Green clusters: Boosting economic competitiveness in SA

The green economy has typically been associated with rapid technological advancement; fundamental changes in the design of products, processes and services and use of materials; and a shift in our understanding of the significance of resource flows. The legislation, policies and regulations governing big infrastructure sectors (such as energy, water and waste) have often struggled to accommodate and leverage the rapid innovation and evolution of solutions that drive a green economy.

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To navigate this nascent space, clustering and cluster collaboration can enable the enhanced competitiveness that emerges when business, government and academia work together in a facilitated and collaborative way. The competitiveness of clusters and the cluster model has been used successfully internationally over many decades. In SA, the trade, industry & competition department has also recognised how using clusters can increase the competitiveness of sectors.

Clusters can create the context in which to build trust between sector players, and unlock new mechanisms to enhance competitiveness and resilience. The green economy, in particular, lends itself to collaborative ecosystem-building approaches. Set in this system of rapidly changing technology, and the economics surrounding that technology, are commitments to social inclusion and greater equality.

SA is under severe economic and social pressure. To successfully navigate both legacy inequalities and the additional pressures of Covid-19, and to have a proper chance at “building back better”, we need to recognise the necessity of doing things differently. Top-down policy needs to meet bottom-up, pragmatic implementation and execution. 

There are several international examples of clusters successfully driving competitiveness in the green economy. One of these is the International Cleantech Network, a group of world-leading Cleantech clusters. This cluster has been working at the intersection of government, business, academia and civil society over the past 10 years.

GreenCape is the only African member of the Cleantech cluster. Together with its partners, GreenCape has helped remove barriers to the growth of SA’s green economy, unlocking R41bn in investment and creating about 19,000 jobs.

During the Covid-19 lockdown, the cluster worked with the EU, German federal ministry of the environment, nature conservation & nuclear safety and the Green Outcomes Fund to provide direct support to green SMMEs.

This is a good example of how the cluster approach has been leveraged to unlock financial support to contribute to the resilience and recovery of the types of SMMEs that will help SA “build back greener and better”.

Using the cluster approach to build trust, remove barriers and unlock jobs and investment has been recognised as a way to contribute to the regional economy in Mpumalanga. The Mpumalanga department of economic development & tourism, working with GreenCape and the international development finance community, will begin work to set up a green economy cluster in the province.

This cluster will focus on unlocking and unblocking economic opportunities in the green economy, making a contribution to regional economic diversification and job creation efforts. Clustering on a local scale to build competitiveness on a global scale is the way Mpumalanga plans to grow its green economy and develop a successful green cluster. 

This article is published in partnership with the Friedrich Naumann Foundation for Freedom.

This article was paid for by GreenCape.