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[object Object],[object Object],Towards A Vision for the Building Industry   Aligning the Vision with the NPC            Dr. Llewellyn B. Lewis, Principal Consultant July 2011   ,[object Object],[object Object],[object Object],THE STRATEGIC FORUM www.strategicforum.co.za
[object Object],GFCF R521,6 BILLION (22% OF GDP) BUILDING INV. R108,5* BILLION (20,8% OF GFCF) CONSTR. INV. R174,9 BILLION (33,5% OF GDFI) GDP R2663 BILLION GOVERNMENT BUDGET R798,9 BILLION (30% OF GDP) TRANSFER DUTY R8- R9 BILLION PA FTHB SUBSIDIES (1,9% OF BUDGET = R13,8 BILLION) (500 000 HOUSING UNITS) INVESTMENT IN AFFORDABLE HOUSING (R1,4 TRILLION 2010-2020) RESIDENTIAL AND  NON RES BPP AND  BUILDINGS COMPLETED (BC) PRIMARY AND SECONDARY PROPERTY MARKET R267 BILLION PA MORTGAGE ADVANCES PA R1000 BIO MORTGAGES O/S LISTED PROPERTY SECTOR  MARKET CAPITALISATION > R100 BILLION ANNUAL HOUSING NEED  (POP. GROWTH ONLY) 250 000 INTEGRATED HOUSING EMPLOYMENT IN BUILDING & CONSTRUCTION > 1 000 000 PEOPLE * When the UNRECORDED Home Improvement  and Affordable Housing is taken into account Building Investment = 30,5% of GFCF PROPERTY OWNERSHIP ENGINE FOR GROWTH  AND WEALTH CREATION R3,8 TRILLION RES PROPERTY R1,3 TRILLION NON RES PROPERTY URBAN HOUSING BACKLOG > 1,5 MILLION UNITS IN 2010 GOVERNMENT  INFRASTRUCTURE SPEND  (R846 BILLION 2010-2020) It is estimated that  for every R1 spent on infrastructure, R1.40 is added to a country’s gross domestic product.  PPP’s are the ideal vehicle for funding the gaps in infrastructure in Africa. (Deloittes research, May 2011)
[object Object],[object Object],RESIDENTIAL INVESTMENT R59 682 MILLION CURRENT REALITY OF BUILDING & CONSTRUCTION: 2010* BUILDING & CONSTRUCTION INVESTMENT R334 221  MILLION   BUILDING INVESTMENT R159 277 MILLION CONSTRUCTION INVESTMENT R174 944 MILL CONTRACTOR (50,8%) R67 914 MIO SUBCONTRACTOR (49,2%) R65 775 MIO LABOUR (40%) R133 688 MIO DIRECT TO USER (40%) R80 213 MILLION MATERIAL (60%) R200 533 MIO INDIRECT VIA DISTRIBUTION  (60%) R120 320 MILLION LARGE IND BUILDERS MERCHANT  (10%) R20 053 MILLION LARGE CHAIN BLDRS MERCHANT (25%) R50 133 MILLION HYPERMARKET/SUPERMARKET (5%) R10 027 MILLION SPECIALIST SHOP (5%) R10 027 MILLION LOCAL HARDWARE STORE (15%) R30 080 MILLION RESIDENTIAL INVESTMENT R12 775 MILLION NON RESIDENTIAL INVESTMENT R64 488 MILLION UNRECORDED ADDITIONS AND ALT’S INVEST** R35 106 MILLION * 2010 Prices ** Residential and Non Residential
[object Object]
[object Object],[object Object],RESIDENTIAL INVESTMENT R62 856 MILLION CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011* CURRENT REALITY: BUILDING AND CONSTR 2011 www.strategicforum.co.za   * ESTIMATED 2010 BUILDING & CONSTRUCTION INVESTMENT R310 870  MILLION   BUILDING INVESTMENT R157 049 MILLION CONSTRUCTION INVESTMENT R153 821 MILL CONTRACTOR (50,8%) R63 159 MIO SUBCONTRACTOR (49,2%) R61 169 MIO LABOUR (40%) R124 328 MIO DIRECT TO USER (40%) R74 609 MILLION MATERIAL (60%) R186 522 MIO INDIRECT VIA DISTRIBUTION  (60%) R111 913 MILLION LARGE IND BUILDERS MERCHANT  (10%) R18 652 MILLION LARGE CHAIN BLDRS MERCHANT (25%) R46 631 MILLION HYPERMARKET/SUPERMARKET (5%) R9 326 MILLION SPECIALIST SHOP (5%) R9 326 MILLION LOCAL HARDWARE STORE (15%) R27 978 MILLION RESIDENTIAL INVESTMENT R12 775 MILLION NON RESIDENTIAL INVESTMENT R58 866 MILLION UNRECORDED ADDITIONS AND ALT’S INVEST** R35 326 MILLION * 2010 Prices ** Residential and Non Residential
[object Object],[object Object],RESIDENTIAL INVESTMENT R60 744 MILLION CURRENT REALITY OF BUILDING & CONSTRUCTION: 2011* CURRENT REALITY: BUILDING AND CONSTR 2011* EST Q1 2011 www.strategicforum.co.za   * ESTIMATED Q1 2011 BUILDING & CONSTRUCTION INVESTMENT R339 721  MILLION   BUILDING INVESTMENT R162 748 MILLION CONSTRUCTION INVESTMENT R176 973 MILL CONTRACTOR (50,8%) R69 031 MIO SUBCONTRACTOR (49,2%) R66 857 MIO LABOUR (40%) R135 888 MIO DIRECT TO USER (40%) R74 609 MILLION MATERIAL (60%) R203 833 MIO INDIRECT VIA DISTRIBUTION  (60%) R122 300 MILLION LARGE IND BUILDERS MERCHANT  (10%) R20 383 MILLION LARGE CHAIN BLDRS MERCHANT (25%) R50 958 MILLION HYPERMARKET/SUPERMARKET (5%) R10 192 MILLION SPECIALIST SHOP (5%) R10 192 MILLION LOCAL HARDWARE STORE (15%) R30 575 MILLION RESIDENTIAL INVESTMENT R12 775 MILLION NON RESIDENTIAL INVESTMENT R65 006 MILLION UNRECORDED ADDITIONS AND ALT’S INVEST** R36 998 MILLION * 2010 Prices ** Residential and Non Residential
[object Object]
[object Object],[object Object],Confidence LOW Risk Avoidance Confidence  HIGH Risk Taking Property a  PREFERRED  Investment High Road Low Road Lower Middle Road Upper Middle  Road 10% 40% 20% 30% Property a  POOR  Investment
[object Object],[object Object],R305 Billion decline in only 3 years! It could take a decade to get back to the 2006 level!
[object Object],[object Object]
[object Object],[object Object],The difference between “high road” and “lower middle road” could be R350 Billion and  700 000 jobs over the 10 years to 2020.
[object Object],[object Object],SCENARIOS FOR CONSTRUCTION: 2011-2020 www.strategicforum.co.za
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],“  This is the ideal time to borrow and invest heavily in public infrastructure  that has been badly neglected over the past 30 years . . . Not only to roads and bridges but also to airports and air traffic control systems, urban transit, high-speed rail, schools and university facilities, national laboratories, national parks, smart electric grids, broadband networks, green generating plants and health information networks. This forward looking approach is  best defined not as deficit spending fuelling consumption  but as an  investment for the future  with fiscal consolidation achieved in a way that supports jobs and growth” (Gordon Brown: 148: 2010)
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],“ Over the next three years government will spend  R846 billion on public infrastructure. On transport, we will maintain and expand our road network. We will ensure that our rail network is reliable, competitive and better integrated with our sea ports. ” (President Jacob Zuma: State of the Nation Address: 2010) “ Economic Development Minister Ebrahim Patel put the total annual expenditure on infrastructure over the next four years at  R250bn a year, translating into R1-trillion for the period  — an 18% increase on the state’s previous infrastructure spending estimate of about R846bn for the three years to 2013. ” (Business Day: 16 February 2011)
STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za   Productive capacity Alliances, Joint Ventures Cross functional Networking Enterprise Development, BEE Skills Training and Development Leadership, Lobbying, Advocacy Modeling cooperative behaviour REINVENTION The Hot Spot Scenario: mapping emergence (Based on Gratton: 2007: 145) Building: The Engine for Growth and Wealth Creation.  Property a preferred investment Management Training and Development INDUSTRY Government  Labour The  more peers we can bring online for the business of saving the world,  the easier the effort will be, and in a sense, the stronger we will each be. (Ramo: 2009: 240)  Research has indicated that we can create jobs in six priority areas. These are  infrastructure development,  agriculture, mining and beneficiation, manufacturing, the  green economy  and tourism. We cannot create these jobs alone.  We have to work with business, labour and the community constituencies.  (Pres Jacob Zuma: SONA: 2011)
What - the picture of the future we wish to create (Abstract) (Looking out the window) Why - the organisation’s answer to the question  “ Why do we exist”   Purpose transcends the needs of shareholders and employees. It seeks to contribute to the world in some unique way, to add a distinctive source of value.  (Concrete) (Looking in the Mirror) How - do we want to act, consistent with our mission along the path towards achieving our vision ? (includes openness, honesty, equal opportunity, merit, loyalty)  Describes how the company wants life to be on a day-to-day basis while pursuing the vision.  (Senge: 1990) Values = Vision = Mission = or  purpose or Context VSION, MISSION, PURPOSE www.strategicforum.co.za
[object Object],DEVELOPING A NATIONAL VISION www.npconline.co.za   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],DEVELOPING A NATIONAL VISION www.npconline.co.za   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Malema may be the voice of reason rather than rhetoric. A GROUP of erudite intellectuals and a rabble-rousing politician with  coruscating*  political ambition may, on the face of it, make strange bedfellows, but there is a  great deal in common  between the diagnostic reports delivered by  Trevor Manuel’s  National Planning Commission and  Julius Malema’s  closing speech at the recent African National Congress (ANC) Youth League conference. Stripped bare — the reports of their academic elegance and the speech of its bombast — both home in on the fact that  race-based inequality threatens to push the economy and, indeed, the entire society over the precipice.   Manuel and Malema are giving us the same message.  (Caroline Southey, former editor of the Financial Mail, 28 June 2011)  * coruscate (korra skayt) to show brilliance or virtuosity
[object Object],DEVELOPING A NATIONAL VISION www.npconline.co.za   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],DEVELOPING A NATIONAL VISION www.npconline.co.za   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The Vision must be a dream and must be made much more compelling than what the NPC is trying to do in its 10 point plan (perhaps it is rather a mission?). Why not something like  “together we increase sustainable welfare and quality of life of people”  ?   (Prof Stef Coetzee, Sakebeeld, 22 June 2011) This is a well considered document that deserves the attention of all thinking South Africans. We need the  political will  to implement this and the plan which follows later in the year. (Prof Stef Coetzee, Sakebeeld, 22 June 2011) 
[object Object],DEVELOPING A NATIONAL VISION (A PROPOSAL) www.npconline.co.za   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],VISION MISSSION
[object Object],DEVELOPING A NATIONAL VISION www.npconline.co.za   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],VALUES SLOGAN A democratic state, rooted in the values of the constitution
[object Object],DEVELOPING A NATIONAL VISION www.npconline.co.za   The NPC plays a role mobilising society around a  vision and a development plan.  It does this through active engagement with the public, ensuring that experts’ views are canvassed on its proposals, and through a wide range of interactions. The commission has to carry out its functions  representing all South Africans,  taking into account their views irrespective of political outlook.  The NPC  invites all South Africans  to participate in this process to define a shared vision for our collective future.  The Building Industry leadership needs to engage with the NPC in order to contribute to the development of the  National Vision for the Country and for the Building Industry.
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],? Asking the right questions. Turning  known unknowns  into  known knowns . First step towards developing a  Vision  for the Industry? Towards developing a  Co-operative mindset and cross boundary networking  for the Industry? STRATEGIC RESPONSE www.strategicforum.co.za
[object Object],NATIONAL ISSUES GROWTH WEALTH EMPLOYMENT PROPERTY ORGANISATION’S ROLE INVESTMENT ENVIRONMENT MARKETING LOGISTICS MANUFACTURING SLOGAN Building: An engine of growth & wealth creation REINVENTION Doing well while doing good. YESTERDAY’S ECONOMY TOMORROW’S ECONOMY NARROW FOCUS ON COMPANY BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES Overarching vision aligned with National Issues and Vision, adapted and customised by Industry and organisations for their own  vision and values.  BORROW BUY  BURN ENVIRONMENTAL SUSTAINABILITY SOCIAL SUSTAINABILITY ECONOMIC SUSTAINABILITY STRATEGIC RESPONSE www.strategicforum.co.za   VISION The Building Industry is an engine for growth and wealth creation through redistribution, property development, ownership and investment. MISSION The elimination of social backlogs and inequities  is achieved through the provision of sustainable integrated developments, and providing skills, employment and entrepreneurial opportunities for growth. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],Towards Building: An Engine for growth and wealth creation in A democratic state, rooted in the values of the Constitution, working with all sectors of society to improve the quality of life, build a better Africa and a better World. Dr. Llewellyn B. Lewis July 2011   ,[object Object],[object Object],[object Object],THE STRATEGIC FORUM www.strategicforum.co.za

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A vision for the building industry in the context of the npc (july 2011)

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  • 16. STRATEGIC DRIFT AND REINVENTION www.strategicforum.co.za Productive capacity Alliances, Joint Ventures Cross functional Networking Enterprise Development, BEE Skills Training and Development Leadership, Lobbying, Advocacy Modeling cooperative behaviour REINVENTION The Hot Spot Scenario: mapping emergence (Based on Gratton: 2007: 145) Building: The Engine for Growth and Wealth Creation. Property a preferred investment Management Training and Development INDUSTRY Government Labour The more peers we can bring online for the business of saving the world, the easier the effort will be, and in a sense, the stronger we will each be. (Ramo: 2009: 240) Research has indicated that we can create jobs in six priority areas. These are infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism. We cannot create these jobs alone. We have to work with business, labour and the community constituencies. (Pres Jacob Zuma: SONA: 2011)
  • 17. What - the picture of the future we wish to create (Abstract) (Looking out the window) Why - the organisation’s answer to the question “ Why do we exist” Purpose transcends the needs of shareholders and employees. It seeks to contribute to the world in some unique way, to add a distinctive source of value. (Concrete) (Looking in the Mirror) How - do we want to act, consistent with our mission along the path towards achieving our vision ? (includes openness, honesty, equal opportunity, merit, loyalty) Describes how the company wants life to be on a day-to-day basis while pursuing the vision. (Senge: 1990) Values = Vision = Mission = or purpose or Context VSION, MISSION, PURPOSE www.strategicforum.co.za
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