WC SPVs and clustering policy pays off and creates jobs

December 1, 2014
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In 2004, the Western Cape Government developed the Special Purpose Vehicles (SPVs) programme to focus on priority industrial sectors important for regional economic development. Developed in line with international best practice around cluster development principles, the programme includes 11 SPVs across various industries and includes examples such as Business Process enabling South Africa (BPeSA), for BPO and call centres; GreenCape, supporting the green economy and renewable energy sector; and the South African Oil and Gas Alliance (SAOGA), for the upstream oil and gas servicing sector.

To understand the impact that the SPVs have had on the Western Cape, a recent report was launched. This highlighted that the SPVs managed to secure additional investments from both private sector and national funding of R186m, that 5000 firms were supported, 23,000 learners trained, and that R10 billion in new orders and investment was made in the Cape.

The report also highlights the more visible legacy that the SPVs are generating, including:

  • An increase in oil rigs which generate in excess of R1billion of repair work in Cape Town harbour and the oil and gas servicing hub being created in the Saldanha IDZ
  • Start-up incubation facilities such as the Bandwidth Barn and the craft Fablab
  • The Cape Town Film Studio where international feature films and series are produced
  • Education and training facilities such as the boat-building academy at South Peninsula College, the Northlink FET Tooling Centre, and the Business Analysts and System Analysts programme for the ICT industry

There are also numerous examples of where the SPVs are influencing economic policy, including:

  • The promulgation of the boat-building and the oil and gas servicing sectors as priority sectors under the national industrial policy
  • The development of a major incentive for the clothing and textile industry, that has already seen more than R1billion (out of R3billion) invested into rejuvenating the industry
  • New incentives being developed for the aqua-culture and film sectors
  • The launch of a national furniture innovation award scheme off the back of a local pilot
  • The success of the Western Cape Tooling Initiative’s TDM-Powered training programme that has now been replicated across the other major provinces

Nigel Gwynne-Evans, Acting Chief Director for Trade and Sector Development, states that the programme has led to more than 35 000 jobs being created or sustained in the Province’s priority sectors. If one uses an employment multiplier of 2.5, which would be the median for the manufacturing and service sectors, this points to over 100 000 jobs being created or sustained in the Western Cape, owing in part to the Department’s interventions.

Looking ahead, the SPVs will play a critical role as delivery vehicles within the objectives of the Economic Development Partnership and, with the support of Wesgro, will continue to uplift and expand opportunities for the Western Cape’s priority sectors. The Western Cape Government has recently embarked on a McKinsey facilitated process, Operation Khulisa, which will add further impetus to the Department’s focus on facilitating high impact interventions through its SPVs and sector team.

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