Familiarity with the Market Demand Strategy implemented in Transnet reveals a massive job creation component in the business process– direct and indirect jobs of course. 588 000 direct and indirect jobs were anticipated between 2011 and 2019. Without delving into the details to much, look at a review of the MDS in John Batwell’s article or the Parliamentary Group Meeting in 2015. What I’d like to turn your attention to is new Transnet CEO, Siyabonga Gama’s position on Transnet: shifting toward consumer goods, customer orientation and demand oriented levels of service (through expanding capacity). This is in the face of the Rail Policy Green Paper in South Africa, which proposes that public private partnerships are essential to the development of railways in Africa– toward the end of document. One of the strategic focuses, including shifting rail to road, is incorporating Small Medium Enteprises (SMEs). My argument is that competition between SMEs is good, but for rail sector development pivoting SMEs in a collaborative manner– focusing on regional integration, not just South Africa.
“My argument is that competition between SMEs is good, but for rail sector development pivoting SMEs in a collaborative manner– focusing on regional integration, not just South Africa.”
Collaboration between SMEs in the Southern African region have not been popular. Although institutions and public agencies suggest that good quality engagements are important for regional development, but more practical efforts seem necessary. For instance, much literature is available discussing the advent of a regional currency to ease the flow of business and secure labour mobility throughout the region. The benefits of liberalised transportation services, focused on regional integration (i.e. Yamoussoukro Decision) are obvious throughout the region (InterVistas reported on this in 2014/2015). However, the effect of legislation and political factors are not always positive for regional trade, collaboration and activity (i.e. what’s happening between Zimbabwe and Malawi; inefficient cross boarder inspection processes). For instance, SAA chose Bujumbura over Kenya for a direct freight link 2014 or so–not a good choice for high value goods from Kenya (i.e. Kenya tea which is highly popular in EU).
Circulating regional economic activity is also subject to various rail lines and roadway infrastructure– which is currently at a backlog borderline astronomical. The 1067mm Cape Guage is most frequently used though, making the possibility of goods movement even more valuable. Labour, goods, and ideas circulation within the region are an excellent basis for regional giants to make high quality collaborative footing–amidst all the other challenges that brings.
“In the region, strategies to complement and collaborate on projects with the goal of securing a good brand, and advancing high quality relationships with prudent innovation in mind will certainly set the tone.”
My general thought on the role of SMEs is particularly directed at the transportation, mobility and movement related entities, systems and infrastructure. It does seem reasonable to argue that SMEs that pivot themselves toward emerging business ventures– complementary to larger firms may have strong footing– more-so since black owned business, employment creation and skills transfer are key performance areas for Southern Africa governments and sensible multi-nationals alike. A crucial path to take is one where the evolution of future railway industries redresses two things: firstly the export oriented colonial design of railways in the Southern African region and secondly commercial borders based on nationality.
“Focusing on the up-stream is a serious strategy for success in the SME sector– especially in the process of establishing a competitive railway industry.”
The next generation of African business systems will certainly be one that is on a quest for innovation in high capital cost sectors– not solely consortium dependent small entities, doing a sub-set of the work. Certainly SMEs should start somewhere. In the region, strategies to complement and collaborate on projects with the goal of securing a good brand, and advancing high quality relationships with prudent innovation in mind will certainly set the tone. This is especially true for railway infrastructure supply chains, which include rolling stock componentry, technology, monitoring and evaluation systems with autonomous problem detection, passenger service quality tools, furnishings, lighting and vehicle design. Focusing on the up-stream is a serious strategy for success in the SME sector– especially in the process of establishing a competitive railway industry.