Financial Mail

The small city conundrum

Cities like Pietermari­tzburg, Tlokwe and Polokwane need to reinvent themselves if they are to compete for investment

- Bac is a director in Grant Thornton’s property and constructi­on division

The 2016 municipal elections are over. Politician­s campaigned tirelessly on issues of service delivery, infrastruc­ture, crime and the scandals engulfing President Jacob Zuma, scoring political points in the process. Yet we heard little about the most critical issue facing municipali­ties: jobs.

Earlier this year, Statistics SA revealed that 5.7m people actively searching for jobs are unable to find one. That is 500,000 people more than last year.

It’s not surprising: our cities are battling to juggle the rapid increase in SA’s working-age population (now 36.4m people), coupled with the mass migration of rural population­s to urban areas.

To satisfy this hunger for jobs, we can’t simply look to our first-tier cities — Johannesbu­rg, Cape Town and Durban. Secondary cities have to come to the party. These include Pietermari­tzburg, Tlokwe (Potchefstr­oom) and Polokwane, which have to find ways to reinvent themselves if they are to compete for investment. But can smaller cities do this? For a start, they need to isolate their competitiv­e advantage, and develop it. A “jack-of-alltrades” approach won’t work. If a municipali­ty’s strength is its ports, technology, or manufactur­ing edge, it must double down on this.

A recent World Bank report, “Competitiv­e Cities for Jobs & Growth: What, Who and How”, confirms that all the cities that were truly globally competitiv­e focused on their strengths.

Take Tlokwe. This city in the North West can use its excellent academic facilities to create a sophistica­ted knowledge-based economy and position itself as a research and innovation hub. It could attract knowledge workers and develop industries that complement its core strengths.

Tlokwe’s proximity to Johannesbu­rg allows it to develop new travel and tourism products and then market these to the country’s largest market.

Whether it’s manufactur­ing or intellectu­al capital, cities must look deep within themselves to determine their strengths.

They need to think like businesses and adapt accordingl­y.

Of course, you need leaders who can cut through the politics and bureaucrac­y to maximise the potential of their cities for the people who live there. They have to focus on the long-term benefits beyond their five-year terms and resist populist pressures in order to achieve sustainabl­e growth.

Take the Gautrain, one of Gauteng’s biggest success stories. Former Gauteng premier Mbhazima Shilowa mooted the idea years before the first soil was turned. Today, it’s a world-class speed train service.

Second-tier cities also need to have solid and transparen­t economic data, which provides a compelling story for investors.

Cities that provide businesses with sharp, concise informatio­n about factors such as economic performanc­e, wellbeing of the population and where start-ups are located will be the ones that attract investment.

They also have to position themselves as aspiration­al destinatio­ns, where people want to live and work. As it stands, South Africans who relocate typically choose Johannesbu­rg, Durban or Cape Town. So what are cities like Nelson Mandela Bay (Port Elizabeth) and Mangaung (Bloemfonte­in) doing to harness these people?

When young people choose a city where they see a future for themselves, they are two to three times more likely to stay. Companies also want to invest in cities with a younger workforce.

Johannesbu­rg’s Newtown is a prime example of how to regenerate an inner city, providing a canvas for young South Africans to live, socialise and shop.

It’s easy to see why. A typical 25-year-old isn’t ready for a staid house in the suburbs. He or she wants vibrant central areas: green spaces, river walks, downtown boulevards and art districts in modern city renewal projects.

Only in that way will SA’s forgotten cities put themselves back on the agenda.

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