It appears that to a large extent the productive sector in South Africa has been left on autopilot by policymakers and government. The idea behind it being that the private sector is sufficiently capable to navigate the route to growth without assistance and even with headwinds. With this background, government has sought to implement policies that it believes will improve equality and address the social difficulties faced by so many South Africans. Without judging the effectiveness of these actions, it appears a noble purpose.
Unfortunately, autopilot is not really working. I think we need to change focus, if only temporarily, in order to ensure that there is an economy in place to support the social ambitions of our government and needs of our people.
The key to this is competitiveness. Too often, I read in these pages that a sector is in crisis and that confidence is down. We need to turn a corner and sharply. We need to take a harsh look at the sectors in which we are on the cusp of competitiveness and do what is necessary to get there. The Department of Public Enterprises' CSDP initiative from a few years back had some good ideas but was not enough. We need a focussed set of projects to go grab these sectors and pull them up by the bootstraps.
I understand there are untouchable barriers to competitiveness such as labour and BEE. These are not disastrous and can be compensated for by sufficient determination. By determination I mean targeted capital contributions, skills and technology transfers, medium sized business support and so on.
In doing so, we must be realistic about which industries we target. While I would love it if we were able to be a financial powerhouse and leader in technological development, we simply lack the short term skills. The finance sector can take care of itself and frankly, we are behind on most technologies we are trying to introduce (notably in the hydrogen economy).
This will cost money but it will be a debit in the asset column and not on the income statement.
