Joburg has to succeed in demanding new context.

Posted On Monday, 04 November 2002 10:01 Published by
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Johannesburg risks losing its ranking as a ‘world city’; however, it still has many strengths and advantages, and remains South Africa’s only feasible candidate for world city status.

Johannesburg risks losing its ranking as a ‘world city’; however, it still has many strengths and advantages, and remains South Africa’s only feasible candidate for world city status.

These are among the key findings of CDE’s report on Johannesburg and its future, released in the city today.

The report notes that cities worldwide – including South African cities – have to operate in a demanding new environment. Rather than merely playing roles in their national economies, they now compete directly against one another in a ‘borderless’ global economy.

This does not happen indiscriminately; cities take their place at different levels in a global hierarchy, and regional centres still play important roles.

“Cities have become independent actors that must compete against one another for investment and capital in order to create opportunities for their citizens. Their success depends upon their ability to integrate themselves into global society as well as develop links with their hinterlands or regions,” says Ann Bernstein, CDE’s executive director.

Given this, globalisation poses serious threats to cities anywhere in the world whose managers have a ‘business as usual’ attitude. Thus CDE warns: ‘In this fast-moving environment, there can be no standing still. Cities that don’t take active steps to carve out a new local, regional, or global niche will decline.

‘However, cities can also hugely accelerate their development by astutely combining local dynamics and global forces. This is particularly true in respect of cities that build the appropriate infrastructure and amenities needed to attract high-level, value-added service industries, and the highly skilled personnel needed to run them.’

The urban theorist John Friedmann has classified Johannesburg as a secondary world city – the only city in Africa to attain world city status. More recently, however, he has suggested that this status has become doubtful.

According to the CDE report, successful world cities are:

·        desirable places to live in, thus attracting talented and skilled people;

·        rich in the high-quality support services major corporations and financial institutions require; and

·        well-connected, providing excellent communications systems as well as the most advanced airports, freeways, and rail links in the world.

When compared with other world cities, Johannesburg performs fairly well in terms of advanced support services, moderately well in terms of quality of life, and poorly in terms of connectivity. It will have to attend to these last two areas in particular if it is to maintain or improve its world city status.

Experts agree that cities wishing to succeed in this demanding new environment have to identify their competitive advantages, and exploit them as fully as possible.

Despite its problems, Johannesburg still has some remarkable attributes. It remains a hugely dynamic city in economic terms, leading the country in the crucial tertiary and quaternary sectors.

Bernstein says that while Johannesburg hampered by its restrictive telecommunications regime, it is still southern Africa’s most connected city, and its airports and freeway systems still eclipse those found anywhere else on the continent.

“Moreover,” she says, “unusually for a world city in a developing country, it is not being overwhelmed by its population; its influx of new migrants and natural population increase are both manageable.”

Summing up, the report states: ‘Johannesburg is the only South African candidate for world city status; a singular place in a continental or subcontinental context that is rich in business services, and provides a highly supportive environment for national and multinational corporate leadership. Its strengths in this regard include its mass of corporate headquarters and associated business services, its relatively low cost of living, its climate, and the prevalence of English.

‘However, its world city status is compromised by its ageing and increasingly congested road and other transport systems, its relatively uncompetitive IT infrastructure, its restricted skills pool, and – above all – its high levels of violent crime.’

________________________________

Did you know this about Johannesburg?

 

These facts have been extracted from the CDE report entitled Johannesburg: Africa's world city - a challenge to action, released in October 2002. They have been drawn from a number of sources, including background research papers produced for CDE, and the Johannesburg City Council's Joburg 2030 report. For references, see the full report.

 

DEMOGRAPHICS

*                Johannesburg's population of 2,83 million people increases to 3,6 million every day as people commute in from other areas to work and/or shop in the metropolis.

*                Johannesburg's population is predicted to reach 3 million by 2010 (slower than expected, due to HIV/AIDS and decreasing fertility).

*              The area in Johannesburg expected to show the greatest population growth by 2010 is Roodepoort, because of large numbers of people expected to move in from Soweto and surrounding areas.

*              About 24 000 young Africans aged 20--24 are expected to migrate to Johannesburg between 2000 and 2005 -- more than twice the number in any other race/age category (the next highest is Africans aged 15--19).

BUSINESS

*              Seventy four per cent of all national corporate headquarters are in Johannesburg.

*              In 2000 the headquarters of 60 per cent of South Africa's top 100 companies were in Johannesburg -- down from 65 per cent in 1994.

*              Gauteng houses 58,5 per cent of all national IT enterprises.

*              Some 60 per cent of all retail activity takes place in Johannesburg.

*              About 45 per cent of the country's ASATA travel agents and 40 per cent of the country's accountancy firms are based in Johannesburg.

*                Johannesburg generates 10 per cent of SADC's GDP.

*              The JSE is Africa's biggest stock exchange 11 times over. At the end of 1999 it was larger in terms of market capitalisation (in US$ terms) than the Mexican and Kuala Lumpur exchanges, and roughly the same size as those in Athens, Brussels, and Singapore.

·         In 2000-1 Johannesburg's budget of R8,8 billion was bigger than all but two national line departments: Safety and Security (R15,73 billion) and Defence (R13,8 billion).

 

*                DECENTRALISATION

*              In 1982, 9 per cent (about 350 000 square metres) of the city's total office space was in the suburbs. By 1997 suburban office space totalled 3,34 million square metres, double the CBD's 1,73 million square metres.

*              From 1993 to 1999, for every square metre of office space added in the CBD, 7,5 square metres were added in the suburbs.

*              In 1991, 8,8 percent of A-grade rentable office space in the city centre was not let. Ten years later, 21,4 per cent was not let, along with 32,1 per cent of B-grade office space. Sandton's vacancy rates were about 9 per cent.

*              By 1994 more than a quarter of South Africa's top 100 companies had moved their headquarters from the city centre to the suburbs.

*              By 2000 the headquarters of more than 75 per cent of South Africa's top construction companies and 14 of its top advertising companies were in the northern suburbs.

*              Some 33 per cent of registered banks in South Africa have their headquarters in Sandton, 43 per cent in other Johannesburg suburbs, and only 6 per cent in the CBD.

*              By April 2001, 500 of the city's 600 advocates had moved their offices from the city centre to chambers in Sandton.

*              Some 73 per cent of public accountancy firms in Johannesburg are now based in the suburbs, only 6 per cent in the CBD.

*              During the 1990s, office space in Midrand grew by nearly 50 per cent a year - more than 20 times faster than in the CBD, and even three times faster than in Sandton.

*                Attendance at the Johannesburg Art Gallery in Joubert Park has dropped by 75 per cent since the late 1980s.

 __________________________________________________________________________

Issued by:            Beachhead Media & Investor Relations (Lynette Lambert and Jennifer Cohen)

                        011 214 2400 / 084 580 2402/ 082 468 6469

On behalf of:             The Centre for Development and Enterprise

Further info:            Ann Bernstein, executive director, CDE  011 482 5140


Publisher: Beachhead Media & Investor Relations.
Source: The Centre for Development and Enterprise.

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