Diversification the way to go in a changing world
Change is inevitable — what matters is how we anticipate and respond to it.
By planning for change, we can find opportunities for growth and evolution and build adaptability and resilience.
It is common cause that the world is facing increasingly rapid change across a wide and complex span of issues.
Most recently, global tariff wars and upheavals in economic and geopolitical relationships have been layered onto the impacts of climate change and technology advancement and automation on economies and societies.
This all ripples into our local manufacturing- and exports-driven economy and its employment capacity, in turn affecting the tourism, hospitality, retail and services sectors.
We have also long known that our local economy is over-reliant on the automotive industry, now facing unprecedented challenges due to the shift to new energy vehicles in key export markets and the impact of cheaper imports into the local market.
Diversifying the local economy in the face of change is increasingly urgent, not only for retention of existing investments and employment, but also to attract new investments in future-orientated sectors which build on our existing strengths in manufacturing, technology and agro-processing, and create new jobs along a localised value chain.
The NMB Business Chamber set up the Local Economy Reinvention Think Tank about two years ago to respond to that challenge, to look forward into a changing world and identify opportunities to build a diversified, sustainable manufacturing and exports hub for the continent.
We brought together some of the Bay's leading innovative thinkers, challenging them to think out of the box on what the economy of the future could look like and map the path to adapting our current strengths into new areas of economic activity.
Shifting to a low-carbon economy is a priority, while it is also critical that identified projects must be scalable and self-sustaining, able to stand up as viable business cases.
It is also crucial not only to create new jobs but to grow a pool of 'future fit' skills in the metro.
Think Tank workstreams are investigating local economic opportunities linked to the planned Hive Hydrogen green ammonia plant at Coega; and fuel cell technology and manufacturing, alternative mobility solutions and new energy vehicle technology, adaptation of manufacturing activities to reduce carbon footprints (and local development of the technology to do so).
Several of these prospects have now moved from the brainstorming stage into technical scoping and feasibility assessments captured into 'white papers' outlining the strategic, operational and financial model of a specific project and its forecast economic and social impacts.
We have taken a value chain approach that aims not only to diversify local manufacturing, but to stimulate up- and downstream linkages that support local participation by both small and large businesses at various points in the supply chain.
For example, our white paper on a proposed industrial hemp project — based on this crop's existing viability in the Eastern Cape, but hampered by quality and consistency of supply — starts with integrating small-scale farming and commercial agriculture enterprises into a value chain of agro-processing, manufacturing and end-user supply.
The project scope encompasses training and ongoing mentoring to enable farmers to meet quality and volume requirements of the agro-processors they will supply.
This 'link' in the value chain is intended to empower rural communities around the Bay and create jobs in those areas.
It also links into local opportunities for SMMEs to manufacture products and supply services to support the agricultural element.
A further link is into the logistics, storage and transport of the raw product, then into a local agri-processing plant, and onward into supplying national and global hemp value chains to meet the demand for renewable and low-carbon materials in diverse sectors.
The automotive manufacturing sector is a key target, for sound-deadening and insulation components from renewable sources.
Further hemp value chains include manufacturing of biofuels, biodegradable plastics and textiles, hemp seed oils, biomass for energy generation, carbon credit trading and battery chemicals and components.
Each of these holds potential for a local business or incoming investor to capitalise on the opportunity and enter the value chain at a point aligned to their existing business or to diversify their operations.
Pre-feasibility assessments are also under way on local manufacturing and installation of solar geysers and small-scale hydrogen generation and storage for cleaner, greener residential energy, as well as a project for carbon dioxide capture and electrochemical conversion, to 'green' the industrial energy supply.
The Think Tank will release these white papers into the public domain, detailing the feasibility and the logistics of implementing these concepts, for consideration by entrepreneurs, investors, green venture capitalists and government.
The benefit is that we have done the groundwork, and we may have insights and information which others don't have, but we are not saying we are 100% correct.
We want to stimulate thinking, provide a spark for bigger ideas and collaborations to evolve; for interested parties to take them up, run with them, expand on them and turn them into profitable enterprises.
Watch this space.
Kelvin Naidoo is m anufacturing and technical director of Auto-X and a cting president of the Nelson Mandela Bay Business Chamber.
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