Gauteng Business 2016 edition

SPECIAL FEATURE

SPECIAL FEATURE Provincial Government - and it was a move that will surely secure confidence among South Africa’s fellow BRICS members. Industry Although the province boasts a well-balanced industry across all the major sectors, the most important economic sectors are financial and business services, logistics and communications, and mining, making it the financial capital of the country and the continent. With more than 70 foreign banks having their head offices in the province, and at least that number of South African banks, stockbrokers and insurance giants, the country’s economic hub is set and perfectly aligned for international trade and investment. Saying that, Gauteng’s economy has, over the last few years, been moving away from traditional heavy industry markets and low valueadded production towards sophisticated high value-added production, particularly in information technology, telecoms and other hightech industries. Labour Looking at the labour market in South Africa, Gauteng compares very favourably with the other provinces. Though it is a fact, the country’s unemployment rate is high and the trend is still increasing. Some consolation, if any, is the fact that amidst the rising unemployment levels, employment in the country has also increased since 2011 to more over 1.1-million. Between 2010 and 2014 earnings levels increased in all industries, with the exception of community and personals services (down R1 000). The largest increase in earnings was observed in mining (R2 000), utilities (R1 000) and agriculture (R858) – all areas in which Gauteng is taking a lead role in the production arena. Earnings growth over the period was robust in skilled occupations, in particular Managers (R5 000) and Professionals (R4 400). According to Stats SA, at provincial level, median earnings in 2014 were highest in Gauteng and the Western Cape, while earnings increased the most over the period 2010–2014 in Gauteng (R833), Free State (R500) and the Western Cape (R423), making the province a popular space for young graduates to seek employment. This would also explain the influx of young professionals into the province, thus largely complementing the growing economy. Furthermore, studies revealed that while young people are less likely to transition into employment compared to adults, in 2014 these transition rates were highest in provinces such as Western Cape (6,9%), Mpumalanga (6,4%) and Gauteng (6,1%). Government job creation programmes The South African government has since the advent of apartheid, continuously been introducing new job creation programmes in the country and by 2014 awareness about the Expanded Public GAUTENG BUSINESS 2016 76

SPECIAL FEATURE Works Programme and other government job creation programmes increased from 42,8% to 52% in 2014. The Eastern Cape accounted for 22,7% of those who participated in these programmes, followed by Gauteng (17%)—thus raising the level of job creation and in the process favourably boosting the province’s readiness for direct foreign investment. Demography While Gauteng is the country’s smallest province (with a total area of 16 548 square kilometres), it has the largest population, and by far the highest population density—around 675 people per square kilometre. Compare that to the Northern Cape with an average of around three people per square kilometre, the province should have no shortage of citizens to participate in its lucrative economy. As at 2015, the population of Gauteng was estimated to be 13.2-million. Furthermore, the province’s cosmopolitan mix of local and foreign cultures, also forming part of the business world and adding extra diversity to the economic landscape, sets Gauteng (and the businesses within it) apart from the rest as a region of tremendous trade and investment possibilities. When it comes to education, especially on a tertiary level, the province is set-up for a reasonably established system that will serve generations to come. Prime examples are the largest residential university in South Africa (the University of Pretoria) and UNISA, the latter being the largest correspondence university in the world. Most of South Africa’s research and development takes place in Gauteng, which is home to many of the country’s core biotechnology companies. Leading research institutions such as the Council for Scientific and Industrial Research, the Agricultural Research Council and the Onderstepoort Veterinary Institute. 77 GAUTENG BUSINESS 2016