Sure an economies cycle of growth and decline is never over but most people I know are pessimistic (at best) about the future of our economy and being in a sector that looks for growing businesses I found myself asking – where is the light?
A recent research report by McKinsey Global Institute, South Africa’s Big Five: Bold Priorities for Inclusive Growth provides a view into the enormous opportunity within the South African economy.
Despite the systemic challenges we all speak of regularly and the increasingly despondent discussion had at almost every dinner table, board room and social event – the future of SA can look bright – so bright that this report outlines focus area which can result in an incredible 3.4million new jobs and 4.7% GDP by 2030.
In 2030, 10 year olds of today will be 25 and entering the job market. 25 year olds of today will be starting or growing their own businesses with skills and networks development and the rest of us would have gotten on the band wagon or be too late. Knowing these sectors is an advantage to each of us.
I don’t believe in “too late” but we should all take into account that more millionaires were born from the 07/08 financial crisis – opportunity is where lack is… so here’s the crux of what the guru’s at McKinsey are saying in their 164 page document.
There are 5 Big Sectors for growth;
- Advanced Manufacturing:
High value production through economies or scale and the use of technology in this already highly significant sector of the economy focusing on autos, industrial equipment & machinery and chemicals has the potential to triple in size.
Whilst infrastructure projects are being announced areas in energy, water and sanitation will require strong Public Private Partnerships.
- Natural Gas:
I attended the Oil and Gas Exhibition at Sandton Convention Center this week and was amazed to learn how through an integrated approach in utilizing gas for local and regional consumption that the single biggest obstacle to growth on the continent can be resolved. Natural gas plants are fast to build and entail low capital costs – gas can be imported and if reserves are proven sourced locally.
- Service Exports:
South Africa has highly developed service industries, yet it currently captures only 2% of the rest of sub-Saharan Africa’s market for service imports, which is worth nearly half a trillion rand. Identified sectors include the financial and construction sectors.
- Raw and Processed Agricultural Exports:
With consumption rising in markets throughout sub Saharan Africa and Asia, South Africa could triple its agricultural exports by 2030.
“The big five are mutually reinforcing, and their successful implementation will benefit many other sectors of the economy. All of them depend on two critical enablers, though: building South Africa’s skilled labour force through a dramatic expansion of vocational training, and forging a true development partnership between government and business.”
The lesson from this report is: while in the tunnel make sure your on the right track, find niche and growing markets to enter or affiliate with, up-skill and improve productivity and strategically find partnerships and solutions to help you achieve this. The opportunity is available for those that will seek improvements in their current businesses, invest wisely and utilize the enabling mechanisms they may have available to them to grow the economy and walk the long walk to economic freedom – it could be just 15 years away.