RAY SMUTS NOW IS the time for serious debate on where the Western Cape is headed over the next quarter of a century, in order to ensure it remains competitive on the domestic and international fronts, says Wesgro's Nils Flaatten. “I am not saying we are in trouble but we need to have a serious debate on this province. If we do not take good stock of where we are and determine where we must be, we could get lost in the melée,” says Flaatten, acting CEO of Wesgro, investment and trade promotion agency of the Western Cape. Referring to what he terms the ‘Northward drift’, the tendency by many talented Western Cape people to head for more lucrative opportunities in Gauteng, Flaatten concedes the ‘orange light is flashing on the dashboard’ but he does not believe it’s cause for alarm. He remains convinced that one question requiring an answer is the degree to which the province is changing because history has already recorded that its economy has over the past decade transformed from a manufacturing and agriculture to a services economy. This is borne out by many companies, ranging from retail to international oil, banks, asset managers, media and black empowerment companies, setting up their head offices in the Western Cape. “We have to ask ourselves whether the Western Cape is transforming itself once again. “In my opinion, we have emerged as a centre of excellence for design, innovation and creativity over the past two or three years, not just in fashion but in many spheres like architecture, electronic products, medical design, electronic gaming and luxury boat building, the latter an estimated R1 billion a year industry of which the province has the lion’s share.” In light of this fairly new diversification, Flaatten believes the province should start positioning itself under three distinct headings – design, innovation and creative excellence, which will in all likelihood attract specialised niche financial services, call centres, hedge funds and IT outsourcing companies in future. He says the province requires a 25-year vision of where it is wants to be and as a matter of importance it must address strategic infrastructure to make it easier and more accessible to do business in the province. Looking ahead, Flaatten sees Cape Town remaining the headquarters of many South African and international companies, including those companies using Cape Town as their Africa head office. This as the focus intensifies on the lucrative gas and oil in West Africa, in which the Mother City port and the port of Saldanha have a special role to play. Working to a budget of under R17 million a year – what some describe as ‘minuscule’ given the scope of the job at hand – Wesgro has overtaken its three-year target of attracting R5 billion in foreign direct investment. Its vision is to make Cape Town and the Western Cape the world’s most competitive business destination by 2014. Flaatten considers the road forward will be ‘quite tough’, citing Bureau of Economic Research data which suggests the province will move from 4.7% growth in 2006 to 4.5% this year and 4.8% in 2008. Wesgro’s Global Business Intelligence Unit states exports at 22.4% accounted for one of the highest contributions to the Western Cape GDP in 2005, an indication of the province’s increasing integration into the global economy. The province’s rising trade deficit notwithstanding, total West Cape exports reached R37.9 billion, growing at just below 12% in real terms since 2004. Leading exports (as in previous years) included refined petroleum products, fruit, wine fish and other seafood and iron and steel products. The Business Intelligence Unit’s Riefqah Jappie and Lizanne Case report that while traditional markets such as the EU and US represent the staple of the Western Cape economy, the fastest growing markets are perhaps the most dynamic – the regions of Asia and Africa.
