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A future feeding off hubs

A future feeding off hubs

Some 10 years ago I wrote "South Africa's Modern Post-Industrial Gentrification". In January I published an article entitled "The Successful Economy", in which I analysed the more successful aspects that keep carrying the SA economy even when challenged by so many daily headwinds.

I would like to take those thoughts further today by something that is not a new thought, but whose extent may become so in the decades ahead.

For we have fallen into the use of referring to hubs, or enclaves of modernity, meaning concentrations of localised high-skill, high productivity networks, often focused on a particular economic sub-sector, whose presence can favour a bigger region with yet more demand, output, jobs and economic momentum.

So we have heard about the oil industry hub developing in the Cape, serving West African needs, the Coega hub outside Port Elizabeth trying to draw large-scale industrial activity to its new world class harbour, the Richards Bay hub as terminal for large scale mining exports sourced in the interior and railed to its harbour, ditto for Saldanha.

Thinking slightly differently, but perhaps in bigger bites, the Western Cape within a radius of 70km of Cape Town has increasingly become a highly diversified, high technology, high creativity (which includes winemaking) entrepreneurial hub of world class.

Gauteng has its financial district, Kwazulu-Natal its Umhlanga Ridge corporate activity, Rustenburg used to be a platinum mining hub, and the Garden Route a 500km stretch of leisured retirement and entrepreneurial flair. More examples could be identified.

A very high percentage of the country's top performers and income earners, though ultimately small in number as per published income tax tables, can be found in high concentrations in or near these few hubs.

The rest of the country struggles on manfully, not least its Pretoria governmental hub, or diversified agriculture countrywide and manufacturing metropolis-wide, with mining in a struggle league of its own today.

That is today's economic profile, something that has slowly evolved and come into ever sharper focus these past 30 years.

But what about the coming decade (for those near retirement), the next three decades (if you are aged 30 today) or the next six decades (those being born now)?

Given the way the country is organised, and likely to remain for some time, the localised high-activity networks are likely to be ever more important in carrying the country forward.

This is where most entrepreneurial ability will be found, where the highly educated and skilled congregate, where capital can be mobilised, and where the modern urban and peri-urban infrastructure remains sophisticated and in working order (education, health, communication, air links) to support such high level economic activity.

Our economic concentrations will only become more concentrated, differentiating them from the much larger parts of the country not so endowed despite heroic government efforts to achieve differently.

But this may increasingly become only a minor part of our reality.

For the African continent as a whole is now very much in the grip of a major development effort whose momentum will still carry it for many decades, just as the 19th and 20th century marked the West and the 20th and 21st centuries marked and is marking Asia.

This Africa development story, however, will also be one of hubs and regional specialization, some already in focus and others yet to be born.

There are the multiple energy hubs, still focused on Nigeria, Gabon and Angola, but with Ghana,  Mozambique, Tanzania, Sudan (possibly Kenya and Somali and yes, probably the Karoo basin, too) about to join them. These energy hubs will demand very large supply services so far in short supply, with some of our west and east coast locations well positioned.

Another example are air transport hubs, of which Nairobi may be one example. Others may follow (and Johannesburg and/or Durban hoping to be the southern foci, but potentially a much bigger continental one).

Still coming are agricultural and manufacturing hubs. And these could far outshine anything seen so far, continentally reminding of America, Europe, Russia and China.

Industrial hubs could appear in East Africa (Kenya), north east Africa (Ethiopia), and West Africa (Nigeria, Ghana).

Agricultural heartlands could develop in Zambia, Congo Brazzaville, Ethiopia and other locations. The Congo could be a Central African source of water and hydro-electric power.

Such potential may be there, but its full exploitation dependent on far reaching political and institutional reforms making their blossoming possible.

South Africa might not only be the greatest financial hub for all these regions focused on Sandton (and Cape Town) but our local hubs may come to feed off all these rapidly developing greater Africa concentrations.

It could makes us Africa's most strategic, multi-faceted hub, the future London, New. York, Shanghai or Switzerland of the continent, if our localised hubs can develop further and morph into a regional one strong enough to stand its man.

About demand pull here there can be little doubt. Whether we will retain the supply push and expand it yet further to fully capitalize on these many opportunities should be interrogated far more rigorously.

The riches so to be earned may make up for what we forgo internally, however unnecessary, if we can maintain our supply advantages and competitiveness, never a given.