Future Cape for CEOs Forum 22 Feb 2012
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Future Cape for CEOs Forum 22 Feb 2012

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These slides were first presented at the Economic Development Partnership CEOs Forum (22 Feb 2012).

These slides were first presented at the Economic Development Partnership CEOs Forum (22 Feb 2012).

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  • Singapore (National Geographic).
  • Source:
  • Futures of Technology in Africa Edited by Jasper Grosskurth, 2010 (ISBN 978 90 809613 7 1)
  • 02/23/12 Perez CISCO-PSS Stockholm 2008 Industrial transitions – 250 years (C. Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, 2002 )
  • Industrial transitions – 250 years (C. Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, 2002 )
  • Industrial transitions – 250 years (C. Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, 2002 )
  • South Africa's greenhouse gas emissions per capita are similar to that of industrialised countries 11 tonnes a person a year; this is partly because of SA's strong reliance on coal. To be carbon neutral by 2050, emissions in South Africa need to be one tonne per person per annum. Long-term mitigation scenario projections suggest that this trend may continue for the next few decades if there are no massive interventions. While the trend in respect of emissions per capita shows an increase, it is however worth mentioning that emissions per unit of economic output (GDP) are declining. Commitment: South Africa reiterates that it will take nationally appropriate mitigation action to enable a 34% deviation below the ‘ Business As Usual’ emissions growth trajectory by 2020 and a 42% deviation below the ‘ Business As Usual’ emissions growth trajectory by 2025. In accordance with Article 4.7 of the Convention, the extent to which this action will be implemented depends on the provision of financial resources, the transfer of technology and capacity building support by developed countries. HDI: Between 1990 to 2010 South Africa ’s score stagnated, with a change of only -0,5%. Source: http://www.solidaritysa.co.za/Home/wmview.php?ArtID=2755 (13 March 2011) Brazil: 0699 South Africa: 0.601 in 1990 China: 0.663 Chile: 0.731

Future Cape for CEOs Forum 22 Feb 2012 Future Cape for CEOs Forum 22 Feb 2012 Presentation Transcript

  • Think Piece for Discussion 22 February 2012
  • What Future Cape is not…
    • An economic strategy
    • Or even an economic agenda towards a strategy
    • Instead, it is an informed provocation about how the world is changing with an eye on 2040.
    • It acknowledges that economic intelligence about sectors, clusters, value chains and investment patterns and potential is vital.
    • But, doing all this well will still not enable us to achieve resillient and inclusive growth…
  • Storyline
    • Rising above the now: The point about understanding the future is to equip us to act more effectively in the present
    • The changing world and our futures
    • Flashing dashboard: Pressing development challenges
    • Homebru Conceptual Framework
    • Proposed Priority Interventions
    • Having the conversation towards common purpose…
  • TOPVIEW: RISING ABOVE THE PRESENT
    • If we don ’t escape the present into the future, we cannot solve the problems of today; if we don’t act now, we cannot achieve the future we need in order to flourish…
  • The Changing World
    • Mega shifts
    • Irrevocable geo-economic shifts by 2030
    • Socio-Digital media shift (cellphone and internet impact on consumption)
    • Permanently resource constrained world: implications for prices and patterns of inclusion and exclusion
    • An era of systematic risk and uncertainty due to climate change impacts
  • Geo-economic shifts
  • v
  • Relative shares of global economic output, 1500-2000
  • Economic Growth Trends for Major Economic Powers (2000-2100) The US and EU continue as major powers till the 2030s, after which China will typically lead for up to 50 years, while India comes up from behind India, China & Japan had the largest urban populations in the world till the early 19 th century China-EU China-US India-EU India-US India-China
  • In 2009, China & India accounted for less that 2% of Western Cape trade!
  • Socio-digital shift 51,000% increase since 1995
  •  
  • Global material extraction in billion tons, 1900-2005
    • “ Oil is back above $90 a barrel. Copper and cotton have hit record highs. Wheat and corn prices are way up. Over all, world commodity prices have risen by a quarter in the past six months. So what ’ s the meaning of this surge? Is it speculation run amok? Is it the result of excessive money creation, a harbinger of runaway inflation just around the corner? No and no. What the commodity markets are telling us is that we ’ re living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. So what are the implications of the recent rise in commodity prices? It is, as I said, a sign that we ’ re living in a finite world, one in which resource constraints are becoming increasingly binding. ”
    • - Paul Krugman, International Herald Tribune , 28 December 2010.
  • Climate change impacts Source: Left: IPCC Synthesis Report, 2001; Right: Smith et al 2009 PNAS
  • Economic implications of adaptation
  • EACH TECHNOLOGICAL REVOLUTION PROPAGATES IN TWO DIFFERENT PERIODS State intervention DEPLOYMENT INSTALLATION Financial crisis “ Creative destruction ” Learning the new unlearning the old A great market experiment Led by financial capital Ending in a stock market crash INSTALLATION DEPLOYMENT “ Creative construction ” Led by production capital Applying the paradigm to innovate across all sectors and to spread the social benefits more widely Until maturity and exhaustion ??? 2O - 30 years 2O - 30 years Major technology bubble big-bang Next big-bang Time Degree of diffusion of the new technological potential The first half sets up the infrastructure and lets the markets pick the winners the second half reaps the full economic and social potential Turning Point Uncertainty, institutional recomposition and role shift
  • GREAT SURGE Technological Revolution CORE COUNTRY INSTALLATION DEPLOYMENT IRRUPTION FRENZY SYNERGY MATURITY B ig-bang crash I nstitutional recuperation T urning point S USTAINABLE SYSTEM? (Adapted from C. PEREZ 2002) The Industrial Revolution Britain 1771 1793-97 C anal mania (Britain) Great British leap 1 st Age of Steam & Railways B ritain (spreading to EU & US) 1829 1848-50 Railway mania (Britain) The Victorian boom (Britain) 2 nd Steel, Electricity & heavy engineering US & Germany overtake Britain 1875 1893-95 Transcontinental investments in railways, ships & ports Belle Epoque (Europe) “ Progessive era ” (USA) 3 rd Oil, automobile & mass production US (spreading to EU) 1908 1929-33 (EU) 1929-43 (US) Autos, electricity, radio, aviation and real estate (USA ) Post-war golden age (USA-Europe) 4 th Information & telecommunications US (Spreading to EU & Asia) 1971 2001-02 2008-09 Telecoms & internet mania & financial instruments (Global ) GREEN NEW DEAL??? 5 th
  • GREAT SURGE Technological Revolution CORE COUNTRY INSTALLATION DEPLOYMENT IRRUPTION FRENZY SYNERGY MATURITY The Industrial Revolution Britain 1771 1793-97 C anal mania (Britain) Great British leap 1 st Age of Steam & Railways B ritain (spreading to EU & US) 1829 1848-50 Railway mania (Britain) The Victorian boom (Britain) 2 nd Steel, Electricity & heavy engineering US & Germany overtake Britain 1875 1893-95 Transcontinental investments in railways, ships & ports Belle Epoque (Europe) “ Progessive era ” (USA) 3 rd Oil, automobile & mass production US (spreading to EU) 1908 1929-33 (EU) 1929-43 (US) Autos, electricity, radio, aviation and real estate (USA ) Post-war golden age (USA-Europe) 4 th Information & telecommunications US (Spreading to EU & Asia) 1971 2001-02 2008-09 Telecoms & internet mania & financial instruments (Global ) B USINESS AS USUAL + GREENWASH 5 th crash T urning point SUSTAINABILITY AGE 2005 2025 Renewables, decoupling, demateralisation, sustainable living (Global) S USTAINABLE LIVING & GLOBAL EQUITY 6 th A GRICULTURE S USTAINABLE SYSTEM
  • HOW READY IS THE WESTERN CAPE TO JOIN THE ECO-INDUSTRIAL AGE?
  • Can the Western Cape Engage & Address its Unique Development Challenges?
  • The Changing World
    • Mega shifts
    • Geo-economic shifts
    • Digital media socio-cultural shift (cellphone and internet impact on consumption)
    • Permanently resource constrained world: implications for prices and patterns of inclusion and exclusion
    • An era of systematic risk and uncertainty due to climate change
    • Meta Implications
    • Rise of regions and city-blocs as the nodal point of the global economy
    • Transition to an eco-industrial era (adaptive technologies to achieve eco-efficiency)
    • Distributed settlement and production logics ( “local is lekker; slow in nice”)
    • Place-based innovation systems
  • FLASHING DASHBOARD
  • Flashing Dashboard
    • Structural unemployment, with no sign of abatement (skills mismatch)
    • Catastrophic impact of carbon pricing on the exports of the Western Cape
    • Endemic social violence and crime that undermines social cohesion, economic productivity and visitor economy
    • Low quality, dangerous and disconnected neighbourhoods where the majority of citizens are trapped in poverty (food insecurity)
    • Infrastructure crunch and cost
  • Unemployment
  • Overview of the Western Cape labour market, 2011 “ Around half a million individuals in the Western Cape were unemployed in 2011Q1, up from just under 400 000 in 2008, representing growth of 9.1 per cent per annum over the three-year period. Provincial employment appears to have been stagnant over the period at around 1.8 million. ”
  • Impact of carbon tax
    • Any carbon pricing will affect South Africa and WC disproportionately. A ZAR100 carbon tax (either in SA or at EU border) would add R0.22 to the cost of a kilogram of fruit from Theewaterkloof on average (more for grapes, less for citrus). The same tax adds ZAR 0.06 – ZAR 0.09 to a kilogram of fruit grown in Chile (a major competitor). Edible fruits and nuts is the Province ’ s biggest export earner (ZAR 10.6 billion in 2009) which is 20% of all exports. But will lose competitiveness in a carbon constrained world (as will most sectors). Second biggest exporter is mineral fuels, oils and distillation (I assume from our refineries). 3rd biggest export is “ spirits, beverages, vinegar ” .....which is agricultural.
    • Average per capita CO2 emissions nationally have actually been stable (come down from 9.2) around this very high level over the past 15 years. A function of modest economic growth, some population growth and some efficiency gains. Inequality in emissions is a key WCape story.
    Carbon Productivity Per capita Production Carbon Footprint [USD GDP / tonne CO 2 e] [tonnes CO 2 e / capita] City of Cape Town 670 7.8 Western Cape 770 6.1 South Africa 400 8.9 Required by 2050 (McKinsey) for stablisation at 450ppm 7,300 1.0??
  •  
  • Endemic violence Symptomatic of a wide-ranging number of social pathologies that cluster around substance abuse, sexual violence, dysfunctional parenting, splintered households (absent fathers), etc…
  • Unliveable neighbourhoods “ High-income households live in low densities while low-income households live in high densities.” (CCT 2010)
  • Spatial dynamics of isolation and exclusion Spatial traps of educational, health, economic & social dysfunction, reinforced by mobility barriers. Encrusted by cultural norms.
  • Trapped in an unviable fiscal model
  • Trapped in an unviable fiscal model: maintaining standards in wealthy areas
  • Recap: Flashing Dashboard
    • Structural unemployment, with no sign of abatement (skills mismatch)
    • Catastrophic impact of carbon pricing on the exports of the Western Cape
    • Endemic social violence and crime that undermines social cohesion, economic productivity and visitor economy
    • Low quality, dangerous and disconnected neighbourhoods where the majority of citizens are trapped in poverty (food insecurity)
    • Infrastructure crunch and cost
  • CONCEPTUAL FRAMES
  • The development challenge… GDP: 7% for 5m jobs CO 2 : 42% deviation below BAU by 2025 HDI: 0.597  0.80 Resilient growth Inclusive growth
  •  
  • Network infrastructure life-spans
  •  
  • Network infrastructure priorities
    • Water & waste: enhance re-use and recycle with a low-skill employment focus built into the service delivery model of all municipalities
    • Transport-oriented settlement planning and land-use regulation, based on maximising new revenue streams
    • New building standards for both top-structures and subterranean infrastructures, phased in gradually to achieve carbon per capita targets
    • Reinforce a green economy regional innovation system to facilitate a cost-effective transition to the new resource standards
  • Spatial & land-use operating system ( equitable & inclusive ) Economic operating system (Inclusion & durability) Social-cultural operating system (liveable communities) Network infrastructure operating systems ( resilient settlements )
  • Priority interventions
    • Transition from Dirty to Clean Economy through a focus on sustainable infrastructure as a catalyst for the Cape Green Economy
    • Guarantee excellent public transport
    • Energy security
    • Liveable human settlements
    • Institutionalised growth management (inter-governmental, multi-sectoral and inter-sectoral alignment)
    • Social transformation through building liveable communities
  • Sustainable infrastructure
    • Generally speaking sustainable urban infrastructure includes:
    • Public transport networks;
    • Distributed renewable generation and integrated energy demand management initiatives and programs;
    • High efficiency buildings and other development constraints such as only permitting the construction of green buildings and sustainable habitats with energy-efficient landscaping;
    • Connected green spaces and wildlife corridors;
    • Low impact development practices to protect water resources.
  • Energy security
    • Energy efficiency : The most effective renewable energy initiatives in the Western Cape should be implemented in tandem with energy efficiency measures that reduce the quantum of energy required by the province.
    • Public procurement : Public procurement of clean energy; the retrofitting of government buildings; the charging of differential levies for peak and off-peak electricity and the building of more energy efficient low cost housing represent important public initiatives aimed at supporting the emergence of a local, renewable energy sector.
    • Intra-governmental engagement : An engagement with different spheres of government aimed at securing power purchase agreements.
  • Housing access
    • “ The housing or shelter challenge must be rethought in order to address the imperative of affordable, well-located and healthy living conditions . Practically, this means that building more of the current RDP housing matchboxes must stop. Instead, public housing must be broadened and reprioritised to secure a rebalanced allocation for upgrading, low-income rental stock, gap housing (rental stock for lower middle-class) and private-sector driven integrative efforts… ”
  • Rebuilding place & community: Economic Inclusion
  • Rebuilding place & community: Integrated community development via Community Works Programmes
    • The Future regional competitiveness will hinge on our capacity to innovate in order to simultaneously address spatial and social inequalities in an environmentally resilient way…
  • Key questions
    • Does the story line make sense in the context of the Cape?
    • What would the implications be for your sector if we focus all our attention on learning how to become an eco-efficient province/region by 2040?
    • Is there a business model/social-organisation model in becoming an eco-efficient province?
    • Is there scope to foster a shared social purpose in deepening and systematically addressing the intervention agenda?
    • How best can we embed this agenda in the minds and plans of all sectors and institutions of society?
  • Acknowledgements
    • Cape Higher Education Consortium (CHEC)
    • African Centre for Cities at UCT
    • Sustainability Institute linked to University of Stellenbosch
    • Commissioned by the Western Cape Provincial Government
    • Steered by the Economic Development Partnership