The Automotive Industry- South Africa’s premier employer

South Africa has one of highest unemployment rates in the world, sitting at a high of 26.5% at present. High levels of unemployment put pressure on the general efficiency of an economy, affecting even the employed. When there is diminutive money to spend, a cyclical economic problem forms. Businesses and employees are affected by a decline in the number of goods consumed.

Despite all these factors, South Africa is still considered one of the Top 10 most developed countries in Africa, it has an economy that is ranked the second largest in the African economies. This is mainly because South Africa has multiple industries contributing to its economy, the Automotive Industry being a giant amongst these.

The Automotive Industry contributes over R210bn in the South African annual GDP, placing over 660,000 jobs and R84.5bn in wages. It is largely based in the Eastern Cape, Gauteng, and Kwa-Zulu Natal.  Populaces in these provinces rely largely on this industry and its sub-industries, according to the AIEC’s report, it is estimated that each direct automotive job supports at least five other indirect jobs. The modern automotive industry in South Africa was launched in 1995 and has since continued to advance.

The financial responsibility for unemployed persons in South Africa falls largely on the government, with this realisation, the Government has put in place the Automotive Production and Development Program (APDP) which is designed to support and grow one of the country’s premier employers. The APDP hopes to achieve local production of 1.2 million vehicles annually by 2020 thus increasing employment opportunities.

The Automotive Supply Chain Competitiveness Initiative (ASCCI) was launched in 2013 as a measure to enhance localisation, production and supplier capabilities. Competition in this industry has significantly grown, more activity within an industry is always positive for the economy. However, global competition has also increased, thus creating difficult and challenging circumstances for the local Automotive Industry. Manufacturers are required to enhance quality, increase organisational efficiencies and drive innovative features into their products while keeping manufacturing costs minimal.

This prolific industry requires a wider source of investment, the Automotive Investment Scheme (AIS) has facilitated more public sector incentives purposed to develop and assist in the manufacturing of automotive components.

The Automotive Industry is a crucial financial contributor in the South African economy, it is responsible for a significant decrease in unemployment. Expectedly, the government has put immense drive and effort into the advancement and success of this industry, ensuring thrive and profitability. Undoubtedly the programs and initiatives put in place have contributed to the increasing growth of the local Automotive Industry.

Read more on the Automotive Industry SA

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Digital Darwinism, entrepreneurship and technology

Darwin wrote about natural selection and the need to evolve in order to survive. The same can be said for both digital technology and entrepreneurship. With ongoing technological advances playing a significant part in economic growth, entrepreneurs, if willing to adapt, can benefit significantly from an ever changing digital landscape.

At a recently hosted event on entrepreneurship, ACCA (The Association of Chartered Certified Accountants) along with leading industry panellist raised significant trends into the technology and digital tools that will help entrepreneurs succeed.

Based on the event’s discussion theme; digital technological evolution in business, ACCA used the event as an opportunity to present the report ‘Digital Darwinism: thriving in the face of technology change’. This report focuses on 10 key digital based technology trends that may have direct bearing on business ownership and entrepreneurship:

 

  1. Mobile: Anywhere, anytime access to broadband connectivity from a range of devices, wireless networks, operating systems and applications.
  2. Big data: The massive quantity and variety of structured and unstructured data from internet-connected systems, devices and physical objects.
  3. Artificial intelligence and robotics: The broad range of machines and computer systems that demonstrate limited characteristics of intelligence.
  4. Cyber security: Protection from new forms of cyber risk, attack, crime and terrorism caused by increased reliance on personal and professional digital devices and data.
  5. Educational: Trends and tools that are changing and enhancing educational achievements, developments, techniques and possibilities.
  6. Cloud: Internet-based technology resources – such as software applications, computing power and data storage – provided remotely as a service.
  7. Payment systems: New, evolving and emerging internet-enabled software applications, currencies, payment platforms, devices and services.
  8. Virtual and augmented reality: Technologies that use computer modelling to simulate, overlay and supplement reality and enable people to interact.
  9. Digital service delivery: New technologies used to provide online, interactive, self-service, business processes, software and services.
  10. Social: Technologies that support social interaction and are enabled by communications technology, such as the internet.

CHOOSING THE RIGHT TECHNOLOGY BY UNDERSTANDING YOUR CUSTOMERS

Notwithstanding the merits of the 10 digital trends outlined above, it is important to mention that entrepreneurs should be aware of their market, and choose the right technology for their business. There is no need to embrace all 10 technologies, or to over-engineer digital products, rather be selective and with the help of a clear business plan choose the right technology that can help move your business forward.

Knowing your customer’s needs and preferred technological platforms will help reduce the choice of technology you may need to engage with.

Understanding of your customers, market and your key performance indicators is as important as choosing the right technology that can help your business move forward.” – Zolani Ngange, Chief Executive Officer at NexBrill Capital

For further details on ACCA’s entrepreneurship initiatives and up and coming events, e-mail:  Nomsa.Nkomo@accaglobal.com

Visit http://bit.ly/2nY5cZv to read on ways to deal with technological impacts.

Reflecting on SDG’s in Relation to the WEF Resolutions

 

ACCA Blog WEF

World Economic Forum (WEF’s) theme for the year of “Mastering the 4th Industrial Revolution” presented some of the challenges that developing countries face, although opportunities of creating new markets, re-engineering on the existing business strategies seemed to be the focus. A shift in mind set and capacity building to support national plans stemmed up as an engine for building towards a positive socio – economic activity in the near future. The core of the conversations aligned directly and indirectly to the Paris agreement and the Sustainable Development Goals (SDG’s) of supporting responsible business practises, narrowing the gap between the developed and developing countries and “making the world a better place”.

Progress Review

As an emerging market, South Africa (SA) is currently not yielding the expected growth prospects. Progress has been uneven in whether it is in ensuring access to internet connection or in being innovative in the prevention of illnesses instead of treating diseases. Limitations to internet connectivity impede transfer of knowledge, business expansion and creation of small businesses – while the latter tends to decrease the rate of production and adversely having a ripple effect in the economic activity of the country. Entrepreneurship has been cited as the driver of change for the African economies. However, gender imparity, quality education, access to finance, data sharing, sound governance structures, bridging human capital and infrastructure gaps are the keys to unlocking the full realisation of a transformative, inclusive and sustainable economic growth path. SA has taken great strides in addressing gender equality and women empowerment in both corporate and public enterprises, but there is still some rhetoric that needs to be transformed into action. Authentic support thereof for entrepreneurship through industrialisation still needs to be re-invented.

With climate change revolutionising the way business is done, SA and Africa at large have an opportunity to turn the renewables market into a massive growth area. According to the World Bank “one investor characterized the renewable programme as the most successful public-private partnership in Africa in the last 20 years. Important lessons can be learned for both South Africa and other emerging markets contemplating investments in renewables and other critical infrastructure investments”. The role of regional infrastructure development is critical in building a continuing socio and economic development.

Like many of the developing countries SA has the world’s youngest population to train and develop in building agile and robust sustainable business and government strategies in the future.  With climate change threatening food security and exacerbating slow economic growth. The emergence of new technology, as in biotechnology can be further developed in building a resilient and sustainable agriculture. Each country has to consider the ethical issues that this new wave of technology also brings forth as it develops its policies and regulations.

Whilst the prime responsibility to deliver rests with the government, according to PwC 87% of SA businesses are aware and understand that company responsibility lies beyond profit and that its performance is interlinked to the triple bottom line. The accountancy profession has a critical role to play in supporting the building blocks of a

The Fourth Industrial Revolution: Tech Savvy Accountants

ACCA_Tech Savvy

The 2016 WEF in Davos sees leaders from across the world gathering to discuss pertinent issue that will shape the economic structure of the world. The theme of this year’s conference is “The Fourth Industrial Revolution”, referring to the advent of economy-changing technologies. Technology is changing the way business is conducted, one of the industries that has and will continue to change its methods of doing is the accountancy industry. There is a huge demand for tech-savvy accountants. Wesley Rashid explains the importance of technology for the modern accountant and how it can benefit both the profession and clients.

Why is it important for a modern accountant to be technologically aware and capable?

Love it or hate it, technology is ever changing and accountants are now expected to stay up to date with these advances in order to keep their clients happy. The ones that are capable are the ones that stay connected with their clients and adopt a proactive approach, the ones that stay retrospective – well, its time to pack up your calculator and pen.

How do you increase your technological competency?

I’m presuming most students are of the millennial generation, those who are used to using tech every day. Increase your competency by getting out there and attending meet ups, using social channels and surfing the web – there’s lots of information to digest online, even on Facebook and Twitter.

What specific doors can being tech savvy open for an accountant?

Technology makes accountancy practices as user-friendly for staff and clients as possible, reducing fixed costs in running the practice and a need for clients to see them as tech-friendly. So there are lots of opportunities for the tech-savvy accountant. Look at us – accountants for tech start ups using tech to offer real time financial analysis and support for tech start ups so they can make quick decisions and grow faster. This has a massive impact on client satisfaction.

Where and how do you see technology changing the accounting profession?

Accountants and tax professionals will become advisers and software specialists. Focus is on cloud and harnessing good data to provide clients with sound advice, and automate processes – thus giving you more time to add value to the client’s bottom line.

Is technology making accounting/accountants more innovative or the other way round?

Yes, the ability of using the right tech tools will create profitability for both the firm and the client. Drilling down to data, automating processes such as auto-population of tax and VAT returns and collaboration by use of cloud accounting packages can speed things up and leave the accountant open to spending time on what they do best.

Source: http://yourfuture.accaglobal.com/global/en/blog/in-demand-tech-savvy-accountants.html