Improving the business and investment climate in the Western Cape: The role of a Provincial Competitiveness Index.

1. Improving the business and investment climate
in the Western Cape: The role of a Provincial
Competitiveness Index

2. Why a provincial competitiveness index?
Provide information to enhance decision-making:
1. For business to determine and validate investment plans
and to assess locations for new operations
2. For communities to hold government accountable
3. For government to benchmark policies and programmes
4. For analysts to evaluate how regions and enterprises
compete on domestic and world markets
5. For transition managers to improve the performance of
the economic delivery system

3. Definition of regional competitiveness
“The ability to attract, retain and develop
firms, other entities and entrepreneurs, with a
stable or rising market share, while linking leading
and lagging areas and increasing the rate of
economic participation and the quality of life of
residents, now and in the future”

4. Model of regional economic competitiveness
Competitiveness factors
Competitive performance
Feedback effects
Use of resources
Productivity Trade
(labour & land)
Key drivers
Technology & Industrial Business ownership Skills &
Connectivity
innovation structure & management capacity
Business & Education, Land supply
Quality of life & Governance
investment training & and physical
amenities & institutions
climate research base infrastructure
Source: Turok, 2006 adapted from Cambridge econometrics

5. Connecting long-term to short-term indices
“Blombos Cave Index”
(monitoring the long-
term transition
Provincial towards an
Competitiveness Index inclusive, resilient and
(better business and competitive regional
Red Tape Reduction investment climate and economy)
Unit (ease of doing enhancing the factors
business) of competitiveness)

6. Source: WCG Red Tape Reduction Unit

7. Source: WCG Red Tape Reduction Unit

8. Source: WCG Red Tape Reduction Unit

9. From Red Tape to Green Carpet
10 measures to improve EIA planning and decision-making
Directorate Development Facilitation, Department of Environmental Affairs
and Development Planning, WCG

10. Provincial Competitiveness Index
1. Regulatory environment
Low barriers to Transparent legal
Enforceable
entry for new and business
contracts
businesses information
Burden of
Ease of trading
complying with
across national
bureaucratic
borders
procedures

11. Provincial Competitiveness Index
2. Role of government
Proactive and Consistent and
Business
creative predictable
incentives
leadership policies
Generating Crime and
future skills violence

12. Provincial Competitiveness Index
3. Resources and infrastructure
Labour:
Municipal
Infrastructure availability of
services
skills
Labour:
Access to
dispute
credit
resolution

13. Provincial Competitiveness Index
4. Sustainability
Business support
Employment
and professional Cost of living
creation
services
Environmental
Quality of life
regulation

14. Multiple dimensions of business and investment climate
success
Scale specific
• Success is determined by processes that are international, national and sub-
national
Sector specific
• For example, export businesses will have different needs to SMEs in services
sector
Business type specific
• Needs of large corporations, SMEs, entrepreneurs and informal sector differ
More than regulation and legal frameworks
• Connectivity, quality of life, cost, human capital, markets, environment
More than FDI attraction
• Establishment, growth and retention of existing businesses as important

15. Roundtable Discussion 2
Business and Investment Climate Index
1. Informal businesses
2. Small, medium and micro
3. Corporates and multinationals
4. Municipalities
5. Investment strategies