategic position. It was noted that South Africa is to Africa what Singapore is to South East Asia, and Hong Kong is to China. South Africa should utilise its capabilities to roll out and spearhead critical infrastructure projects across the region that can enable trade and open opportunities for further South African business expansion in the region.

In terms of opportunity cost of not having sufficient infrastructure, the session report indicated that South Africa could not fully benefit from the commodities boom of the early 2000s due to insufficient carrying capacity on rail, and throughput capability at ports and point of export. While South Africa already has sizeable port infrastructure, growth in mining is curtailed as a result of insufficient infrastructure capability. The latter additionally has cost implications, making transportation of minerals and mining products to port excessively expensive – thus hampering South Africa's mining industry competitiveness in global markets.

From the above it can be observed that a set of interlinked issues impact on both the economic capability of South Africa in terms of infrastructure, but that both national competitiveness and reputation is affected by these dynamics.

Theme Descriptor

Inclusive and coherent country messaging

Need for Brand South Africa to work closely with business and regional stakeholders to develop integrated country messaging and positioning strategy

South Africa as Gateway to Africa concept questioned

Noted that there are more than 50 African countries, how can one country be a gateway? Rather position South Africa as the Service Centre/Hub of the African continent

South Africa to use existing strengths to profile and position nation brand

Need to showcase unique South Africa strengths domestically and internationally

Need for coordinated international strategy between national, provincial and local government

Concerns raised that international delegations are not coordinated. Need higher level of coordination in country messaging and strategy for engagement in international markets. Currently uncoordinated and dilutes coherent country message

Policy uncertainty and need to locate economic policy in context of NDP

Delegates noted too many processes of policy change and revision. This creates uncertainty in the market. Need more implementation of existing policy and avoid continuouspolicy‘tinkering’andchange.Needtoaligneconomicpolicytothe NDP

Need to contextualise and articulate policy, e.g. BEE

Policies unique to South Africa, such as Black Economic Empowerment codes, need to be explained and articulated better to get buy-in from international business

Need to mobilise South Africanbusiness as country messengers

Delegates in this session, as well as those at regional consultation in Western Cape, noted natural limits of state-based/funded country promotion. Need to mobilise business community as country message carriers

Urgent need to create one-stop shop for international investors

Delegates noted with some concern that South Africa does not have a single one- stop facility that can cater for the administrative, information needs of investors

Need to actively promote and communicate South African competitive advantages

To develop communications and marketing approaches that entrench and increaseawarenessofSouthAfrica’suniquecompetitivestrengths

Need South African unique competitiveness/country performance tracking index

Noted limitations of third party indices, recommended that Brand South Africa work with stakeholders to gather input and identify key competitiveness and socio- economic indicators to include in such an index

FDI Competitiveness Session Themes


INFRASTRUCTURE

The Eastern Cape and KwaZulu-Natal consultations brought regional views on the need for infrastructure development to the fore. The session devoted to infrastructure at the South African Competitiveness Forum took recent global economic trends into consideration. For example, Dr Martyn Davies, the session moderator, indicated that in the year 2007, just before the onset of the global financial crisis, only three countries in the world did not grow. During that year 114 countriesgloballygrewatanaverageof5%peryear;importantly,SouthAfricawasoneofthem.

Dr Davies went further to contextualise the findings of the session by indicating that subsequent to thefinancialcrisis,‘…we’veseenhowfragilethisemergingmarketgrowthphenomenonhasbeeninrecentyears,supported,underpinnedbytheFed’spolicyofQE,quantitativeeasing.Whatthismeansnow,forSouthAfrica,isthatwe’rea2%economy,similartoBrazil.Indiangrowthhascomeoffatmore than half, realistically four-and-a-half, and looking at the remaining BRICS country, Russia, Russiangrowthisveryeasytopredict.’

Withthisinmind,thesessionreportindicatedthatSouthAfrica’snationalinfrastructureplansneedto be made a reality. Delays in the implementation of key projects lead to questions raised about implementation capability and other obstacles. For example, if spending on major infrastructure 36 37



Delegates noted that South Africa often speaks about having the best constitution in the world. This is a reputation enhancer and can be utilised more effectively when engaging in international relations. While the core democratic values of South Africa are uncontested, delegates to the session also indicated that there is a perception that fast growing emerging market economies are non-democratic. This poses a challenge to South Africa - how can the governance model of an open, democratic dispensation with vast individual freedoms and rights, be proven as a model that can also spur rapid economic growth. This contribution framed a uniquely positive challenge to South Africa as it moves to reflect on 20 years of democracy in 2014.

Together with the delegates identifying values that underpin governance, it was also argued that governance should be taught at schools, and given more emphasis on other educational platforms as well. Such training can focus on how institutions should be run and managed, but most importantly,it is to instil accountability and the realisation that if the individual does not perform their functions properly, the whole organisation and its clients, or a community, suffer. The basic question in regard to South Africa is: How do you make sure that people understand that they have a stakeholder base that will hold them accountable for their decisions, actions, and lack of performance/delivery?

Delegates in the governance session argued that South Africa has well established monitoring and public accountability structures (such as Parliament, the Auditor General, the Management Performance Assessment Tool), while corporate governance regulations and industry-developed best practice governance systems are well recognised.

Based on the above, the leadership challenge the session identified pertains to the gap or inconsistency between execution and plan. The session indicated that this is not necessarily an issue Brand South Africa can tackle alone. It is a challenge that confronts South Africa as a whole. The nation brand, as a collective, has to say what it is doing to maintain consistency between what it plans, or says it intends to achieve, and that which materialises in reality as completed projects, delivered services, or a skilled, well educated, and healthy work force. The country deserves consistency in governance and service delivery.

An oft neglected issue that came to the fore in the FDI session also came through as a strong comment in this session. Brand South Africa, both as an organisation and the collective nation brand, has the responsibility, and the duty, to create a space to start engaging about creating shared value. Delegates felt that, in other words, a leader of a corporate organisation must deliver both shareholder value as well as value to the country the business operates in, to the citizens that the business works with, and the communities that it is accountable to. In the FDI session it was noted that business/corporate leaders and brands can be very effective carriers of the nation brand message. This means that both in terms of FDI and Governance session discussions, delegates highlighted the need for a wider set of messengers from diverse sectors.

In order to make progress on the delivery of quality service to South Africa through soundly governed institutions,thesessionindicatedaneedtopromoteleadershipwithvision.Leadershipshouldalsobe underpinned by a set of nationally shared values so that the objective of governance goes beyond those of leaders, but rather to do South Africa proud in terms of implementing policies that enhance national competitiveness and our ability to actually play on the world stage as a reputable nation.

In terms of internal governance, it was noted that a lot more work needs to be done to synchronise activities of different spheres of government. This pertains to several aspects, ranging from country messaging to planning, policy, approval of projects, and basic financial management. This is a critical areaandchallengeforSouthAfrica’spublicgovernanceprofile,andcanbeatremendousreputationenhancer if the country shows concerted effort to enhance and improve domestic governance and public service delivery structures.

Theme Descriptor

Reputation risk of not implementing National Infrastructure Plan

The session delegates noted that South Africa has lots of news on infrastructure plans.Thereisaneedtoimplementthese,andshowactualresults.Lackingthis, thecountry’sreputationcansuffer

South Africa effectively delivered world-class infrastructure on time for FIFA 2010 World Cup

It was indicated that South Africa delivered all infrastructure projects on time for 2010. The question is, why now with the roll-out of critical national infrastructure plans is the country seemingly not able to deliver. Need to take a lesson from 2010

Regulatory environment impact on infrastructure delivery

One reason for delays in delivery of infrastructure projects noted as complex intrastate administrative processes between State-owned enterprises and regulators. Need more efficient system to bring projects from bankable feasibility stage to implemented reality

Create a sovereign wealth fund dedicated to national infrastructure development

Suggested that South Africa need to create a sovereign wealth fund to support infrastructure delivery projects

South Africa needs to make more of its strategic position in Southern Africa

SouthAfrica’seconomic,politicalanddiplomaticinfluencetobeutilisedmore effectively to spearhead regional infrastructure development initiatives. This will benefit not only South African expansion in the region, but also regional development and integration

South Africa has to be positioned more ‘aggressively’asserviceexcellencehub for Africa

Noted that South Africa plays the same role for Africa as Hong Kong does for China, or Singapore for South East Asia

South Africa suffered opportunity cost during commodities boom due to export infrastructure bottlenecks

Noted that insufficient infrastructure curtailed South Africa's ability to fully benefit from commodities boom of early 2000s (pre-financial crisis). This has both direct economic and reputational consequences for the country

Infrastructure as enabler of growth Noted that infrastructure investment is critical for expansion of South African economic base, and to address issues of historical regional, socio-economic imbalances

Infrastructure Session Themes


GOVERNANCE AND LEADERSHIP

In the initial stages of planning for the forum, Brand South Africa indicated that governance is a wide term that encompasses private sector and corporate governance, public sector governance, and international governance contributions South Africa makes in multilateral contexts. It was acknowledged that not all areas of governance can be covered in significant depth. Hence the approach to the session followed inputs received during consultations in the regions. Brand South Africa also shared extensive information from reputation, governance, and the Management Performance Assessment Tool report released by the Ministry for Performance Monitoring and Evaluation.

Delegates to the governance session indicated that for the country to advance and develop soundly governed institutions, and to build a national governance ethos, it is necessary to identify and clearly articulate the values that underpin governance (and governance practice) in South Africa. This means that if South Africa intends to improve its performance on governance it is necessary in the first instance to have a clear view of the underlying values – they can help plan and sharpen implementation of interventions geared at better/improved governance. The session also remarked that governance is not a concept devoid of value. It is, therefore, not a neutral or valueless concept. During the feedback session the moderator, Trevor Ndlazi, indicated that, ‘…we as South Africans need to say what are the values and underpin what they are calling governanceandthereforeitconstitutesgoodorbadgovernance.’SouthAfricathereforeneedstoidentify the values, and hence the standards according to which it judges good/bad governance.38 39



Theme Descriptor

Need to identify and articulate values that underpin governance practice in South Africa

The values that drive/underpin governance practice in South Africa should be identified, communicated and entrenched in domestic discourse

Governance is not a neutral concept Governance is shaped by specific approaches, values and national objectives. To this end South Africa should be clear in terms of what it means by governance, and decide its own criteria for what constitutes good/bad governance practice

LeverageSouthAfricaConstitutionandcore democratic values

South Africa recognised as world leader in constitutional values and national governance framework creation. This can be utilised more effectively when positioning South Africa or marketing the country

Challenge – to show that a free democratic dispensation can deliver high levels of growth

South Africa needs to dispel myth that fast growing emerging market economies are successful due to lack of democratic dispensation

South Africa has well established public accountability structures

The National Assembly and other mechanisms for oversight are well developed in South Africa

Governance deficit and lack of imple-mentation capability

A governance and leadership challenge South Africa faces pertains to grand plans and policies that are not effectively implemented

Create shared value between business and government

It was noted that companies cannot only work for shareholder value. Their organisations should also work to create shared value for the nation/country they operate in

Country messaging and messengers Indicated that not only government is responsible for carrying a positive South Africa country message. Need to mobilise wider network of stakeholders to endorse, spread, and entrench elements of a comprehensive country message and value proposition

Need to better plan and synchronise work of different spheres of government

Noted that there is a need for closer cooperation between spheres of government. In this regard it was noted that service delivery issues in South Africa impact negatively on reputation of the country.

CONCLUSIONS-TOWARDSSOUTHAFRICANCOMPETITIVENESSFORUM2014

This section brings highlights from consultations and the forum together. The purpose of this section is to emphasise the need for action on the six agreed top-line outcomes of the forum, and to share in a refined format key themes and issues forthcoming from the breakaway working sessions at the forum of 5 November.

SIXAGREEDOUTCOMESOFSOUTHAFRICANCOMPETITIVENESSFORUM13

OnthedayoftheForum,BrandSouthAfrica’sDeputyChairannouncedsixkeyagreedoutcomesofthe day:

1. Establishmentofanimplementationtaskteamtoaddresstheexecutiondeficit

Action decided: Announce Task Team and Terms of Reference with release of full Outcome Report. Task Team to monitor implementation of agreed to collaborative projects to flow from South African Competitiveness Forum 13 decisions;

2. Setupaone-stopshoptodrive,consolidateandpositionSouthAfricaasanattractive destinationforinvestmentandbusiness

Action decided: Work with key government, business and civil society stakeholders, through

South African Competitiveness Forum Task Team, to identify viability and identify interim steps to address the issue;

3. Consolidatecountrymessagingtoenablebettercoherenceandaunifiedvoiceto position South Africa

Action decided: Brand South Africa to redesign provincial and metro CI training to knowledge sharing and consultation platforms – the strength of the nation brand is a combination of all constituent parts. Develop country messaging toolkit with sector-specific focus to share with Brand South Africa stakeholders;

4. Intensifyandfast-trackroll-outofenergyinfrastructuresothatdeliverycanmeet demandforfuturegrowthasoutlinedintheNDP

Action decided: Work with stakeholders and Task Team to design country messaging on infrastructure roll-out plans, as well as green and renewable energy initiatives in South Africa;

5. Leverageinstitutionalcapacity,skillsandknowledgetodrivecompetitiveness Action decided: South African Competitiveness Forum Task Team to advise;

6. Strengthenandamplifycurrentinitiativestodeliverqualityeducation Action decided: South African Competitiveness Forum Task Team to advise.

Governance and Leadership Session Themes

40 41



CONCLUSIONS FROM THE FORUM BREAKAWAY SESSIONS – 5 NOVEMBER 2013 The thematic issues from breakaway sessions frame some of the key conclusions and recommendations from the forum.

Theme Descriptor

Country reputation impact of negative perceptions on education

SouthAfrica’sprofileasinvestmentdestinationanditsinternalcapabilities questioned as a result of low standards of education.

Reputation implications of labour market instability

Delegates noted that uncertainty in the country fed by ongoing labour market issues. Need concerted effort to stabilise labour-government-business relations. Latterwillimpactpositivelyoncountryreputationandattractivenesstoinvestment, trade.

Development of managerial skills Poorly trained/skilled managers impact negatively on delivery capability in public sector. Need concerted effort to up-skill managers and instil values of delivery and service ethic to the public.

Broadband internet access for education not a luxury, but national necessity

Poor access to the Internet as a result of bandwidth challenges in South Africa, impacts negatively on roll-out of new technologies to deliver education in 21st century South Africa.

Showcase South Africa production of world-class skills

Showcase Global South Africans, their skills and expertise gathered in South Africa and how it is absorbed and utilised in international markets.

Celebrate and learn from existing national pockets of skills excellence

While South Africa has skills and educational challenges, also need to note strengths and accomplishments in sectors such as: Financial Services; Broadcasting; Media; Sports;Legalexpertise;CorporateGovernance.

Role of business and civil society in education and skills development

Noted that national centres of excellence should be created where graduates can gain work experience and develop skills relevant to industry.

Communicate more onaccomplishments South Africamade in 20 years of democracy

Important to keep on telling the positive South Africa story of a nation in transfor- mation post-1994. Need for clear understanding of national achievements to inspire South Africans.

Education, Skills and Labour Session Themes

Reputation implications of

education noted as challenge to the

nation brand

SACF-Keythemes from Regional

Consultations(incorporated into SACF

planning & briefings)

Business community

stakeholders to be equipped as

Nation Brand messengers

FDI flows and factors that

impact on SA as destination to be interrogated in

more detail

Nation brand to focus more on

city brands & their value add to nation

brand construct

Labourchallenges & role of good

governance in shaping

South Africa reputation

Need more consultative

knowledge & planning exchange btw Brand South Africa & regional

stakeholders

KEY THEMES AND ISSUES FROM BREAKAWAY SESSIONS AND LEARNINGS FOR BRAND SOUTH AFRICA

Key lessons learned

• Regionalconsultationmodelfoundeffectiveplatformforstakeholderengagementsand knowledge sharing. Brand South Africa resolves to continue with this model of regional interactions and to utilise workshop model applied in South African Competitiveness Forum breakaway sessions to maximise stakeholder input and participation for shared value creation; • Needformorefocusoncitybrandsandcontributiontonationbrand; • Focus on consultative knowledge and planning exchange between Brand South Africa, metros and regions; • MobilisebusinesscommunitystakeholdersasNationBrandmessengers;equipstakeholders with necessary country messaging and CI tools; • ReputationimplicationsofeducationandskillschallengesinSouthAfrica; • FDIflows,andfactorsthatimpactonSouthAfricaandregionalabilitytoattractFDIneedtobe properly analysed and actions taken to rectify.

Keyhigh-levelthemesfromregionalconsultation

Theme Descriptor

Challenges to competitiveness of South African manufacturing


Dwindling share of manufacturing in South African GDP

ShareofGDP:1986–22.7%;1994–18.7%;2012–17.2%.

LogisticsandexportcostchallengestoSouth African manufacturing

Due to high input and transportation costs, some South African manufacturers find it hard to be price competitive in global markets. Contributing factors that have economic and reputational impacts: Transport costs; Fuel and road haulage costs; Port charges. These costs, unique to internal logistics, freight, and bottlenecks in transport infrastructure, have an adverse impact on the global price competitiveness of South African manufactured goods.

Excellence in South Africanmanufacturing to be communicated domestically and internationally

Delegates noted several unique niche products manufactured in South Africa. Case studies of unique South African manufactured goods should be developed and included in country messaging, marketing and positioning strategies.

Need for steering committee/task team to revitalise South Africanmanufacturing

Delegates strongly suggested a government-business platform to be created to find new ways of expanding South African manufacturing profile.

Manufacturing and Related Services Session Themes

42 43



Theme Descriptor

Reputation risk of not implementing National Infrastructure Plan

The session delegates noted that South Africa has lots of news on infrastructure plans.Thereisaneedtoimplementtheseandshowactualresults.Lackingthis, thecountry’sreputationcansuffer

South Africa effectively delivered world-class infrastructure on time for FIFA 2010 World Cup

It was indicated that South Africa delivered all infrastructure projects on time for 2010. The question is, why now with the roll-out of critical national infrastructure plans is the country seemingly not able to deliver. Need to take a lesson from 2010

Regulatory environment impact on infrastructure delivery

One reason for delays in delivery of infrastructure projects noted as complex intrastate administrative processes between State-owned enterprises and regulators. Need more efficient system to bring projects from bankable feasibility stage to implemented reality

Create a sovereign wealth fund dedicated to national infrastructure development

Suggested that South Africa needs to create a sovereign wealth fund to support infrastructure delivery projects

South Africa needs to make more of its strategic position in Southern Africa

SouthAfrica’seconomic,politicalanddiplomaticinfluencetobeutilisedmore effectively to spearhead regional infrastructure development initiatives. This will benefit not only South Africa expansion in the region, but also regional development and integration

South Africa has to be positioned more‘aggressively’asserviceexcellence hub for Africa

Noted that South Africa plays the same role for Africa as Hong Kong does for China, or Singapore for South East Asia

South Africa suffered opportunity cost during commodities boom due to export infrastructure bottlenecks

Noted that insufficient infrastructure curtailed South Africa's ability to fully benefit from commodities boom of early 2000s (pre-financial crisis). This has both direct economic and reputational consequences for the country

Infrastructure as enabler of growth Noted that infrastructure investment is critical for expansion of South Africa economic base, and to address issues of historical regional, socio-economic imbalances

Infrastructure Session Themes

Theme Descriptor

Inclusive and coherent country messaging

Need for Brand South Africa to work closely with business and regional stakeholders to develop integrated country messaging and positioning strategy

South Africa as Gateway to Africa concept questioned

Noted that there are more than 50 African countries, how can one country be a gateway? Rather position South Africa as the Service Centre/Hub of the African continent

South Africa to use existing strengths to profile and position nation brand

Need to showcase unique South Africa strengths domestically and internationally

Need for coordinated international strategy between national, provincial and local government

Concerns raised that international delegations are not coordinated. Need higher level of coordination in country messaging and strategy for engagement in international markets. Currently uncoordinated and dilutes coherent country message

Policy uncertainty and need to locate economic policy in context of NDP

Delegates noted too many processes of policy change and revision. This creates uncertainty in the market. Need more implementation of existing policy and avoid continuouspolicy‘tinkering’andchange.NeedtoaligneconomicpolicytotheNDP

Need to contextualise and articulate policy, e.g. BEE

Policies unique to South Africa, such as Black Economic Empowerment codes, need to be explained and articulated better to get buy-in from international business

Need to mobilise South Africa business as country messengers

Delegates in this session, as well as those at regional consultation in Western Cape, noted natural limits of state-based/funded country promotion. Need to mobilise business community as country message carriers

Urgent need to create one-stop shop for international investors

Delegates noted with some concern that South Africa does not have a single one- stop facility that can cater for the administrative, information needs of investors

Need to actively promote and communicate South Africa'scompetitive advantages

To develop communications and marketing approaches that entrench and increaseawarenessofSouthAfrica’suniquecompetitivestrengths

Need South Africa uniquecompetitiveness/countryperformance tracking index

Noted limitations of third party indices, recommended that Brand South Africa work with stakeholders to gather input and identify key competitiveness and socio-economic indicators to include in such an index

FDI Competitiveness Session Themes

Theme Descriptor

Need to identify and articulate values that underpin governance practice in South Africa

The values that drive/underpin governance practice in South Africa should be identified, communicated, and entrenched in domestic discourse

Governance is not a neutral concept Governance is shaped by specific approaches, values and national objectives. To this end, South Africa should be clear in terms of what it means by governance, and decide its own criteria for what constitutes good/bad governance practice

LeverageSouthAfricaConstitutionandcore democratic values

South Africa recognised as world leader in constitutional values and national governance framework creation. This can be utilised more effectively when positioning South Africa or marketing the country

Challenge – to show that a free democratic dispensation can deliver high levels of growth

South Africa needs to dispel myth that fast growing emerging market economies are successful due to lack of democratic dispensation

South Africa has well established public accountability structures

The National Assembly and other mechanisms for oversight are well developed in South Africa

Governance deficit and lack of imple-mentation capability

A governance and leadership challenge South Africa faces pertains to grand plans and policies that are not effectively implemented

Create shared value between business and government

It was noted that companies cannot only work for shareholder value. Their organisations should also work to create shared value for the nation/country they operate in

Country messaging and messengers Indicated that not only government is responsible for carrying a positive South Africa country message. Need to mobilise wider network of stakeholders to endorse, spread, and entrench elements of a comprehensive country message and value proposition

Need to better plan and synchronise work of different spheres of government

Noted that there is a need for closer cooperation between spheres of government. In this regard it was noted that service delivery issues in South Africa impact negatively on reputation of the country.

Governance and Leadership Session Themes

44 45



Notes

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