Thinking local will help grow Nelson Mandela Bay economy and create jobs

Globalisation of economies and manufacturing supply chains is a reality which is here to stay, but as much as we seek to be a globally-connected economy we have to ensure that Nelson Mandela Bay remains a site of local manufacturing by multinational players as that is the anchor which creates much-needed local jobs.

The erosion of local manufacturing in various sectors over the past year alone — through downscaling or shutting down sections of operations, as well as outright closures of entire plants — is a grave concern.

Every direct job lost in a manufacturing operation potentially costs at least four jobs in the supporting supply chain, and in turn represents 10 people who have lost the support of a bread-winner.

There is no single reason for any of these, but rather a combination of decisions made at a global head office as to the most amenable and competitive manufacturing locations, considerations of productivity and economies of scale, efficiencies and connectivity to global logistics hubs, and taking into account the local business enabling environment, or lack thereof.

At the same time as we need the various stakeholders to take action to improve the conditions to support local manufacturing, such as reliable delivery of basic services and the ease of doing business, there is another powerful way to strengthen the local economy and protect local jobs, and that is to “think local first” when making purchasing decisions.

This call applies as much to us as individual consumers as it does to businesses and government when sourcing vehicles, equipment and supplies.

Given that the Bay economy is anchored by vehicle manufacturing, a prime consideration is the depth of the business ecosystem surrounding these manufacturers, which creates thousands of additional local jobs in the supply chain of raw materials, component manufacturers and logistics, as well as the suppliers of goods and services to these operations.

That generates an enormous amount of purchasing power to be spent with local retailers and diverse businesses from tourism, hospitality and entertainment through to home maintenance, personal services, healthcare, and paying school fees.

The manufacturing sector in the Bay is the largest contributor to municipal rates and services income, as well as substantial corporate social investment which supports education, community development, youth skills development, and the welfare of society’s most vulnerable.

The local presence of multinational manufacturers also supports increased localisation and in turn opportunities to employ more people in the supply chain.

That said, thinking local first is not only about big-ticket purchases like a new vehicle or set of tyres.

It extends to thinking about buying fresh, seasonal produce grown in Loerie or the Sundays River Valley, locally-reared chicken, or fresh fish in the harbour, rather than imported vegetables, fruit and meat.

It’s about considering where clothing or shoes were manufactured, supporting local artisans and craftspeople, or sourcing office supplies or IT services from a local business.

Sourcing from local suppliers also gives the advantage of more readily available customer support, reducing downtime, saving costs and the benefit of building local, trusted relationships.

Buying local reduces transport costs and also contributes to environmental sustainability, reducing your carbon footprint by cutting down on the fuel and emissions of global shipping and airfreight.

Consider also that some proudly SA products are sought-after the world over — mohair and wool from the Eastern Cape, wine from the Western Cape, oranges and lemons from the Sundays River Valley, squid from the fishers of St Francis Bay.

Alongside this, our automotive assemblers have proven they have the capabilities and expertise to assemble vehicles which meet world-class standards.

On the other side of the coin, there is no arguing with the fact that businesses based in the Bay, which sell imported goods, do also add value to the local economy in terms of property investment, contributing rates and taxes, employing people and developing their skills and careers.

Some also contribute to local social and welfare challenges through CSI initiatives.

However, this does not create the depth and breadth of direct and indirect jobs and overall support for the local economy, which local manufacturing provides.

Consider for example all the thousands of businesses and jobs which are directly and indirectly linked to having an automotive industry in the Bay. 

There is good reason for many imported goods — things that can’t be competitively produced locally, and offering consumers more choice and more price points — but we need to think about the long-term consequences of purchasing these products.

We are saying “think local first”, because by buying an SA made or grown product, you are not just buying a car, a new suit or bag of vegetables, you are supporting local employment, education, skills development, and the welfare of local communities.

What’s more, local manufacturing brings technology and innovation to a country, which keeps it at the forefront of new developments.

Our purchasing decisions have the power to grow a resilient and sustainable local economy, which in turn drives opportunities for employment creation and crucial support for communities.

Think about it.

Denise van Huyssteen is CEO of the Nelson Mandela Bay Business Chamber.

The Herald