4. Economic trends & the productive city

1. 4. Economic trends & the productive city PRODUCTIVE CITY Key issue: Can the local economy provide a majority of residents with means to earn a reasonable living? INCLUSIVE CITY Key issue: Do residents have the opportunities and capacities to share equitably in the social benefits of city life? CITY POPULATION Key issue: What will be the future size, form and character of urban populations, given the commitment that residents have to lives in the city? SUSTAINABLE CITY Key issue: How is the city impacting on the envelope of natural resources that sustains the settlement and makes it livable? WELL-GOVERNED CITY Key issue: Is the political & institutional context stable, open and dynamic enough to accommodate all interests

2. 4. Economic trends & the productive city Population growth and economic growth are closely linked If cities cannot provide populations with opportunities to use their productive capacity, and be adequately remunerated for this, they may disinvest • Key issues examined in report: • Economic value growth in cities and key sectors • Employment & unemployment • Distribution of income • Key micro-economic factors impacting econ development • Prospects for city economic development strategies

3. 4. Economic trends & the productive city GVA growth averaged 2,2% across 9 cities between 96-01. And in some cities very strong growth But GVA per capita growth did not keep pace • Fastest growing for 96-01 was Tshwane. Continued in 01-02 • Some cities seeing recent slowdowns? • Others (eg Msunduzi) a turnaround?

4. 4. Economic trends & the productive city 2001-02 annual growth rates per sector shows differences across a sample of cities, although some, such as transport, storage and comms, uniformally strong

5. 4. Economic trends & the productive city 2001-02 annual sub-sector growth rates within manufacturing also show key differences

6. 4. Economic trends & the productive city Census data shows SA as a whole created a net 469 927 new jobs in 96-01. More than half of these – 247 672 – were formed in the nine SACN cities. But … • Unemployed also grew 1 117 475. LFS shows expanded unemployment 35,72%

7. 4. Economic trends & the productive city The strength of the local economies of the nine SACN cities needs to be seen in a long term perspective of economic restructuring • Long term decline in manufacturing employment, especially in key centres • Long term growth in employment in the finance / business sector

8. 4. Economic trends & the productive city • Cities with a long term fall in manufacturing employment saw growth in this sector in 1996-2001 • Note especially the recent growth of manufacturing jobs in Johannesburg and Ekurhuleni However some surprising recent turnarounds

9. 4. Economic trends & the productive city Jobs growth/decline in occupations follows trends in key sectors. Worrying falls in professionals and pvt household employees

10. 4. Economic trends & the productive city GVA growth does not lead to the same increase in emplyment in all sectors

11. 4. Economic trends & the productive city Incomes earned from employment still reflect the very serious racial imbalances of apartheid • Larger numbers of black income earners earning near the lower income brackets • Total earning power clearly skewed towards white earners

12. 4. Economic trends & the productive city In some cities unemployment is so high, and average monthly income so low, relative to other parts of country, that it does not make economic sense to remain there

13. 4. Economic trends & the productive city • The key reason for economic weakness is insufficient demand & inadequate use of productive capacity. But also micro-economic constraints Various reasons for economic strength/weakness and strategies to address

14. 4. Economic trends & the productive city • Some cities see global demand as answer & have set out to promote exports by addressing constraints on micro-economic competitiveness. As part of this are trying to address institutional inefficiencies, skills gap, etc • Very NB that traditional LED not only focus. But will global economy provide stable & sustainable demand?

15. 4. Economic trends & the productive city PRODUCTIVE CITY Key issue: Can the local economy provide a majority of residents with means to earn a reasonable living? INCLUSIVE CITY Key issue: Do residents have the opportunities and capacities to share equitably in the social benefits of city life? CITY POPULATION Key issue: What will be the future size, form and character of urban populations, given the commitment that residents have to lives in the city? SUSTAINABLE CITY Key issue: How is the city impacting on the envelope of natural resources that sustains the settlement and makes it livable? WELL-GOVERNED CITY Key issue: Is the political & institutional context stable, open and dynamic enough to accommodate all interests