Economic transformation: China, SA should co-operate

“Downside risks and vulnerabilities have risen, against the backdrop of volatile capital flows, a large drop of commodity prices, escalated geopolitical tensions,” reads the communiqué of the Group of 20 (G20) finance ministers and central bank governors meeting in Shanghai, underlining the daunting challenges facing the world economy.

Indeed, the global economy is undergoing hard times. No country can stay unscathed when economies are increasingly intertwined in the era of globalisation.

According to recent data from Statistics SA, the growth rate of South African gross domestic product (GDP) fell to 0.6 percent in the fourth quarter of 2015 and overall growth fell from 1.5 percent to 1.3 percent. This year the growth is expected to further drop to less than 1 percent due to various unfavourable factors.

Despite such circumstances, we still have some good news – the economic ties between China and South Africa have been strengthened rather than undermined against headwinds.

More and more Chinese enterprises are seeking opportunities in South Africa. There are about 140 medium and large size Chinese companies in South Africa now, having invested more than $13 billion (R199bn) and created a total of 30 000 jobs.

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Even in the past two years, Chinese direct investment to South Africa has kept on expanding. The assembly plant of China First Automotive Works (FAW) in Coega Industrial Park, the home appliance factory of Hisense Group, and the cement production line invested by Hebei Jidong Development Group, among others, have offered much-needed jobs for local people.

Meanwhile, most of the Chinese enterprises actively shoulder corporate social responsibility by providing training to local unskilled workers and donating to charities and green groups.

The two governments have also strengthened co-operation on human resource development. Last year China gave training to more than 400 artisans, technicians and managers for South Africa.

What’s more exciting is that Chinese President Xi Jinping’s state visit to South Africa in December has added more impetus to bilateral economic co-operation.

More than 20 agreements worth billions of dollars were signed at the Union Buildings, including a dozen co-operation agreements achieved by enterprises from both countries in the areas of finance, energy, automobiles, infrastructure and so on.

Although it is obvious China-South Africa economic co-operation enjoys a bright future, the speculations and doubts never stop emerging. For example, recently I often hear the rhetoric of “collapsing Chinese economy”, which misinterprets the Chinese economy’s real situation.

Undoubtedly, China’s growth is slower when compared with the past. However, against the world economic difficulties, it is by no means a small achievement to realise a growth rate of 6.9 percent on the basis of more than $10 trillion GDP, especially given the world’s average growth of only slightly more than 3 percent.

Growth driver

For decades, China has been one of the strongest engines of world economic development. In 2015 China added more than 25 percent to global growth and its demand for global products is still significant.

Last year China remained the world’s second-largest import country. The volume of commodities China imported has kept growing. During the same period, China’s direct investment to the rest of world has further expanded to $127.6bn, an increase of 10 percent on a year-on-year basis.

Recent volatility of yuan renminbi and fluctuations in the Chinese stock market have also caused concern of some analysts and become the focus of media.

To understand the issue, the point is that the fundamentals of China’s economy remain strong and Chinese policymakers still have plenty of policy tools to address the downward pressure, if at all.

China’s currency depreciation is mainly due to reforms to the yuan exchange rate formation mechanism. China has no intention to boost exports and obtain competitive advantages by devaluing its currency, neither does the yuan have any foundation of further depreciation.

Last year, the Chinese trade surplus reached almost $600bn and China still has $3.3 trillion in foreign reserves. Furthermore, with the yuan being put into the special drawing rights basket by the International Monetary Fund last year, the market is expected to enlarge its demand, which will further contribute to the stability of the currency.

The fluctuations of China’s stock market, together with similar scenes in bourses of other countries, reflect the unclear and generally pessimistic prospects of the world economy. The long-term stability could be seen from the fact that the Shanghai composite index always stayed around 3 000 points at the end of 2013, 2014 and 2015. It is true that China’s stock market is still a developing and relatively immature market and has its own problems to be addressed. But with value only accounting for roughly 60 percent of China’s total GDP, it will not significantly harm the whole real economy.

Looking ahead, the strongest driving force of China’s economic growth will be the ‘reform dividends’ from the annual sessions of Chinese National People’s Congress and Chinese People’s Political Consultative Conference currently being held in Beijing. The 13th Five-year Plan and the supply-side reform, along with other comprehensive reform measures, aimed at achieving innovative, co-ordinated, green, open and shared development, will be discussed and implemented in broad spectrum. All of these will add vitality to China’s economy.

China has both the courage and ability to break the old development pattern and transform to an innovation-driven and consumption-driven economy.

South Africa is also exploring new growth areas and making its economy more sustainable and inclusive. Reforms are never easy.

For the two economies, which are both in crucial and difficult transition, the only way out lies in sharing experience and deepening practical co-operation in areas such as industrialisation, agriculture, infrastructure and trade.

Let us work together hand in hand to achieve our goals.

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Why Singapore needs the sharing economy

Singapore has declared its plans to be a sustainable city. In the Sustainable Singapore Blueprint 2015, a policy document which maps out the country’s sustainable development strategies, the city-state has set out a collective vision that includes being a “car-lite”, zero waste nation by 2030.

It has also set reduction targets for its greenhouse gas emissions by 2030. Under Singapore’s pledge to the United Nations Framework Convention on Climate Change, it will cut its emissions intensity—that is, the greenhouse gases needed to produce every dollar of national income—by 36 per cent compared to 2005 levels.

Experts say that one largely untapped strategy for Singapore with huge potential is the sharing economy, where people use websites and mobile applications, or apps, to rent, lend, and swap goods and services with one another rather than buying them from shops or commercial companies.

April Rinne, a United States-based sharing economy consultant and World Economic Forum Young Global Leader, says that by encouraging people to pool existing resources instead of buying new goods, “there is no question that the sharing economy can help a society be more sustainable”.

With its high population density, technology-savvy society, compact urban layout, and a strong government commitment to efficiency, Singapore is perfectly poised to become a sharing nation, adds Rinne, who was in Singapore last month to speak on the sharing economy.

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An evolving economy

People have swapped, loaned, and rented items informally for centuries, but the sharing economy—also known as collaborative consumption, peer economy, and access economy, among other names—has gained formal recognition only in recent years.

The term has come to include everything from services that help neighbours lend each other household items and websites that allow a tourist to stay at a stranger’s home while on vacation, to apps that summon a driver at the tap of a button.

United Kingdom-based business consultancy PwC notes in a 2015 study that peer-to-peer lending and crowdfunding, peer-to-peer accommodation, and car-sharing are among the fastest growing sharing economy sectors globally.

PwC predicts that these sectors—along with online staffing, and music and video streaming—by 2025 will present a global revenue opportunity of US$335 billion, up from US$15 billion in 2013.

These new operating models certainly promise bigger business opportunities and profits, but they are also a chance to change how society uses resources, note experts.

Eugene Tay, founder and former president of the Sharing Economy Association of Singapore (SEAS)—an organisation set up in 2014 to promote the industry’s growth—notes that “car sharing or carpooling reduces the need to own a car, while the sharing of accommodation or co-working spaces reduces the resources to build more spaces”.

Members of SEAS include local start-ups such as item-lending services Rent Tycoons and Leendy, accommodation sharing site PandaBed and car-sharing firms CarPal and iCarsclub. International home-sharing giant Airbnb is also a member.

Other local enterprises include Carousell, an app for selling second-hand goods, and carpooling services like the Tripda app and, an online community.

Fenni Wang, co-founder, Rent Tycoons, says that “renting helps to reduce the wastage caused by avoidable purchases—for example, if an item is only needed for a one-off or short-term use”.

While there are no statistics on how these local companies have helped drive Singapore’s sustainability goals, global firms like Airbnb and on-demand ride service Uber have calculated their environmental impact.

Airbnb, for example, in a 2014 study, found that home sharing helps reduce water and energy use, greenhouse gases and waste generated compared to traditional hotel stays.

In North America, Airbnb properties used 63 per cent less energy than hotels per guest night, enough to power 19,000 homes for a year. They also consumed 12 per cent less water than hotels, which resulted in savings of 270 Olympic-sized swimming pools in 2013.

Staying in other people’s homes—most of which already have recycling facilities in place, and tend not to offer guests single-use toiletries like hotels do—also reduced waste, found Airbnb.

Car sharing or carpooling reduces the need to own a car, while the sharing of accommodation or co-working spaces reduces the resources to build more spaces.

Eugene Tay, founder and former president, Sharing Economy Association of Singapore.

Uber, meanwhile, says its vision is to have “many fewer cars on the road”. In addition to its basic service, called UberX, where people can use the app to call a driver in a few minutes, the company is also rolling out UberPool, which integrates carpooling into Uber’s standard business model.

First announced in August 2014 and launched in New York City in December that year. UberPool groups users travelling on similar routes and allows them to share a single ride—and the fare.

Not only does this allow passengers to save money, it can also reduce the number of cars on the road, says the San Francisco-headquartered company, which was founded in 2009 and now operates in almost 400 cities worldwide.

According to the company, for every fully utilised UberPool car, eight cars could be rendered unnecessary. This means that in a city like New York, UberPool could eventually result in 1 million fewer cars on the road.

Chan Park, Southeast Asia general manager, Uber, tells Climate Challenge that UberPool is likely to be launched in Singapore sometime this year.

Today, over 30 per cent of all Uber trips in Singapore start and end within 100 metres of a train station, Park shares. This likely means that “people are using UberX to complement their public transport use and bridge the first and last mile of their journey,” he says.

The first and last mile of a journey refers to the distance between a person’s home or office and the nearest public transport node, such as a train station. If commuters find it too inconvenient to bridge this distance—for example, if the walk is too long, or connecting bus services are too infrequent—they may find it more convenient to stick to using a car.

The government is already stepping up efforts to bridge this last-mile gap through measures such as improving bus services in residential neighbourhoods and providing ample bicycle parking at train stations for commuters.

To make it easier and more convenient for people to use bicycles to cover the distance between their homes and train stations, the Land Transport Authority (LTA) in July 2014 announced a study into how a public bicycle-sharing scheme could be introduced in the city-state.

Famous examples of bike-share programmes, where the public can simply rent a bicycle from one location and drop it off at another, include London’s Santander Cycles and YouBike, a public scheme in Taiwan’s capital city, Taipei.

The government is also exploring how shared autonomous vehicles—that is, self-driving cars—can overcome the last-mile challenge in another study, announced by LTA last June. These new vehicles could provide residents with a convenient last-mile solution, and encourage people to shift away from private car ownership, notes LTA.

Uncovering new opportunities

These reductions in new purchases, waste, and emissions are just the tip of the iceberg when it comes to how the sharing economy can help shape a more sustainable Singapore, say Tay and Rinne. But there are even more ways for the city-state to become a truly sharing nation.

Tay, for example, notes that most sharing businesses today operate on a peer-to-peer model, or in the business-to-consumer space.

“Businesses with underutilised equipment, vehicles, spaces and assets can share with other companies,” he says. If the government does the same, Singapore’s civil service could be “the first sharing government in the world”, he adds.

One government which has received much praise for its sharing economy initiatives is South Korea’s capital city, Seoul, says Rinne. In 2012, it launched the Sharing City Seoul initiative to promote collaborative consumption and resource sharing.

To use valuable assets like land more efficiently, the city’s leadership has opened up almost 800 government buildings for the public to hold meetings and events when they are idle.

Guided by a vision to make private car ownership obsolete by 2030, Seoul has also invested heavily in public bicycle sharing services and aims to have 1,200 car-sharing hubs in the city by 2030, up from 292 in 2013.

Similar public sector leadership could make a big difference in Singapore, says Rinne.

On its part, the Singapore government has already taken several steps recently to facilitate the growth of the sharing economy while at the same time addressing some common concerns regarding the industry such as safety, privacy, and proper taxation.

For example, given the popularity of home-sharing companies like Airbnb, the Urban Redevelopment Authority (URA) is re-assessing a law which states that it is illegal for a person to rent out their home on a short-term basis.

The agency last January embarked on a public feedback exercise to decide whether private residential properties in Singapore should be allowed to be used for stays shorter than six months. At the end of the feedback exercise, URA said that it is reviewing the matter and will announce details when ready.

Meanwhile, LTA has also taken steps to encourage people to carpool, a practice which results in more efficient car use and fewer vehicles on the road.

Until recently, drivers could not accept any compensation for offering others a ride, which discouraged them from going out of their way to offer strangers a ride.

But this changed last May when LTA passed laws allowing drivers to receive payment from passengers as long as it did not exceed trip expenses such as fuel and road tolls.

Virtually every city in the world is tackling the same uncertainties and regulatory challenges that Singapore is working on, says Rinne. When these issues have been addressed and sharing is the ‘new normal’, it could transform daily life for Singaporeans, she adds.

In an ideal scenario, every resident will tap on sharing services to make life more convenient and save money, and the government will use these platforms to better deliver public services, streamline its own operations, and fulfil the nation’s sustainability goals.

“This is not an unachievable utopia,” she says. “It is a bold ambition which is 100 per cent doable, and I am more confident that Singapore will get it right than other places”

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How WeFarm Connects Small Farmers Without the Internet

There are about 500 million small-scale farmers on Earth, and most of them live on less than $1 a day. That’s half a billion people laboring below the global poverty line, surviving and sometimes struggling to improve their harvests. They’re often separated from larger population centers, or lack the means to educate themselves on specialized farming methods, or run up against natural and man-made obstacles that leave the futures of their farms in jeopardy. In these situations, knowledge is as valuable a tool as a shovel, a seed or a plow. But whereas the internet is readily available to Western nations on the grid, farmers in Africa and parts of South America operate on a digital deficit.

That’s why WeFarm calls itself, “The internet for people without the internet.”

Founded in 2014, WeFarm is a free, peer-to-peer service designed for farmers living around the world. It enables farmers to share information with each other via SMS (Short Message Service), or text messaging. WeFarm translates and connects queries from continent to continent, and has thus far provided more than 100,000 answers to its 43,000 registered farmers.

WeFarm CEO and founder Kenny Ewan developed the service after spending seven years working in sustainable agriculture with indigenous communities in Peru. Many of the communities he lived and worked in were remote and without regular access to the internet, which left them isolated from their neighbors. Ewan was largely concerned about the effects of climate change on the region, and how global warming will necessitate a change in harvesting techniques.

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Today, over 97 percent of scientists agree that global warming will increasingly impact the way human beings live. Developing countries will be hit the hardest of all, making them the critical locus for climate adaptation strategies.

According to Zoë Fairlamb, WeFarm Comms and PR Manager, the idea for a peer-to-peer service came to Ewan when he saw how innovative certain farmers could be when meeting the challenges of climate change. “Kenny noticed, quite soon on, that people could come up with these low-cost, ingenious solutions, but farmers five miles down the road wouldn’t have heard about what these people were doing,” she told Planet Experts. “So that prompted him to think about communication and really pose the question, ‘Why isn’t there a global resource for information on agriculture?'”

Ewan began the process of creating that resource in 2009 when he joined Cafédirect Producers’ Foundation (CPF), a UK-registered charity that works with smallholder farms and their organizations.

Connecting Farmers and “Changing the Conversation”

Internet connections might be less common in the developing world, but mobile technology is pervasive. GMSA estimates that there are 7.5 billion mobile connections, and 3.7 billion unique subscribers, worldwide. By comparison, a little more than a third (36 percent) of the planet is online. In Africa, many countries have leapfrogged landline technology and gone directly to mobile phones. According toPew, some 90 percent of adults in Nigeria and South Africa own cell phones (mostly “basic feature” phones capable of calling and texting).

Indeed, for most Africans, SMS technology is already an invaluable tool. In 2007, Vodafone launched M-Pesa, a mobile phone-based money transfer system, for mobile network operators in Kenya and Tanzania (the “M” stands for mobile, the “pesa” is Swahili for money). It was the success of mobile tech like M-Pesa that spurred WeFarm to make its initial launch in Kenya in February 2015.

“In East Africa, people are very used to using mobile technology for other services,” said Fairlamb. “There’s also a very strong culture in Kenya and Uganda of people sharing and giving. People trust one another and want to share and help each other.”

In 10 months, WeFarm registered about 33,000 Kenyan farmers with its service. “People love it,” said Fairlamb.

The ultimate goal is to create a global network for small-scale farmers in Africa, Asia and Latin America. As Fairlamb explains, “Basically, a farmer can register on WeFarm’s service completely for free just by sending an SMS message to our national number. Once they’ve signed up to the service, they can then ask any question regarding farming and we distribute that question to other farmers locally, nationally and internationally, and the farmer who asked the question should receive between three to five crowd-sourced answers within a couple of hours without having to leave their farm, without having internet access and without having to spend any money.”

It’s a fast, free and convenient solution for farmers on the edge of developing infrastructure, yet marketing the service proved an initial challenge. By definition, these unconnected farmers are scattered and separated, remote and difficult to reach. “We’ve had to be quite inventive in solutions of ways to reach these people,” said Fairlamb. Part of that has been making use of CPF’s farming network and training farmers to become WeFarm ambassadors, which then go out and train others in turn. The most successful method for getting the word out, however, has been radio.

Interviews with radio presenters on both the local and national level have had incredible results, said Fairlamb. “There was one occasion where we did a national radio show and within the space of an hour we had 4,000 people sign up to the service. It was really exciting seeing everyone registering that quickly.”

WeFarm’s Uganda network has also shown promising growth. After launching in late November, they had already signed 2,500 farmers by mid-December. A Peru launch earlier in the year has also added invaluable insights to WeFarm’s information network. “We’re seeing some amazing things, pieces of advice, coming through the system from Peru,” said Fairlamb.

The growth of the service in Africa alone has been extremely gratifying for the WeFarm team. “I think Kenny [Ewan] would say that it wasn’t a surprise but maybe a relief just how much farmers use it and how much they value it,” said Fairlamb.

“There were a lot of people who questioned the peer-to-peer model, but that’s the core of the business. There’s kind of a widespread approach in international development circles whereby people kind of assume and think that people who are living in poverty need to be told what to do. WeFarm wants to be about changing that conversation and giving these people a voice, showing their knowledge is valuable and giving them a way to share that information.

WeFarm’s next big launch will be in Côte d’Ivoire. A Tanzania launch is forthcoming, as are launches in India and Brazil.

Balancing Social Good With Making Profits

Though a humanitarian endeavor, WeFarm is also a for-profit business. Yet it’s a business that is following the growing economic ethos that profit is not divorced from doing good.

The social good of the WeFarm SMS service is giving farmers the means to communicate with each other and share techniques and strategies for improving crops and adapting to climate change. That service is free, so the revenue comes from the wealth of insight that emerges from that communication. Still in the pilot stage, WeFarm hopes to sign up businesses to a monthly service that provides disaggregated data about what’s going on in their various supply chains.

As Fairlamb explains, “Small scale farmers are responsible for producing 70 percent of the world’s food, but the majority of corporate food and drink businesses, retailers, any kind of consumer brand that has small scale farmers in their supply chain, has next to no visibility as to what goes on in that bottom rung. So we offer a service to these types of businesses that enables them to improve supply chain sustainability, make better decisions and help the people who are producing the products that they rely on.”

For a tea company, that might look like, “What are the top three questions that tea farmers are asking this month?” or the top two crops that tea farmers are looking to diversify into. Disaggregated data from WeFarm can also help identify challenges facing various farmers and techniques for overcoming them. WeFarm is also interested in providing lead generation and SMS advertising for more local businesses.

“Constantly on the system we see people asking questions about ‘where can I find this type of seed’ or ‘where can I buy a solar panel,’ ‘I’m interested in a micro-finance loan, how do I go about finding that?’ We’re quite well positioned to be able to connect these farmers to the products and the services that they’re looking for,” said Fairlamb.

WeFarm is currently seeking investment to scale up their operations and connect a million farmers by the end of this year. Thus far, the company has received £500,000 in seed funding from and Wayra, Telefonica’s incubator. WeFarm recently opened its Series A funding round and is seeking £2.3 million in investment.

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Automotive industry highly unlikely to show growth in 2016 – KPMG

The lacklustre economy, consumers’ desperate financial position and affordability of vehicles are three key areas that will stunt the growth of the South African automotive industry this year, says audit, advisory and tax services firm KPMG. According to KPMG auto- motive sector partner Gavin Maile, the local automotive industry will continue to decline, as the country currently has “extremely sluggish” gross domestic product (GDP) growth of about 0.7%.

“South Africa would need to maintain a GDP of 4% before any decent growth in vehicle sales can take place. Also, we foresee that a hike in interest rates, inflation and the low GDP will not help ease the pressure on the consumer in 2016,” he warns. Further, KPMG senior industry analyst Ashleigh Raine-Botha says local motor manufacturers will also feel the pinch of the exchange rate weakness on both imported components and vehicles and, subsequently, will need to increase their prices.

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“Overall, the picture does not look good – consumers are in the weakest position that they have been in for a long time and are facing increases in every direction, as electricity and water prices will most likely rise, along with rates for vehicle services and spare parts,” she points out. Maile and Raine-Botha agree that the devaluation of the rand against most currencies at the end of December has rubbed salt in the wounds of motor companies that import vehicles or components.

“Companies that produce vehicles locally are also impacted on by the foreign exchange rate which has taken its toll on the cost of importing components used to manufacture vehicles. The low oil price has shielded South African motorists from a massive increase in the fuel price, but, consider the implications when the Brent crude oil price increases. This will affect our fuel price drastically, making fuel costs for any consumer or logistics operation extremely expensive,” Maile explains.

He adds that the weakened economy has made the market less conducive for buying and even operating vehicles, as highly indebted consumers face increases in insurance, fuel and other services, which significantly influence being able to afford and maintain a vehicle. New Mobility Despite the difficulties that the automotive industry faces, a new movement in mobility is being followed to mitigate issues such as rising fuel costs and expensive services. “The global movement to becoming more environment- friendly has driven the notion that smaller combustion engines and electric engines are often more powerful and cheaper to operate. KPMG surveys on this matter have noted that more people are turning to alternative power sources for their vehicles. Consumers will soon realise this is the future,” Maile highlights. While there is a global shift towards using alternatively powered vehicles, such as electric cars, Raine-Botha explains that infrastructure to accommodate electrical cars in South Africa is not yet on par with the advanced economies. “The hindering factor for such vehicles is the lack of an adequate infrastructure for charging purposes. Until that is well established, the market will not take off.

The onus is on both government and the private sector to ensure that this is taken care of before we are likely to see good growth in sales of electric vehicles.” She concludes by indicating that Nissan and BMW announced a partnership to investigate the possibility of creating infrastructure for electric vehicles, adding that “this shows initiatives are in place by the private sector”.

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How sustainable cities can drive business growth

The notion of sustainable cities usually conjures environmental themes, but sustainable urban design’s greatest impact could be on economic performance. By creating improved quality of life conditions for residents, sustainable cities simultaneously lay the foundation for wide-ranging economic benefits.

The greatest competition in today’s footloose economy is the fight for human talent, and urban quality of life strongly determines whether cities can attract a smart workforce, as well as the innovative new companies employing them.

Cities weren’t always ideal for business, and for decades the attraction of space and privacy drew people toward suburbia, with businesses following suit. But within the last decade people have begun returning to the city, and this trend symbolically accelerated in 2015 when millennials overtook Generation X as the largest generation in America’s workforce.

This generation is often characterized as smart, single, career-focused and experience-driven — a group attracted to cities with walkable neighborhoods, public transportation options, educational opportunities and cultural activities. But more than just young adults are increasingly drawn to the features of urban living, and employees of all ages are working longer hours, pushing them to live closer to work to free up more precious leisure time.

A changing workforce

Smart companies have taken heed, realizing the benefits of an urban location over a suburban one.

A recent report by Smart Growth America, “Core Values: Why American Companies are Moving Downtown (PDF),” tracks the migration of nearly 500 businesses back downtown, with firms citing increased employee recruitment and retention as the main reason for their move.

And the talent pool these companies seek prefers both living and working in vibrant, accessible neighborhoods. As such, the surveyed companies relocated to more central, urban areas that increased their average locational walk scores (from 51 to 88), average transit scores (from 52 to 79) and average bike scores (from 66 to 78).

Some of Corporate America’s biggest names are leading this charge.

In January, General Electric announced it would relocate its headquarters from suburban Connecticut into downtown Boston as part of the company’s effort “to attract the talented workers who prefer to live and work in cities.” Major companies joining the suburban exodus include ConAgra Foods and Motorola Mobility in Chicago, Expedia in Seattle and Zappos in Las Vegas.

The smart (and green) choice for cities

So if today’s workforce prefers modern urban living, and businesses seek locations catering to employee interests, which urban development practices should government and developers consider in long-term city planning?

A handful of urban design features form the core of sustainable cities, all of which have the common objective of being focused on the person (or employee) instead of the car, street or building.

These features, as outlined in the “Green and Smart Urban Development Guidelines” developed by our firm, Energy Innovation, are tailored to human interests while supporting a clean urban environment and healthy economy. The Guidelines outline a dozen features related to urban form, transportation and energy and resource management, comprising the foundation of sustainable urban development.

Five features stand out for cities and businesses seeking smart growth synergy:

  1. Mixed-use neighborhoods: Intermingling residential, commercial, cultural and institutional spaces makes amenities more accessible. By locating destinations closer together, people feel less need to drive from one place to the other, encouraging them to walk or bike more often.
  2. Public transit and transit-oriented development: In sustainable cities, public transit becomes an alternative to cars when the distance between destinations is too far to walk or bike. Cities encourage public transit use by focusing development around public transit systems through transit-oriented development, which locates amenities or services near transit stations or on transit lines.  
  3. Non-motorized transit: Non-motorized transit such as walking and biking are priority modes of transportation in sustainable cities, and are reinforced by mixed-use development locating amenities and services within comfortable distances.  
  4. Small blocks form a connected urban grid: Small street blocks create a dense urban grid, enabling direct pathways and making trips shorter and safer for pedestrians and bikers. Narrower streets make intersections less of an obstacle, and when combined with elements such as one-way streets or dedicated bus lanes, help traffic move more efficiently, too. 
  5. Public green space: Attractive public spaces such as parks and plazas bring economic and cultural richness to a city by providing neighborhoods with an identity and sense of community, while also offering an outlet from the clamor of regular city life.

The business payoff

These features have an enormous payoff for a city’s inhabitants — residential and business alike. Our recent study, “Moving California Forward (PDF),” found significant economic benefits from smart growth – a development pattern emphasizing compact or infill urban development to facilitate mixed-use neighborhoods and non-motorized transit options – in California’s urban regions. 

Benefits included average annual household savings of up to $2,000 from reduced transportation costs and more than $1 billion in annual public health savings from reduced air pollution and car use, both by 2030.

Sustainable cities directly benefit businesses by attracting a smart and diverse workforce, and indirectly boost the corporate bottom line by improving workforce health and time efficiency. These “payoffs” from sustainable cities fall into four categories:

  • Increased time efficiency: Commute times are reduced when people live closer to their jobs, and the transition from private cars to public transit or non-motorized transit reduces traffic congestion.  Today, the average car commuter loses 42 hours every year — up to 80 hours in some places — due to traffic. Companies benefit when employees avoid sitting in traffic, earning back nearly two days’ worth of time every year.
  • Access to talent: Skilled workers increasingly want to live in walkable and centrally located places close to services, amenities and job opportunities. Not only are companies more attractive to skilled workers if they are located nearby, but their central location accesses a greater talent pool for hiring.  
  • Improved health: A physically and mentally healthy workforce is a more productive workforce. Shorter commutes means more time for people to get involved in activities improving their minds and bodies — research shows every hour per day spent driving increases the risk of obesity 6 percent. Alternatively, biking even just a couple miles to work can increase cardiovascular fitness and reduce cancer mortality. A healthy workforcereduces workplace absenteeism while increasing job productivity (quantity of work) and performance (quality of work).  
  • Innovation inspired by diversity: Sustainable cities attract demographically and professionally diverse talent — a major catalyst for new ideas. In “The Rise of the Creative Class,” Richard Florida notes diversity trumps ability in driving innovation and creativity. Access to public spaces, a feature of sustainable cities, fosters interaction among diverse groups of people.

Cities with universities, laboratories and cultural institutions are also the perfect platform for cross-industry collaboration. Mixed-use development facilitates connections through proximity to spaces where people can interact, while walking and public transit encourage unplanned connections and exchanges among people.

The smart choice

The city always has had a dynamic relationship with its businesses, and today’s influx of new inhabitants opens fresh opportunities for sustainable urban development.

In “The Death and Life of Great American Cities,” Jane Jacobs wrote, “Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.” A city’s identity is the product of its inhabitants, and it is nothing without them — much like businesses, the identities of which are driven by their employees.

As peoples’ preferences evolve over time, cities must grow sustainably to attract the right mix of new residents and innovative businesses.  While “sustainable” sounds complicated, the basic pattern is pretty simple — build up walkable, bike-friendly, transit-oriented, mixed-use neighborhoods.

It is the city’s role to adopt smart growth features to keep “providing something for everyone” — that’s the smart choice and the sustainable choice. The result will be new liveable places, better for business and the environment.

Source: greenbiz

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SA leads continent in consumer spending

Harare – South Africa has been ranked as the most promising market for consumer spending by the middle-class, pipping Africa’s biggest economy, Nigeria, which is ranked second, findings of a survey showed this week.

The survey, conducted by Agility Emerging Markets Logistics, also ranked Kenya and Ghana in third and fourth positions respectively, according to executives surveyed under the index.

About 1 100 executives, who responded to the survey, also mentioned that sub-Saharan Africa “remains a challenging frontier” for several other companies.

The index identifies the consumer spending sector as an equally important contributor to the region’s economic growth as mineral and commodity sectors.

Economists and experts from the International Monetary Fund (IMF) have warned African economies such as Zambia, Zimbabwe and Nigeria against heavy reliance on the commodity industry.

“The (African) market is open for first movers who can navigate risk and nurture African talent. The opportunity is for those seeking to build long-term, sustainable businesses that bring world-class practices and adapt to local conditions,” said Geoffrey White, the chief executive of Agility Africa, which compiled the index.

Driving the consumer market industry in most of the African countries is a “fast-growing middle-class”, with executives also highlighting that “poor infrastructure, lack of power generation and corruption continue to pose the most risk to African economies” and to their growth prospects.

“The results show a serious disconnect between the perception of the market and actual opportunities. Africa’s requirement for logistics services and supply chain expertise is growing every day,” added White.

South Africa’s economy is being hobbled too by lower metal prices and the IMF has cut its economic growth forecast for the continent’s number two economy to 1 percent.

A steep hike in power tariffs that is expected this year could also further worsen the situation for mining companies that already frequently have to deal with a restive labour force.

The government said the economy would grow by about 1.7 percent this year and all eyes would be on Finance Minister Pravin Gordhan and his budget statement next month.

Experts say he will likely announce growth forecasts in the region of 1.5 percent to factor in difficulties and slowing output in the country

. However, a number of economists and the IMF are forecasting economic growth this year of less than 1 percent.

South Africa is ranked at 16, followed by Nigeria at 17, as having the most “advanced logistics industry and transport infrastructure”.

The index report says South Africa’s economy is battling “power shortages, slumping commodity prices, a plunging currency and labour unrest”.

Nigeria, which registered the biggest gain by any country, was said to have “enormous potential”, while its economy – which is heavily reliant on oil – “has been hurt by low energy prices”.

Industry executives said they viewed oil prices and China’s economy as the leading risks to the global economy in 2016.

Source: iol

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Treasury says power constraints getting government attention

South Africa’s National Treasury said on Saturday electricity supply constraints were getting government attention at the highest level after rating agency Fitch said an unstable power supply had led it to cut growth forecasts.

Fitch affirmed its BBB rating but warned that the negative outlook for Africa’s most advanced but ailing economy reflected a range of risk factors. Print Send to Friend .

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These included weak GDP growth and a failure to reduce the budget deficit and stabilise the government debt/GDP ratio “that may, individually or collectively, result in a downgrade”.

“Government recognises that the country’s economic growth performance needs to be higher in order to address the country’s challenges,” the treasury department said in statement. “Resolving the energy challenge is a priority”.

South Africa is building three large-scale power stations to reduce chronic electricity shortages that have forced power utility Eskom to impose rolling blackouts to prevent the grid from collapsing.

One of them, Medupi, produced power for the first time earlier this year from one of its six units. Once completed the plant will add nearly 5 000 MW to the country’s total generating capacity of 40 000 MW. Fitch had warned in March that a downgrade of its BBB rating for South Africa — two notches above junk status — was more likely than not.

It cited concerns that South Africa’s economy was running quite large twin budget and current account deficits, leading to rising public and external debt ratios. The treasury department said it would broadly stick to its spending ceiling budget plans of 3.9% of GDP for the 2015/16 fiscal year.

Source: engineeringnews

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Recycling key to meeting goal of zero plastics to landfill by 2030

Industry body Plastics South Africa (SA) believes that its sustainability objective, dubbed ‘Zero Plastics to Landfill by 2030’, which was launched in February last year, is both realistic and achievable. The organisation says the goal, which will be pursued in phases, will rely heavily on improved access to solid waste streams, with separation at source viewed as increasingly critical to bolstering recycling rates.

Plastics SA executive director Anton Hanekom says the rising cost of landfill space places recycling at the top of the agenda for all packaging streams and that its sustainability initiatives are, thus, focusing on developing strategies that will enable the plastics industry to increase recycling rates.

Government is also supportive, but Environmental Affairs Minister Edna Molewa believes that waste as a resource remains neglected, notwithstanding rising volumes and advances in technology.

Speaking during the National Waste Manage- ment Summit in March, the Minister argued that current waste management practices were inadequate and urged stakeholders to pursue innovative ideas to improve waste management systems and drive the recycling economy.

Molewa said the country should move towards implementing Department of Environmental Affairs (DEA) policies and waste management strategies, which had been designed to encourage reuse, recycling and recovery, with disposal of waste at landfills being a last resort.

The DEA was working with provinces, municipalities and industry to ensure that the economic benefits emanating from recycling waste were realised and that the country moved away from dumping recyclable waste at landfill sites.

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Plastics SA hopes that higher recycling rates will positively affect the economy, resulting in the initiation of programmes that will enhance locally manufactured plastic goods, create employment, in line with the National Development Plan (NDP), and increase consumer partici- pation in the recycling process.

Key Drivers

Plastics SA has identified seven key aspects of improvement and development to align the plastics industry’s objectives with the sustain- ability objective of the NDP.

These areas are: developing an effective infrastructure across the value chain, ensuring ongoing research and development into new technologies and markets, establishing credible data sources and information sharing across the value chain, developing skills to enable technology and infrastructure, changing and improving consumer understanding and behaviour regarding recycling and waste disposal, developing industry collaboration towards the outcomes envisioned by Plastics SA, and ensuring constructive and effective engagement and collaboration between industry and government.

To achieve these goals, Plastics SA has envisioned a phased development of the initiative to 2030 – the foundation-setting phase (2014 to 2017), the building and innovation phase (2018 to 2020) and the optimising phase (2020 to 2030).

During the foundation-setting phase, Plastics SA’s objective is the uniform operation of the plastics industry and the provision of infrastructure guidelines that need to be followed by all stakeholders, as well as the establishment of a research and development plan, and the development of a mixed plastics recycling technology that will foster the

Additionally, the phase will include the development of an industry statistics tool and a government engagement plan; life-cycle assessments of plastics; the implementation of a skills map and government training for stakeholders; recycling labels on plastic products sold to get consumers involved; and the initiation of clean-ups.

The building and innovating phase will aim to put waste-to-energy solutions in place, trigger the building of recycling centres, provide statistics and life- cycle assessments to inform industry of the progress of the initiative, foster ongoing collaboration with government, increase collaboration to include other packaging companies and designate trained waste-management officers appointed by government to different recycling centres.

The optimising phase will greatly emphasise the recycling rates and put solutions in place for all remaining waste, implement recycling campaigns across the country, and optimise government and industry collaborations.

Recycling Initiatives

To further strengthen the initiative, recycling company Petco’s largest contracted recycler, Extrupet, has aligned itself with the Zero Plastics to Landfill by 2030 initiative following the launch of its Bottle-to-Bottle Recycling Plant, in Wadeville, Germiston, last week.

The new facility will supply an additional 14 000 t of polyethylene terephthalate (PET) resin a year to the PET packaging industry and will eventually divert an additional 22 000 metric tons of postconsumer PET bottles a year from landfills. In this way, jobs can be created and landfill space can be saved, which is in line with the Waste Amendment Act’s objective.

In the last decade, Petco has increased PET recycling rates in South Africa from 16% in 2004 to 49% by the end of 2014. This rate is set to rise in 2015, with a target of 50% being chased.

Moreover, the facility will also allow Petco to meet its recycling target of 70% by 2022, which is an estimated growth amounting to 170 000 t of PET bottles being recycled.

Acknowledging the facility as being a milestone in the drive towards increasing the recycling rate, Hanekom draws on statistics released by the South African Plastics Recycling Organisation last year on behalf of Plastics SA to emphasise the need to continue recycling initiatives in order to reach the 2030 target.

“Since 2009, the amount of [plastic products] manufactured in South Africa has increased by 34% to 1.4-million tons a year. In 2013, 20% of the plastic waste produced was recovered and recycled either locally or internationally. This amounts to 280 000 t of plastic being diverted from landfill, which reflects a 4.1% increase on the previous year,” he says.

Moreover, Hanekom points out that almost 80% of plastic waste recycled in South Africa during 2013 was derived from plastic packaging, resulting in an 8.9% increase from 2012. However, the industry failed to reach its 40% recycling rate target in 2013, which, he notes, was as a result of the economic recession in 2013.

This has also led to a 10.6% decrease since 2012 in formal employment created through plastic recycling. Of the 4 510 formal jobs supported by the plastics recycling industry in 2013, 7.7% were contract workers. These workers were involved in the sorting of waste on a full-time basis and were paid for their output and did not earn a set wage for time spent on the job.

Additionally, the research indicates that the amount of plastic waste collected from households and businesses in 2013 increased, with recyclables sourced from landfills and other postconsumer sources also having increased from 59% in 2012 to 66% in 2013.

Economic Benefits

The Recycling and Economic Development Initiative of South Africa (Redisa) says that exploring ways in which plastics can create a circular economy through collaboration between the public and private sectors can assist the plastics industry in reaching its target.

“By involving all stakeholders, government and the private sector, the Redisa tyre industry circular-economy model is working,” says Redisa director Stacy Davidson.

She adds that tyre manufacturers and importers are taking responsibility for their waste without losing sight of focusing on their core business; unemployed people are finding gainful employment as small, medium-sized and micro- enterprises are being developed and supported by the Redisa integrated industry waste-tyre management plan (IIWTMP); and the significant environmental threat that waste tyres represent is effectively being addressed.

The Redisa IIWTMP, approved by Molewa in 2012, states that tyre producers (manufacturers and importers) are charged a waste management fee of R2.30, excluding VAT, on every kilogram of new tyre rubber produced. The funds collected are then used to develop and support the collectors, storage depots, recyclers and secondary industries that manufacture other products from recycled output.

Davidson indicates that the principle of recycling and reusing waste is a solution for not only waste tyres but also other waste streams, such as packaging and general waste. “This can help Plastics SA to deal with the plastic waste issue.”

Moreover, the Minister indicated during the summit that the National Environmental Waste Amendment Act of 2014 aimed to increase institutional capacity for managing waste streams and put mechanisms in place for the proper pricing of waste.

“This amendment outlines the method for the pricing of waste streams to ensure that funds are collected to promote the recycling economy. We all agree that diverting waste from landfill sites requires infrastructure, which must be funded,” she stated.

Therefore, Molewa noted, government had to intervene to put mechanisms in place for the provision and coordination of this infrastructure and ensure that South Africa started to capitalise on the benefits of waste management.

Promoting Local Market

Plastics SA sustainability director Douw Steyn mentions that the plastics industry is also considering the stimulation of economic growth by increasing exports and replacing imported plastic products with locally manufactured products that can be manufactured from recycled and reused plastic waste. This will not only be in line with the goals of the NDP but also promote the local plastics industry.

“South Africa has a relatively small plastics market with no strong ‘Buy Local’ drive from consumers. Therefore, we are working on increasing exports into Africa as part of our regional integration strategy, which will enable the plastics industry to take advantage of markets,” he explains.

Steyn points out that, over the past 15 years, plastic imports from Asia, particularly China, India and South Korea, have increased signifi- cantly, resulting in the closing down of local plastics manufacturing businesses, such as medical syringe manufacturers.

He says imported plastic products from Asia are significantly cheaper, but lack the quality of and are of a lower standard than those manufactured locally.

However, Steyn says, because consumers are under financial pressure, they often select the cheapest option, which impacts on the local industry, as more imported products result in fewer jobs in South Africa.

Owing to the increase in plastic imports, Plastics SA is also focusing on improving innovation and skills development in the industry.

“We need to be more creative with regard to the type of products we manufacture in South Africa,” he states, adding that most plastic products are commodities, such as bottles and bags, and that there is a lot of local competition regarding the manufacturing of these products.

“As a result, we need to think about how niche products can be created so that they can be exported. In so doing, value is added on the locally produced product, which is linked to skills development,” Steyn explains.

Although the industry will consider recycling as the first choice of dealing with plastic waste, Plastics SA has also considered the waste-to-energy recovery option, which can help save natural resources, he says.

“Also, this can support the objectives of saving landfill space, reducing litter, saving energy and reducing carbon dioxide emissions,” he concludes.

Source: engineeringnews

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Africa in need of sustainable agricultural production

The lack of interest in farming among young rural people is also a risk to consider when it comes to Africa’s agricultural landscape.
Africa is in dire need of transforming its agricultural sector. According to the Food and Agriculture Organization (FAO) of the United Nations, agricultural production needs to increase 60% by 2050 to keep up with the expected demand for food*. These pressing issues will be discussed at the thought-provoking and highly anticipated Food Security Seminar taking place on 24 June 2015 during Sustainability Week at the CSIR International Convention Centre in Pretoria.
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Political instability, limited access to resources and funding, poverty, skills shortages and a changing climate are just some of the challenging factors impacting food security in Africa. The lack of interest in farming among young rural people is also a risk to consider when it comes to Africa’s agricultural landscape. Thought leaders and experts in the field of food security, agriculture and fisheries will share the latest thinking and best practice in the changing face of this industry during Sustainability Week, which will take place on 24 June 2015 at the CSIR.

Four interactive sessions will contribute to the formulation of consensus on the best course for African countries in the food security, agriculture and fisheries sectors. The first session will focus on climate change mitigation and adaption where Inge Kotze, Senior Manager for Sustainable Agriculture at the World Wide Fund for Nature – South Africa’s (WWF-SA) will define the issues of climate change and agriculture. The session will close with a panel discussion addressing key actions to mitigate primary causes of emissions and how to adapt to inevitable changes in the sector.

“There is an urgent need for the world’s farmers to be empowered to produce more food per unit of land, water and agrochemicals, while confronting widespread physical resource scarcity, a changing climate, and rapidly increasing input costs,” says Kotze.

Biodiversity and productivity in land use will be the theme for the second session where Jan Coetzee, Project Extension Officer at The South African Breweries (SAB) will enlighten attendees with a case study on better barley, better beer. This session will ultimately address the big question of whether intensive farming work can co-exist sustainably with the local biodiversity to ensure conservation and the ongoing supply of ecological services.

During the household food security session, freelance science writer Leonie Joubert will shed light on what food security really means. Paul Barker from Here We Grow Again will speak about the direct impact food gardens have on food security. The panel discussion will round off this session by framing the required policy and infrastructure foundations to enable broad-based urban farming.

The final compelling session will address rural poverty by stimulating the rural economy. Speakers will explore how to convert subsistence farmers into successful commercial farmers to extract the economic potential of land. The session will also delve into Afrocentric labour intensive approaches to improve productivity and uplift rural communities.

“A company such as BASF can play a defining role in addressing the challenges facing our planet, including those of energy and food resources, as well as urban living,” says Joan-Maria Garcia-Girona, Vice-President and Managing Director of BASF South Africa and Sub-Sahara.  “In 2050, the world’s population will reach nine billion with 70% of the people living in cities. Resources are already scarce and we have only reached almost seven billion people. To feed nine billion people in 2050, we will need twice as much food as today. Innovation in agriculture is vital to address the gap between food demand and supply. We at BASF have a 150 year legacy of providing farmers with innovative solutions to protect crops and improve sustainable agricultural production.”

The Food Security Seminar, sponsored by Nedbank and BASF forms part of the larger Sustainability Week, organised by alive2green, which runs from 23 to 28 June 2015. Associate sponsors of the Food Security Seminar include: Participate Technologies, Massmart and Backsberg Estate Cellars.

Source: wecanchange

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Power problem features in South Africa’s fall in 2015 competitiveness ranking

South Africa slipped one position, from 52 to 53, in the latest world competitiveness ranking, which highlighted power and infrastructure shortfalls, high youth unemployment, as well as inadequate education and technical skills availability as key challenges to the country’s competitive position.

However, the biggest year-on-year decline in the performance of the South Africa economy related to energy infrastructure, which recorded the largest percentage decline from the 2014 ranking. MORE INSIGHT Africa installed nearly 1 GW of wind power in 2014 – report DTPS allocates R200m for first phase broadband roll-out.

The yearly ranking, which is compiled by the IMD World Competitiveness Center using a combination of hard and survey data covering the areas of economic performance, government and business efficiency and infrastructure, continued to rank the US as the world’s most competitive economy of the 61 surveyed, with Venezuela remaining in last position. South Africa remained the only African country to be included in the ranking, which has been compiled under the aegis of Swiss business school IMD since 1989.

Hong Kong (2) and Singapore (3) overtook Switzerland, which dropped to fourth position, with Luxembourg rising from 11 to sixth to join Canada (5), Norway (7), Denmark (8), Sweden (9) and Germany (10) in the top ten. The United Arab Emirates dropped out of the top ten, moving from 8 in 2014 to 12 in the 2015 rankings.orld

South Africa’s decline was in line with the performance of a number of other large emerging economies, with Brazil falling from 54 to 56, Thailand from 29 to 30 and Malaysia from 12 to 14, while Russia’s ranking declined more sharply from 38 to 45. That said, China rose from 23 to 22, Mexico improved from 41 to 39 and Taiwan rose from 13 to 11, while India sustained its position at 44.

“This trend shows the difficulty in grouping emerging markets in one category, as the issues impacting their competitiveness differ. China’s slight increase stems from improvements in education and public expenditure, whereas Brazil suffers from a drop in domestic economy and less optimistic executive opinions,” the IMD World Competitiveness Center explained.

The modest fall in South Africa’s ranking was unsurprising and came amid news of weak first quarter employment and growth statistics, with the official unemployment figure rising to a dismal 26.4% from 24.3% and the economy growing by only 1.3% in the first three months of the year.

The ranking was affected materially by a decline in the performance of the country’s energy infrastructure, where South Africa ranked last (61) in the 2015 report. It also performed poorly in the areas of labour relations and workforce productivity (61); life expectancy and health (61); unemployment and social cohesion (60); Gini coefficient and skilled labour (60); pupil-teacher ratio and labour regulations (59) and youth unemployment and  the current account balance (57).

By contrast South Africa ranked well in areas such as the cost-of-living index (1) and office rent (7); effective personal income-tax rate (2) and employer’s social security contribution (3); total public expenditure on education (3) and secondary school enrolment (7); stock market capitalisation (3) and finance and banking regulation (9).

IMD World Competitiveness Center director Arturo Bris said that a general analysis of the 2015 ranking showed that top countries were “going back to the basics”.

“Productivity and efficiency are in the driver’s seat of the competitiveness wagon,” he said, noting that nine countries from the top ten were also listed in the top 10 of the business-efficiency factor, which focused on the extent to which the national environment encouraged enterprises to perform in an innovative, profitable and responsible manner. It was assessed through indicators related to productivity such as the labour market, finance, management practices and the attitudes and values that characterize the business environment.

In this area, South Africa fell from 51 in 2014 to 52, having slipped from a ranking of 37 in 2012, with a deterioration in a number of the sub-factors including productivity and efficiency (58 to 60), labour market (55 to 58), finance (24 to 26), management practices (35 to 42) and attitudes and values (50 to 54). “Simply put, business efficiency requires greater productivity and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time,” Bris explained, adding that increasing productivity remained a fundamental challenge for all countries.

Source: engineeringnews

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