ABSTRACT
12.6. THE IMPACT LOCALITIES
OF BRE PROGRAMMES IN DECLINING
The range of possible outcomes of BRE programmes is considerable. It is by no means limited to the provision of cost reduction measures such as financial incentives, particularly in the case of the locally driven approach. In small towns, the emphasis is more on saving existing jobs and creating new ones. Inthe more prosperous urban centres, such as Pinetown, productivity and profitability assume greater importance.
All BRE programmes are essentially aimed at helping companies overcome problems by linking them to sources of help and creating an environment which enables them to prosper and grow. A range of strategies can be used to achieve this. The strategies outlined below proved to be popular as part of the BRE interventions. Many of the strategies outlined below were detailed by JobsBrain, a BRE resource for the State of Texas. The examples used to illustrate them come from a much wider range of sources.
This list of possibilities is by no means exhaustive as each community and each business has its own unique set of needs and concerns at a given point in time. Nor will they remain constant. A company that needs access to markets today may become one that faces difficulties in expanding tomorrow. There is much more to a provincial BRE strategy than a simple package of incentives and support measures. What is required is a responsive and efficient means of accessing a wide range of support measures and of initiating collective action to overcome problems which are best tackled locally.
Incentives
Following the closure of Mooi River Textiles, the local municipality in the area became instrumental in facilitating access to existing national, provincial Of local incentives Of, in some cases, designing new ones tailored to address specific local needs. These incentives are aimed at attracting all potential investors who want to locate in the area
Government Contract and Export Assistance
Smaller firms worldwide have difficulty accessing markets and would often benefit from a proactive approach. This strategy helps them to secure contracts with government or large firms and to access markets in other regions or countries. This approach was attempted in Howick, as it came as a recommendation from the business survey that was conducted by the University ofNatal.
Promotion ofLocal Purchasing
Opportunities for local sales can easily be lost as buyers are often unaware of what could be purchased locally. Local producers are equally unaware of their needs. InPinetown, this was addressed through newsletters and media reports featuring local producers as well as by local business directories produced by the Chamber of Business. Products were showcased at presentations to company buyers, through trade fairs or even permanent exhibitions.
Local Websites
Though this is an important technological support to local business, none of the studied BRE interventions have created local websites. The business chambers have tried to address business needs by linking their websites to those of their members. Local websites are aimed at external customers. They also have the potential to serve as a business directory, to host online discussions, facilitate email enquiries and diarise or promote eveJ,lts. In some parts of the world firms can even list themselves on a state-wide directory such as the Texas Marketplace website.
Education and Training
Government, through the Department of Labour and the National Social Plan programme, have attempted to offer a wide array of free or subsidised education and training designed to encourage the creation of new jobs, protect existing jobs by introducing new skills, facilitate the employment of disadvantaged work-seekers and encourage investment in new technology or products. The National Social Plan facilitates links between business and education and training institutions in KZN in order to improve the availability of particular courses or to align training and education more closely to local needs.
Information on Business Assistance
An easily accessible database of the wide range of public and private sector resources available to assist business was an essential part of the BRE programme in Pinetown and has been kept up to date on an ongoing basis.
Site Development
Expansion opportunities and sometimes-entire plants were lost through lack of available sites.
In some cases BRE programmes have become active in site development. Often it is sufficient to merely maintain a database of potential sites. For instance, the Smith Manufacturing expansion in Pinetown would not have been possible, if the former Inner West Municipality was unable to assist in this regard. After the adjacent site had been identified, the municipality made sure that this was ready for further development.
Regulations and Permits
Difficulties with the regulatory environment are by no means unique to the case studies. The interview with the managing director of Smith Manufacturing in Pinetown suggests that the company nearly abandoned plans to expand and were contemplating relocating because of cumbersome procedures and difficulty in the interpretation of regulations and by-laws.
Through the BRE programme, the local municipality was able to change local town planning policies or regulations by streamlining procedures and providing resources to make e<;>mpliance simpler, quicker and less time consuming. Thus, the company was able to apply for all the necessary local government permits, and also make sure that necessary information reachedallthe relevant agencies.
Business Environment
In many communities there are issues and difficulties which affect business in general.
Examples include infrastructure, reliability of power supplies or telecommunications, or the regulatory environment. For instance, of the 60 interviews conducted with local businesses located in the Pinetown area, about 80% of all those that were planning business expansions complained about the process of Environmental Impact Assessment which companies need to conduct before any expansions can be undertaken. A BRE programme allows business to articulate these concerns clearly and put them firmly on the local agenda
Improving Industrial Relations
Itis certainly not in the interest of trade unions to see expansions deferred, plants shut down or workers replaced by machines, yet many business decisions are strongly influenced by what is seen as union hostility. Very often this is the result of poor industrial relations practice resulting from a lack of skill on the part of management and/or employee representatives.
BRE programmes often have a component to improve the IR climate in a community, sector or individual business.
Quality ofLife
The influence that quality of life considerations have on investment decisions is well known.
They are equally applicable to expansion or disinvestment decisions. What appears to be growth or new industry in one community may be no morethan migration from another - a situation all too familiar in KZN. Collective action to improve the quality of life and to headhunt specific services or facilities plays an important part in a local BRE strategy.