Improve the business environment to unlock growth opportunities

The eco-system or business environment within which firms find themselves to a large extent, determines how easy or how difficult it is for an entrepreneur/firm to succeed and grow. A healthy business environment is essential for growth, employment creation, tax generation and poverty reduction. As a consequence, the public sector should respond favourably to opportunities to improve the business environment, especially if such improvements will lead directly to increased private sector investment.

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The Cape Chamber of Commerce and Industry is pushing for businesses to take charge of shaping a better future for their business eco-system, by cooperating smarter with other key role players who shape it.  The key concept is unlocking opportunities, which become possible when role players choose to work together.

In partnership with government and other development organisations, the Chamber aims to establish smarter annual dialogue processes - to identify better strategic options and to resolve the associated impediments to growth.

After researching the most successful economic regions of the world, for why some sectors, territories and countries grow, whereas others stagnate or decline, the German government developed a framework for systemic competitiveness. Systemic Competitiveness refers to the term “system” as a pattern of businesses, institutions, organisations and policies which are inter-linked through complex feedback mechanisms and which, taken together, create a coherent entity – an economic system

This framework introduces four (horizontal) levels of critical factors for analysis:

A stable macro-economic framework is a necessary but not sufficient condition for competitiveness and growth (3. macro-level); Companies’ performance in context of value chains (1. micro-level) also depends on the availability of specialised factors and supporting institutions (2. meso-level); It is essential to understand a society’s capacity to create a favourable environment for economic development (4. meta-level)

Measuring systemic competitiveness is arguably best done by The Global Competitiveness Index (GCI) framework.  The Global Competitiveness Index 4.0 explains over 81% of cross-country variation in income levels and 70% of cross-country variation in long-term growth.  (Source: GCI 2019, empirical study 2018 )

Good practice

by Mesopartner
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The term “systemic competitiveness” pops up in the discussion on economic development and industrialisation, though it is rarely explained what exactly it is supposed to mean. It usually refers, somewhat vaguely, to factors which influence individual companies’ efforts to become…
by World Economic Forum
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The Global Competitiveness Report series has since its first edition, aimed to prompt policy-makers beyond short term growth and to aim for long-run prosperity.
by WorldBank
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The Global Competitiveness Index 4.0 assesses the microeconomic and macroeconomic foundations of national competitiveness, which is defined as the set of institutions, policies, and factors that determine the level of pr...
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How governments, businesses, civil society and donors can use public private dialogue (PPD) to promote private sector development, open governance and poverty reduction. For good practice material, tools and lessons learnt.

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