Job Creation Blue Print: briefing

Meeting report

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
4 June 2003
JOB CREATION BLUE PRINT: BRIEFING

Chairperson: Ms C Nkuna

Documents handed out
Job Creation Blue Print

SUMMARY
The Committee was briefed on the Blue Print for Job Creation discussing growth and employment to the jobless. This project was envisaged as a way in which to create wealth in South Africa by means of labour-intensive, community-building and development. The concept had been met with success in the United States, Europe and China.

Discussion
The Chair said that the Chair of the National Council of Provinces (NCOP) had requested that the Committee liaise with Mr Greville on the Job Creation Blue Print.

Blue Print for Job Creation
Mr Wood said that the Blue Print was for a new socio-economic order that would complement Growth, Employment and Redistribution programme (GEAR). The Blue Print could be incorporated into rural Africa and sustainable factories could be coupled with organic, science-based farming to generate income. The aim of the Blue Print was to make labour the source of wealth creation.

Mr Setona (ANC) said that this was most innovative and commented that it seemed to be based on the shortcomings of GEAR. He asked about the inclusion of other policies addressing joblessness.

Mr Wood explained that a pilot development project was necessary before other entities could be incorporated. The knowledge would then be transferred to the communities so that the people could begin manufacturing. He described the four main sources of wealth creation as mining, forestry, agriculture and manufacturing, with the latter by far exceeding the most lucrative. The emphasis was on housing, schools and communities.

Mr Wood explained that brick housing was wrong for South Africa and referred to letters from Anglo-American South Africa (1988) and Keeve-Steyn (1993) to show that these companies shared the sentiment. All manufacturing relied on research and development (R&D) and that the prime consideration was engineering on the R&D basis. All raw materials were to be found in South Africa and people could be given jobs to manufacture products and then import them. He added that there were good technical schools in South Africa that could be used as focal centers in regions.

Mr Wood said that the automation process would be reversed with the implementation of the Blue Print so that the value of human work could be rediscovered. Systems should be used to upgrade and not destroy people in business. The idea enjoyed a great deal of support but there were many sociological and integration problems to be dealt with. For this reason, the pilot project was very important.

In three to five years there could be 150 factories across South Africa. Houses and communities would be built for and by the people using labour intensive tooling. He emphasized that the concept itself was labour-intensive instead of capital intensive. The management system was described as being internet-based so that all factories would have access to it and be operated in the same way all over the country. Regarding the concept of telemedicine, a problem on site could be photographed, emailed to the control room and resolved there. In this way, the expense of bringing high expertise to the site would be saved. This proved that factories could be set up anywhere in Southern Africa.

Discussion
Mr Taabe (ANC alternate) commented that prefabricated constructions had been encountered before and that these were actually more expensive to construct. How was Mr Wood's idea was different to this?

Mr Wood said that his houses were not prefabricated but manufactured. A proper process was followed in accordance with international standards. Such constructions were found in the United States and Europe, but these were highly skilled societies. South Africa, in comparison, was a low-skilled country wherein every step of the manufacturing process had to be controlled. Building societies would definitely bond these houses so that they could be regarded as an asset. Mr Wood said that the houses were low maintenance products and that the Centre for Scientific and Industrial Research (CSIR) and the South African Bureau of Standards (SABS) could inspect constructions at any time.

Mr Bhengu (IFP) asked whether there had been discussion with the Minister. Why was the project not already underway?

Mr Wood answered that Alec Erwin (Department of Trade and Industry) did not approve of the project but had not given sound reason as to why not. He said that he and a delegation of experts were to meet with the National Advisory Council in due course.

Ms Ntwanambi (ANC) asked where the project had been tested with success and how the entire process was initiated.

Mr Wood answered that the Mondragon company in Spain was successful. 129 million jobs had been created in the same way in China. Plans for the project had been with the Department of Trade and Industry since 1994. Regarding initiating the process a pilot had to be developed first. He said that this could be done in conjunction with 314 universities, the CSIR and P.E. Technicon. In the South African context, he said that one development would based in Guateng and another in Port Elizabeth. to test the IT capabilities taking over management, as well as a satellite factory. If this proved to be successful, the developments could be replicated throughout the country.

Ms Botha (DA) pointed out that the problem with presumed successes was that there was no bearing on the actual factories to be built. How were these developments different from prefabricated housing which were cold in winter and hot in summer, as well as more expensive to construct. She asked whether manufacturing was the only aspect to take into consideration and how this would equip people with skills to use in other areas. She raised a concern about comparative profitability and many factors that were not considered in the delivery of Mr Wood's address.

Mr Wood said that the concept had been developed by Ford Motor Company's top management and was not something to be dismissed as unworkable or impractical. He said that the intention was to develop manufacturing-literate communities, which would lead to the honing of other manufacturing skills. South Africa was not product-engineering based, but that the project would encourage this with maximum affordability and sustainability. He added that all schools, communities and businesses that had been presented with the project lent full support for the idea.

Mr Taabe pointed out that if the idea had been devised in the eighties, a pilot project should have been developed by this time. Why was the concept was only brought before the Committee now? He also wanted to know about the outcome of the meeting between the Minister and Mr Wood. What was the involvement of private home-owners and developers outside the sphere of government?

Mr Wood explained that he had approached the RDP offices in 1994 with the idea and had been turned away. Former President Nelson Mandela also refused him an audience. An American company had then offered to sponsor a pilot development in South Africa, but after another refusal by Frank Chikane in 1995, the sponsors had disinvested and left the country after 1998. He said that local business had never been interested in alleviating poverty and had no experience of engaging in projects that would achieve this end.

The Chair asked what would follow the development of the communities.

Mr Wood answered that the factories would be continuously fed with new products to develop.

Mr Kolweni (ANC) said that he was inspired and stimulated by Mr Wood's presentation. He said that the project was sure to succeed as it was labour-driven and asked why it had not been accepted.

Mr Wood said that the Department of Trade and Industry did not seem to realize that this project would do a great deal to alleviate poverty and joblessness in South Africa. He said that an engineered solution was necessary.

Mt Taabe pointed out that the alleviation of poverty and joblessness was central to government policy. Mr Wood's sweeping statements about government's indifference to these did not go down well with him.

Mr Wood said that he had a responsibility to present the facts to the Committee.

Mr Setona added that the issue at hand was very complex and that a number of serious fundamental policy assumptions were being made. He was not convinced that the project would incorporate other related government policies. He said that the Department of Trade and Industry as well as the CSIR should be brought in to express immediate reactions and iron out major policy concerns.

A member of the public requested that she pose a question but was denied the opportunity by Mr Taabe on the grounds that the meeting was not a public hearing.

Mr Wood said that Members focused on policy while he looked at practical solutions. He said that there must be an engineered solution before the policy for it can be formulated. He said that it is assumed that government policy would fit when he two were in fact completely different.

The Chair said that the Committee could not as yet reach a final decision on the matter as other stake-holders had to be brought in.

The meeting was adjourned.