The document provides an overview of baseline socioeconomic data for the Eastern Cape province of South Africa. It summarizes that the Eastern Cape has high levels of poverty, poor access to basic services, and low levels of educational attainment. While the province has a large agricultural sector, most farms are failing. The Eastern Cape also has a vulnerable automotive industry and performs poorly on measures of research and development. Overall, the data indicates that the most productive people are leaving the province and an innovation system does not yet exist in the Eastern Cape.

1. COFISA: Foresight
for Provincial Innovation
Eastern Cape
A Baseline Data Snapshot
Regent Hotel, East London, 1st November 2007
Peter Greenwood & Bob Day
Non-Zero-Sum Development

2. Data sources
• COFISA baseline data study
– In progress for E Cape, W Cape and Gauteng (IsambuloAMI)
– Meta-data for ~800 datasets, at different degrees of
disaggregation
– CeSTII innovation data disaggregated to provincial level by
December
• Eastern Cape baseline data
– Only ~30 datasets currently (freely) available with data that
is disaggregated down to the province or finer
– Our sources for Eastern Cape:
• Human Sciences Research Council
• Eastern Cape Socio-Economic Consultative Council
• Statistics South Africa

3. Topics
• Population, Poverty and Basic Services
• Education
• Eastern Cape PGDP
• Industry
• Research and Development

4. Population, Poverty
and Basic Services

5. Eastern Cape
population growth
6.6
6.5
EC Population (millions)
6.4
6.3
6.2
6.1
6
5.9
1996 2001 2007
Year

6. Population by age group
E. Cape and SA (2001)

7. Urban and non-urban
distribution by province

8. Urban and non-urban
distribution by district

9. People in poverty:
Number

10. People in poverty:
Percentage

11. %age of households
with mains electricity

12. %age of households
with access to piped water

13. %age of households
using bucket or no toilets

14. %age of households
with municipal refuse removal

15. Education

16. Percentage school
attendance of 7-15 year olds

17. University growth points:
Publications
• Fort Hare
– Biological sciences
– Physical sciences
• Rhodes and Nelson Mandela Metropolitan University
– Biological sciences
– Information sciences
– Computing sciences
– Communication sciences
• Walter Sisulu University of Technology
– Only shrinkage!

18. Eastern Cape
Provincial Growth and
Development Plan

19. Provincial innovation
systems in South Africa
“But what emerges from the work so far
suggests that regional or local innovation
systems exist, if at all, only in Gauteng and
Western Cape, and possibly in KZN, but
nowhere else.”
REGIONAL AND LOCAL INNOVATION SYSTEMS A study on
behalf of NACI
March 2007 (unpublished)
So: an innovation system does not yet exist
in the E Cape

20. Eastern Cape
PGDP
• Emphasises
– Linkages between sectors
– Linkages within the region
– Diversification of the manufacturing base
• Calls for
– Research partnerships
– Capacity building for the development of technology
– Participation of local universities
– R&D funding to be made available
• But
– Little knowledge of the actual strengths (or lack thereof) of
the institutions the PGDP wants to involve.

21. Industry

22. Industrial
specialisations
(Provincial share >20% of national total)
• Gauteng • Western Cape
– Manufacturing – Agriculture, forestry and
• Metals, metal products, fishing
machinery, equipment – Food, beverages and
• Other non-metal mineral tobacco
products – Textiles, clothing and
• Electrical machinery and leather goods
apparatus – Finance and business
• Radio, TV, instruments, services
watches, clocks
• Furniture and other
manufacturing
– Construction • Eastern Cape
– Wholesale and retail trade, – Transport equipment
catering and
accommodation
– Finance and business
services

23. Eastern Cape
automotive industry
• Worldwide, current and prospective
automotive manufacturing capacity
outstrips demand
• Indian and Chinese plants have advantage
due to size of domestic market
• Therefore, motor industry in E Cape is
vulnerable

24. Global supply chain
and sustainability
• Integration into global supply chains can be
positive
– Education, training, technology upgrading, innovation
• But reliance on foreign investment is not a long-
term strategy
• The global economy may favour a specific location
one day, and abandon it the next
• Challenge: to organise industrial development
sustainably, through harnessing the interactions
that characterise a regional (i.e. provincial)
innovation system
• A HUGE task, to which the private sector will not
rise without incentives and partners

25. Farming operations
(2001)

26. Research &
Development (R&D)

27. R&D specialisation
in the Eastern Cape
• Investment in R&D • Publications
– below threshold
– Manufacture of paper
and paper products
– Manufacture of
motor vehicles, etc
– Water transport
– Advertising

29. Technology
Achievement Index (TAI)
The provincial TAIs ranking as follows:
• Top:
Gauteng, Western Cape, and KwaZulu-Natal
• Average:
Mpumalanga, Free State, and North West
• Bottom:
Eastern Cape, Northern Cape, and Limpopo
(DST 2005, 28)

30. Summary
These data seem to indicate that:
• E Cape’s most productive (& innovative) people
“abandoning ship”
• Origin of poverty rural – urban poverty inherited
• E Cape’s poor live in worst conditions of RSA
• HEI researchers not playing a leadership role
• Strengths and weaknesses of “growth/innovation
relevant” institutions not mapped (PGDP)
• “Star” automotive industry is vulnerable
• E Cape has most farming units in RSA, but most
failing both food security and export goals
• Under-performing on main aspects of R&D

31. %age of households
with access to piped water

32. %age of households
with access to piped water

33. Black population
E. Cape (2001)

34. White population
E. Cape (2001)

35. %age of households
living in informal dwellings

36. Educational attainment
20+ years (2001)

37. • Three provinces – Eastern Cape, Free State, and Northern Province – are not
specialised in any economic activity where the provincial share in the national total
reaches 20 per cent. Even if the threshold had been set at ten per cent, they would
hardly show up, with the exception of community, social and personal services in the
Eastern Cape and mining in the Northern Cape. Another three provinces –
Mpumalanga, Limpopo, and North West – are specialised in one and the same
activity, namely mining. The Western Cape is specialised in agriculture, forestry, and
fishing, and in finance and business services. KwaZulu Natal has three
specialisations and Gauteng four. These two provinces are the only ones with
specialisations in manufacturing (see Figure 1).
• When secondary activities are disaggregated, Eastern Cape and Western Cape
contribute with specialisations in transport equipment, reflecting the automobile
industry around East London and Port Elizabeth, and food and beverages as well as
textiles in the Cape. Mainstays of KZN manufacturing with national importance are
food, beverages, and tobacco; textiles, clothing, and leather goods; wood and paper;
publishing and printing; and furniture. Gauteng is the only province with high-tech
manufacturing; next to non-metal mineral products, metals and metal products, and
furniture, it is specialised in electrical machinery and instruments.

38. • Provincial development authorities in the Eastern Cape pay a lot of attention to
attracting new industrial investments, especially FDI, but there is a lot less focus – or
maybe none – on retaining accumulated absorptive capacities in the form of
multinational firms who for whatever reason extricate movable capital equipment and
strategic assets such as group-internal core competences but who leave skills and
also a fair amount of tacit production and process knowledge behind. In the context of
the automotive industry – indisputably the primary technological and organisational
core of economic upgrading in the region – this suggests at best a lucky midterm
horizon with a high risk of running foul of events beyond the control of provincial or
even national policymakers, namely the fickleness of the key players in global
automotive assembly. In other words, local development strategies with enough
foresight would accompany the justified courting of DCSA with at least some
brainstorming in conjunction with industry and other stakeholders about a possible
post-DC world. At numerous component supplier plants, this is certainly of interest to
management and employees. It is not clear that public stakeholders in the Eastern
Cape appreciate this, let alone guide attendant soul-searching. This implies that what
may endanger the future of the regional economy is not so much local capabilities per
se, but a failure to coordinate the setting of priorities, identification of linkages, and
selection of public interventions within a larger vision for local development in the face
of global change. In other words, it is the very absence of a regional innovation
system that makes for trouble.

39. Percentage of households
using electricity for lighting

40. Percentage of households
using electricity for cooking

41. Number of unemployed people

44. Eastern Cape
Provincial Growth and Development Plan
Role of Systemic Innovation strategy
innovation in requirements
development
Research Regional growth Capacity building in
partnerships points; research and
for technology Promotion of technology
development linkages to other development;
sectors, esp. Funding for R&D and
agriculture and partnerships (e.g.
agro-processing AIDC, ICT
Development
Programme)

45. Thank
You
bday@scientia.co.za