• the need to accelerate the economic growth rate of the country in order to create more employment and reduce inequalities in our economy
• the needs and requirements of a well-functioning, modem economy
• South Africa's political economy, history of skewed economic development, current economic structure and position in the global economy
• the character of the South African state as a developmental and activist state
• the needs and responsibilities of South Africa's economic citizens
• the needs and expectations of the department's clients and stakeholders
• the dti's Integrated Manufacturing Strategy, government's Microeconomic Reform Strategy and the findings of government's Ten-Year Review
  

We have set ourselves, in 2004, a ten-year goal of contributing towards higher level of economic growth so as to create employment and reduce levels of inequality,

• And, we will seek to achieve this goal by fulfilling our mission to:
• Provide leadership to the South African economy through our understanding of the economy, knowledge of economic opportunities and potential, and anticipation of the future
• Act as a catalyst for the transformation and development of the economy
• Respond to the challenges and opportunities in the economy and society
• Provide a predictable, competitive, equitable and socially responsible environment for investment, enterprise and trade
  

Over the next three years, we will seek to achieve this goal by:

• Increasing the contribution of small enterprises to the economy.
• Significantly progress broad-based black economic empowerment.
• Increase the level of direct investment overall and in priority sectors.
• Increase market access opportunities for and export of South African goods and services.
• Contribute towards building skills, technology and Infrastructure platforms from which enterprises can benefit.
• Reposition the economy in higher value-added segments of value matrices in knowledge-driven manufacturing and services.
• Contribute towards providing accessible, transparent and efficient access to redress for economic citizens.
• Contribute towards the economic growth and development of the African continent within the Nepad framework.
• Contribute towards building a single economy that benefits all and bridging the divide between the first and second economies.
• Building an efficient, effective and accessible organisation to achieve these outcomes in a sustainable and economical manner.

These ten strategic objectives will be achieved through the collective effort of the dti's divisions and agencies that are linked through a value chain to generate public value for economic citizens and to deliver products and services for our clients and stakeholders. These products and services include policy, legislation and regulation, finance and incentives, information and advice, and partnerships. We will also achieve our objectives through the pursuit of a more targeted investment strategy; improved competitiveness of the economy, broadening the economic participation of previously disadvantaged individuals to the mainstream economy, and policy coherence.

In the 2005/6 financial-year, we will give momentum to the achievement of our strategic objectives by implementing a number of flagship projects.

An average annual budget of R3bn will be utilised and approximately 1000 employees deployed to implement the strategy over the next three years. We will keep track of our progress through a systematic reporting and measurement system and regular reviews will take place to ensure that we are on track.

Table of Contents

Introduction 5

Understanding the Strategic Context 7

Vision 2014 11

the dti's Mission 11

the dti's Strategic Objectives for 2004 to 2007 11

Core Products and Services to Achieve the Strategic Objectives 12

Implementing the Strategy 14

Resourcing the Strategy 35

Monitoring and Evaluation/ Reporting and Measurement 38

Putting It All Together - A Strategy Map 39


Introduction

Purpose of the document

This document sets out the dti's strategy for 2005 to 2007 and as such it represents a road map to systematically guide the department's actions for the next three years. The strategy sets out the dti's role in South Africa and attempts to provide an answer to the question of why the Government of South Africa has a department of trade and industry. The strategy outlines our vision for the future and how we intend to attain this vision. It sets out what we are going to do, why we have chosen to do these particular things, and how we will do them. The strategy represents our undertaking to our South Africa, to all economic citizens, our clients and stakeholders.

This strategy is the culmination of a process of strategy formulation and business planning that was introduced into the department in June 2003. This process is much more rigorous and in 2004 the process was extended to include the COTII agencies of the dti to promote a greater degree of strategic alignment within the department as well as strategic alignment between the department and the rest of government; and to ensure better responsiveness to the needs and expectations of our clients and stakeholders, and responsiveness to the needs of South Africa's economic citizens.

The thoroughness of the strategy and planning process ensured that there was an interrogation of our purpose as a department, of how we can generate public value and contribute to growth, employment and equity, and how best to marshal our resources. A disciplined process forced us to make choices about what to do and about what not to do.

The strategy and planning process, although difficult at times, has contributed to breaking down silos, identifying synergies, clarifying roles and responsibilities and aligning the Cotii agencies to the strategic objectives of the dti. It has provided the department with a common vision and purpose and a shared sense of direction, it has facilitated the appropriate allocation of resources and the alignment of strategy, budgets and establishments.

Relationship to other documents

This strategy is in many ways a refinement and an extension of its predecessors: the Medium-Term Strategy Framework for 2003 to 2006 and the Medium-Term Strategy Framework for 2002 to 2005. A consistency of approach is evident. The strategy also rests on various long-term strategies of the dti, in particular, the Integrated Manufacturing Strategy and the Broad-Based Black Economic Empowerment Strategy. It also draws on government's Microeconomic Reform Strategy.

The strategy is the foundation for the dti's Vote 32 in the Estimates of National Expenditure, the department's Medium-Term Expenditure Framework. It also provides the basis for the dti's Annual Workplace Skills Plan and Service Delivery Strategy.

This strategy document is accompanied by a set of three-year strategies developed for each of the dti's divisions, as well as annual business plans for each of the dti's business units


Approach taken to the document

This document is a fairly detailed overview of the dti's medium-term strategy for 2005 to 2008. It begins with an assessment of the economic context within which the dti functions: the economic challenges confronting South Africa at this time as well as significant progress made in the first ten years of democracy; the current structure of our economy, our position in the global economy, and the distorted patterns of economic and industrial development that have characterised our past; as well as the role of a developmental state, the challenge of distributed economic governance, and the requirements of a well-functioning economy. Also examined are the rights and duties of South Africa's economic citizens as well as the needs and expectations of the dti's clients and stakeholders.

On the basis of this assessment, the dti's vision for the future, its long-term goals, and its mission and purpose were formulated and are explained. The department’s medium-term objectives are outlined.

Considerable detail is provided about how the dti will achieve these goals: the organizational structure and institutional arrangements are described, the specific role of each of dti's divisions is outlined, and the allocation of resources to implement the strategy is described.

The document concludes by outlining how we will monitor our progress and impact.

Understanding the Strategic Context

the dti's strategy is based upon a set of assumptions about the South African economy:

• South Africa is an open economy and as such an international economic strategy is a critical component of the country's economic policy approach.
• South Africa's growth and development is intertwined with the growth and development of the African continent in general, and the southern African region in particular.
• The South African state has an activist and a responsive role to play in ensuring that economic growth and development benefits all South Africans.
• The linkages between economic growth and greater levels of employment and equity are not automatic and that the state has an important role in developing and strengthening these linkages.
• The state can leverage greater outcomes and impact through forging partnerships with other economic actors than it can by acting alone.
• An integrated, and increasingly advanced, manufacturing sector can leverage economic growth and development across the economy.
• As a relatively small and open economy, South Africa must grow the size of the market for its products and services through appropriate expansion of domestic demand, regional economic integration and NEPAD, and increasing market access opportunities in the global economy.
• Fair, competitive, and efficient markets for domestic and foreign enterprises and consumers are critical in providing a conducive environment for economic growth and development.
• Raising investment levels, skills levels, and technology diffusion throughout the economy are primary drivers of economic growth and the state has an important role in this regard.

• The South African economy is fractured and fragmented. Some elements of the economy are characterised by 'first-world', competitive enterprises with access to economic infrastructure and services, while others are marginalised and lack of access to infrastructure, basic services, and economic opportunities.
  
  

The requirements of a modern, well-functioning economy have also influenced the dti's strategy:

• Leadership and responsiveness by the state
• Policy certainty arising from an appropriate legislative framework
• A mature regulatory system
• Efficient, transparent, coherent and fair regulatory services
• Markets for its goods and services
• Incentives to overcome market failures
• Efficient platforms for competitiveness
• Access to redress for all economic citizens
• Access to information for all economic citizens
• Greater levels of equity

In pursuing these aims, there are a number of critical policy challenges confronting the dti over the medium term, including: introducing policy instruments that succeed in bridging the divide between the first and second economies for emerging entrepreneurs and historically disadvantaged persons and communities; providing enterprises with relevant support measures that strengthen their ability to compete in a global economy; implementing a more focused and targeted strategy to increase levels of direct investment in the economy; and continuing to promote the alignment of economic actors in the different spheres of government, in agencies and parastatals, and in the private sector, with government's Vision 2014. Over the coming three years, particular attention will be paid to harnessing the opportunities that arise from the 2010 FIFA World Cup, the massive infrastructure investment programme of government and government-owned enterprises, and the taxi recapitalisation, for small enterprise development, broad-based black economic empowerment, and investment promotion.

Government's Medium-Term Strategy Framework in the electoral mandate period (2004 to 2009) states that the central and main intervention required in the current period is to grow the economy in such a way that enables us to create sustainable livelihoods and eradicate poverty. This framework provides the broad parameters for the dti's strategic plan.

Over the MTEF period there are several programmes aimed at bridging the economic divide and broadening economic participation by historically disadvantaged people. These programmes include the establishment of the Apex Fund that will provide micro-finance to micro-enterprises and which will be operational before the 2005/06 financial year gets underway; the introduction of the Small Enterprise Development Agency to provide small enterprises around South Africa with a one-stop non-financial support service; the implementation of new policy and legislation to promote the development of cooperative enterprises; the continued implementation of the Broad- Based Black Economic Empowerment Strategy; and the introduction of a specific strategy aimed at the economic empowerment of women.

The capitalisation of the National Empowerment Fund will commence with an initial R400 million in the 2005/06 financial year, which will allow the Fund to expand the products and services launched in 2004. The strategy is to increase the number of enterprises in our economy by creating an enabling environment and reducing regulatory costs faced by small enterprises and by unleashing South Africa's entrepreneurial spirit. The dti will continue to explore innovative ways of delivering products and services to the economic citizens in partnership with business chambers and local government. In addition, implementation of a strategy to promote a more equitable geographic spread of productive and sustainable economic activity will commence in the latter part of the 2005/06 financial year. Furthermore, the department will continue its work to ensure that all economic citizens have access to information and redress (when needed), to encourage their more productive participation in the economy. It is expected that new Consumer Credit legislation will be implemented during 2005.

Competitiveness and competition

The competitiveness of many enterprises in the economy continues to be based on the traditional factors of cost and access to raw materials rather than on the new drivers of competitive advantage. Not enough enterprises have moved into more value-added niche markets. Furthermore, downstream value-adding beneficiation of raw materials is constrained by high input costs often arising from the anti-competitive pricing practices of monopolistic enterprises. An example is the practice of import parity pricing in the steel and chemicals sectors. The need to strengthen the capabilities of enterprises to compete on factors other than price will be a focus on the dti's work in the next three to five years. In this regard, the department will undertake reviews of all of its enterprise support measures and incentives for relevance, efficacy, and competitiveness compared to those offered by South Africa's competitors. In addition, an industrial policy framework that extends the work done on the Integrated Manufacturing Strategy, to include primary sectors and services will be developed and implemented. A critical element of this work will include the development of policy instruments to address import parity pricing as part of an agreement concluded with government's social partners at the Growth and Development Summit. Addressing anti-competitive behaviour and practices will be a focus area over the next three years. Specific work that will be undertaken includes a review of competition policy and the introduction of new consumer protection legislation into Parliament in 2005. This work is a critical element of ensuring that an adaptive and restructured economy is a reality by 2014.

A more targeted investment strategy

Investment levels in the economy remain below the 25 per cent of GDP benchmark required for a sustained acceleration in economic growth rates. Not only does the level and rate of investment in the economy need to increase, the type of investment that takes place needs to be more labour-absorbing if significant numbers of new jobs are to be created. Over the next three years, the dti will develop and implement a more targeted investment strategy that focuses on identifying and promoting specific investment opportunities in particular sectors, regions, and products, rather than a generic approach of marketing South Africa as an attractive investment destination. This will require a more coordinated approach to investment promotion by national, provincial and local government and achieving this will be a priority in the first year of the MTEF period. The investment strategy will be informed by the results of the World Bank's Investment Climate Survey of over 500 enterprises as well as an OECD review of South Africa's investment policy environment. The department's work to develop and implement customised sector programmes to unlock the potential of government's priority sectors will be given a higher priority and the work will continue in new growth sectors including aerospace and paper and pulp.

Policy coherence and alignment

the dti will continue to work to strengthen the Economic and Employment Cluster, promote co-operative governance around economic policy, and ensure the strategic alignment and performance of its many agencies. The department will leverage its partners and stakeholders in support of its objectives. The working relationship with social partners through Nedlac will be strengthened. In addition, the support provided for organised business, specifically with local business chambers will also be strengthened.

Vision 2014
the dti is working towards a transformed and adaptive economy that is characterized by a higher level of economic growth that generates employment and reduces levels of inequalities. The long-term, ten-year, goal of the dti is to generate growth, employment and equity.

the dti's mission

The purpose of the dti is to:

• Provide leadership to the SA economy through its understanding of the economy, its knowledge of economic opportunities and potential, and its anticipation of the future.
• Act as a catalyst for the transformation and development of the economy and respond to the challenges and opportunities of the economic citizens, in order to support the government's economic goals of growth, employment and equity.
• Respond to the challenges and opportunities in the economy and society.
• Provide a predictable, competitive, equitable and socially responsible environment for investment, enterprise and trade.
  

In June 2004 the Executive Board of the dti identified six strategic themes that that the department needed to take into consideration when formulating its strategic plan for the 2005 to 2008. The six strategic themes were:

• African economic development,
• Bridging the gap between the first and second economy and building a single economy that benefits all
• Investment
• Organisational design
• Organisational efficiency
• Improving service delivery

These key themes would focus the dti's strategic direction for the medium term, given its broad mandate, and inform the adjustments in the capability of the organisation, to match the identified strategic focus. Three strategic objectives were added, as a result, to the dti' set of seven objectives, to reflect the pursuit of these additional outcomes to be achieved in the medium term.

Over the next three years, the dti will pursue its long-term goal of growth, employment and equity by:

1. Increase the contribution of small enterprises to the economy.
2. Significantly progress broad-based black economic empowerment.
3. Increase the level of direct investment overall and in priority sectors.
4. Increase market access opportunities for and export of South African goods and services.
5. Contribute towards building skills, technology and infrastructure platforms from which enterprises can benefit.
6. Reposition the economy in higher value-added segments of value matrices in knowledge-driven manufacturing and services.
7. Contribute towards providing accessible, transparent and efficient access to redress for economic citizens.
8. Contribute towards the economic growth and development of the African continent within the Nepad framework.
9. Contribute towards building a single economy that benefits all and bridging the divide between the first and second economies.
10. Building an efficient, effective and accessible organisation to achieve these outcomes in a sustainable and economical manner.
    

Core Products and Services to Achieve the Strategic Objectives

the dti has a set of core products and services that it offers to its clients and stakeholders. It is through the delivery of these tangible outputs that the dti seeks to achieve its strategic objectives.

the dti will publish coherent, evidence-based policies that will provide certainty and predictability in the market place, as well as providing clear vision and leadership to the economy. In addition, the dti will publish research aimed at advancing our shared understanding of the economy and shaping future policy formulation. Policy advocacy is critical activity that the dti engages in to promote our policy positions and approach to the economy across the rest of government.

Legislation and regulation

Policy certainty is achieved when policy is given legislative force. Therefore, the dti will table legislation in Parliament to give effect to our policies, the dti will also publish regulations to provide guidance and details on various legislative matters, the dti will seek to provide an enabling regulatory framework that promotes ease of compliance and best practice corporate and consumer regulation.

the dti will finance programmes and projects directly or provide different forms of incentives and matching grants. Financing can also take the form of debt or equity financing through one of the development finance institutions belonging to the dti Group.

Information and advice

the dti will provide economic citizens, clients and stakeholders with relevant and timely information in a user-friendly and accessible manner. This includes information about the dti's policies and offerings, economic opportunities, as well as commentary and analysis about the real economy.

the dti will seek to leverage a wider impact than it can achieve alone through forging strategic partnerships with important stakeholders and role-players including other government structures, sectors, as well as specific enterprises.

Implementing the Strategy

Implementation philosophy

Four themes underpin our approach to the implementation of the dti's strategy; leadership and policy coherence; institutional alignment; organisational efficiency and efficacy, and accessibility.

In practice this approach to implementation means that the dti will seek to cooperate and collaborate with other departments, agencies and economic actors to achieve the alignment of activities upon which improved growth, employment and equity depends. Improved policy coherence and institutional alignment has the potential to improve the efficacy of policies, improve service delivery to economic citizens, and reduce the costs of service delivery and policy development by improving focus, reducing duplications and enabling all those involved in economic governance to make the optimal use of available knowledge, skills and capacity. The more that policies influencing growth, employment and equity are aligned the greater the likely impact of the dti's efforts. Therefore, the dti will continue to play a leading role in the Economic and Employment Cluster as well as continue its intergovernmental relations programme and the strategic alignment of the dti Group.

The dti's leadership role will involve developing and articulating our policies and encouraging other departments and agencies to align their outputs. We will also continue to build links with the business community and trade unions. Such a leadership role requires the dti to strengthen its communication, negotiating and influencing skills. We also need to improve our capacity to work with and understand other organisations.

Institutional alignment will be pursued through a greater clarity of purpose provided by this plan and supported by a culture of innovation and knowledge sharing in the department. We will continue to develop our medium-term thinking and understanding of the drivers of growth, employment and equity, and continue to develop our strategy and business planning process. We will investment in leadership and management development and, on an ongoing basis, clarify roles and responsibilities, thereby optimising our organisational design.

We will continuously strive to improve our efficiency and efficacy through business process re-engineering, innovation, and performance management. We will work towards integrating our corporate services within the dti Group to allow maximum resources to be allocated towards the achievement of our strategic objectives. Implementing an integrated or shared service delivery model within the dti group will support improved service delivery to our clients.

We will strive to make the dti accessible to all economic citizens wherever they may be and to generate greater awareness about the role that the dti plays as well as the products and services it has to offer economic citizens. We will continue to promote the dti brand and invest in channels to distribute our offerings to economic citizens in 'the second economy'.

the dti Value Chain

the dti is structured in a way that facilitates the achievement of its strategic objectives.

The department comprises of a number of divisions that focus on policy, service delivery or support services. These divisions are sub-divided into 26 business units or core work areas.

These divisions and business units are linked together in a value chain to generate public value for economic citizens. Each unit has a core set of outputs, or products and services, that it is responsible for delivering. It is the delivery of a combined set of outputs that will result in the realization of our objectives. The value chain also highlights the linkages and interdependencies between the different parts of the department and promotes the erosion of the silo mentality common in large multi-functional organizations like government departments. Ensuring the efficiency and the efficacy of this value chain is the responsibility of the department's Executive Board and the key tools utilized in this regard is our new strategy and business planning process, and monitoring and evaluation system.

In addition, the dti Group comprises of a range of public entities or agencies that have a specific mandate to fulfil. These agencies fall into three broad categories:

Development finance institutions including the Industrial Development Corporation, Khula Enterprise Finance (Pty) Ltd, National Empowerment Fund, Export Credit Insurance Corporation and the South African Micro Apex Fund, which was established in 2004/5 in response to the country's need for a micro-finance institution that would cater for the needs of the very poor.

Regulatory agencies including the Competition Commission and Competition Tribunal, the National Gambling Board and the National Lotteries Board, the Microfinance Regulatory Council (its functions will be subsumed by the introduction of the new Consumer Credit Regulator), the Companies and Intellectual Property Registration Office, the Estate Agency Affairs Board and the International Trade Administration Commission.

Specialised services agencies including small enterprise support agencies such as Ntsika and Namac (which were merged in 2004/5 financial year to form the Single Enterprise Development Agency, SEDA, which has the mandate of providing coordinated non-financial support for the small business sector), and standards, quality assurance, and metrology agencies including the South African Bureau of Standards, SANAS, and SAQI. The technology support agency Council for Scientific and Industrial Research was transferred to the Department of Science and Technology in the 2004/5 financial year.

Outputs to be delivered to implement the strategy

the dti will publish coherent, evidence-based policies that will provide certainty and predictability in the market place, as well as providing clear vision and leadership the economy. In the MTSF period several policies will be developed and published including a national export promotion strategy, targeted national investment strategy, an overarching African economic development strategy/a strategy to increase the levels of intra-African trade, cooperatives development strategy, Internet Gambling policy and an intellectual property and indigenous knowledge policy. Adjustments will be made to the Microeconomic Reform Strategy to take into account new policy issues that have emerged that were not explicitly dealt with in the original document.

We will continue to use policy advocacy to pursue our objectives and will participate in policy processes led by other government departments such as the development of a strategy to promote a more equitable geographic spread of sustainable productive economy activity and the overarching infrastructure strategy by the Presidency, .

Various research studies will be published including the second investment climate survey, and an impact Assessment of Competition Law, an impact assessment of the implementation of the Small business development strategy, Impact of Trade Liberalization on competition and consumer welfare) Impact of Intellectual Property on Trade and research reports on the nature and social impact of gambling, credit extension and the abuse of liquor.

In the MTSF period, the dti will review of the regulatory framework for Estate Agents and submit the amendments to parliament. The following amendments will also be submitted to parliament: the amendments to National Gambling Act (Horseracing), amendments to Lotteries Act (Distribution of Amendments to the Trade Marks Act and Design Act pursuant to the Ratification of the Hague and Madrid Systems), amendments to Counterfeit Goods Act and amendments to Companies Act. The amended IDZ regulations will also be published. A new Enterprise Development Bill that replaces the outdated Manufacturing Development Act will be assented. New Cooperatives Development legislation will be tabled in parliament during the next financial year.

A comprehensive review of competition policy will conduct in 2005/5, as competition issues has emerged in both the input s and priority sectors, and thus crosscutting intervention is required. The corporate law reform project will also be continued.

In the MTSF period, several preferential market access agreements will be pursued with important markets including a SACU - India and SACU-China trade agreement. Ongoing multilateral negotiations in the World Trade Organisation will impact, not only on market access, but also on the regulatory regime governing trade administration, services, competition policy, and possibly environmental regulation. Also, various economic cooperation and investment protection agreements will be concluded with other countries, especially other African states.

In the MTSF period, approximately one-third of the dti's budget will be used to provide financial support to enterprises through several programmes including the Small and Medium Manufacturing Development Programme, the Black Business Supplier Development Programme, the Skills Support Programme, and the Export Market and Investment Assistance scheme. Critical infrastructure projects will be financially supported such as the John Ross Highway in Richards Bay.

New incentive schemes will be launched including schemes to support cooperative enterprises and women-owned enterprises.

The successful Competitiveness Fund and Sector Partnership Fund have been evaluated and are expected to be continued with modifications.

The Apex fund will disburse its first loan in 2005/6, thus providing micro-loans to micro-enterprises addressing a gap in the financing provided by other development finance institutions and the private sector.

Other forms of financial support provided to enterprises include tax incentives through the Strategic Industrial Programme and export credit guarantees provided by the Export Credit Insurance Corporation. Funds have also been set aside for the taxi recapitalisation programme.

Additional financial support is available to enterprises through the Industrial Development Corporation, Khula, and the National Empowerment Fund.

the dti will provide economic citizens, clients and stakeholders with relevant and timely information in a user-friendly and accessible manner. This includes information about the dti's policies and offerings, economic opportunities, as well as commentary and analysis about the real economy.

the dti's marketing division will continue work to increase awareness and accessibility of relevant and user-friendly information to the dti's existing and potential customers through advertising campaigns, exhibitions and road-shows. A variety of high-quality publications will be produced and widely circulated to different client and stakeholder groups, the dti's policy journal, Sisebenza Sonke, is published in French as part of our African economic development plans. Pamphlets explaining the dti's products and services will continue to be published. Our customer care centre continues to be the first point of contact for clients and economic citizens.

In 2005, It is expected that hence the campaigns have reached their peak, the focus will be on consolidating the gains made and leveraging stakeholders and partners in support of the programme's objectives, which is to extend the reach to those economic citizens that are currently under-serviced through new and innovative distribution channels.

However, the provision of advice to clients on various matters such as investment opportunities, accessing export markets, starting a small enterprise, and accessing the dti's incentive programmes, will also continue.

the dti will seek to leverage a wider impact than it can achieve alone through forging strategic partnerships with important stakeholders and role-players including other government structures, sectors, as well as specific enterprises. In this regard, the dti has an extensive intergovernmental relations programme, takes a leading role in the Trade and Industry Chamber of Nedlac, and supports export councils. Over and above the interaction with social partners at Nedlac, the dti has established an industry forum for regular interaction with sector associations.

In the 2004 an assessment of the current stakeholders and intergovernmental relations was conducted so as to identify ways of improving these and making them more effective. Some of the key recommendations emerging from the study as areas of improvement include standardisation and coordination to address the problem of inconsistency and competency of interaction; improving efficiency of information sharing, consultation, and decision making, with increased emphasis on partnership - focused interactions, and the proposed systemisation of representation on external committees.

One of the most significant partnerships over the next three years is with the European Union (EU). The dti and the EU have developed a Sector-Wide Economic, Employment and Equity Programme in terms of which the dti will receive 50m Euros over the next three years to support the achievement of its strategic objectives.

The role of the dti's divisions in implementing the strategy

Each of the dti's divisions has forged a medium-term plan that outlines the contribution of that division to the achievement of the dti's strategic objectives. These detailed strategy documents are available on request; however, it is not possible to provide more than a brief high-level overview of each division's role in this document.

Programme 1: Administration

Purpose: Provide strategic leadership to the department and its agencies, and facilitate the successful implementation of the department's mandate. The mission of the Office of the Director General is particularly to contribute towards the effectiveness of the dti through being the strong centre of the department encouraging strategic alignment, policy coherence, and economic intelligence.

Whereas the mission of the Group Systems And Support Services division is to provide integrated business resource management solutions in support of the dti's objectives.

The Office of the Director General has four business units:

• Director-General Support Office
• Internal Audit
• External Research and Policy Coordination
• Strategic Services

The Group Systems And Support Services division has four business units

• Organisational Risk Management Support Services
• ICT Management Support
• Human Resources Services
• Financial managment

Programme 2: International Trade and Economic Development

Purpose: Develop trade and investment links with key economies globally and promote economic development, through negotiating preferential trade agreements, supporting a strong and equitable multilateral trading system, and fostering economic integration with the continent within the NE PAD framework; and to administer and facilitate international trade.

The International Trade and Economic Development division has three business units:

• International Trade Development
• African Economic Development

• International Trade Administration
  
  

Purpose: Provide leadership through advocacy, analysis and facilitation, to provide leadership in the development of policies and strategies that create an enabling environment for competitiveness, Equity and Enterprise Development.

The Enterprise and Industry Development division has three business units:

• Industrial Competitiveness

• Enterprise Development
• Equity and Empowerment

Purpose: Develop and implement coherent, predictable and transparent legislative and regulatory solutions that facilitate easy access to redress and efficient regulatory services for economic citizens.

The Consumer and Corporate Regulation has three business units:

• Policy and Legislation
• Regulatory Services
• Enforcement and Compliance
  
  

Programme 5: The Enterprise Organisation

Purpose: Efficient administration of enterprise support measures and incentives.

The Enterprise Organisation has two business units:

• Incentives Administration
• Division's strategic objectives

Programme 6: Trade and Investment South Africa

Purpose: Provide strategic vision and direction to key growth sectors in the economy, increase the level of direct investment flow, and develop South Africa's capacity to export to various markets.

The Trade and Investment South Africa has three business units:

• Customised Sector Programmes
• Export Development & Promotion
• Investment Promotion & Facilitation

Programme 7: Marketing

Purpose: Promote greater awareness of the department by effectively branding and packaging its products and services and ensure access to the department through efficient distribution channels.

The Marketing division has three business units:

• Brand Management
• Marketing Communication
• Marketing Distribution

The role of the dti's agencies in implementing the strategy

the dti has under its coordination the 19 public entities under its coordination. New capacity to centrally coordinate and manage this agency management function is now housed within the Office of the Director-General and should contribute to the efficiency of this function. Each of the agencies has forged a medium-term plan that outlines the contribution of that agency to the achievement of the dti's strategic objectives. These detailed strategy documents are available on request; however, it is not possible to provide more than a brief high-level overview of each agencies' role in this document.

Companies and Intellectual Property Registration Office

The Companies and Intellectual Property Registration Office (Cipro) is a recently established trading entity that receives income from the registration of companies, close corporations and intellectual property (patents, trademarks, copyright and designs).

Cipro’s aim in the is to facilitate economic participation through registration, maintaining and promotion of Intellectual Property Rights and Business Entities through a legal framework that provides protection and disclosure of information.

Competition Commission and Competition Tribunal

The Competition Commission and the Competition Tribunal are established in terms of the Competition Act (89 of 1998) and are responsible for promoting competitive market conditions through investigating and prosecuting anti-competitive activities, reviewing and approving mergers and exemption applications, conducting research, and disseminating information to businesses, consumers and other stakeholders.

The Competition and Commission aim is to prevent business practices that are anti-competitive and unfair to consumers; enhance consumer choices and lower process of goods and services; and assist all stakeholders in understanding the competitive process.

Export Credit Insurance Corporation

The Export Credit Insurance Corporation (ECIC) is a self-sustained, government-owned, national export agency, registered as an insurer underwriting bank loans, supplier credits and investment into South Africa. The ECIC was established on 2 July 2001 by the Export Credit and Foreign Investments Re-insurance Amendment Act (9 of 2001) with the brief to fill a gap in the market in the provision of medium- and long-term export credit insurance and investment guarantees on behalf of government.

The main outputs of the agency will encompass:

• providing insurance cover for capital projects abroad, mainly in the SADC region
• adding new exposure to the value of R2,1 billion
• issuing investment guarantees against political and transfer risks.

Industrial Development Corporation

The Industrial Development Corporation (IDC) is a government-owned development financing institution, which promotes entrepreneurship through building competitive industries and enterprises. The IDC remains one of the most important instruments for developing South Africa's economy to be viable and sustainable. The IDC's focus is on contributing to economic growth, industrial development and economic empowerment through its financing activities. The I DC has evolved from being a leading industrial player at national and regional levels to being the first South African Development Finance Institution to have its mandate extended to the rest of the African continent in support of Nepad.

The IDC's aim is to a self-financing national development finance institution whose primary objectives are to contribute to the generation of balanced, sustainable economic growth in Africa and to the economic empowerment of the South African population, thereby promoting the economic prosperity of all citizens. The IDC achieves this by promoting entrepreneurship through the building of competitive industries and enterprises based on sound business principles.

Khula Enterprise Finance Ltd

Khula was founded in 1996, and specialises in ensuring the enhanced availability of loan and equity capital to small, medium and micro-enterprises. Finance is made available by:

• offering loans, guarantees and seed funds to retail funding intermediaries in need of capital, risk-sharing and capacity
• offering guarantees and equity capital directly and indirectly to small, medium and micro-enterprises
• providing assistance and guidance on financing and opportunities.
  

Khula is registered as an insurer under the Insurance Amendment Act (49 of 1998), and is governed by the regulations of the Financial Services Board. Its credit guarantee arm undergoes an annual actuarial valuation as required by the Financial Services Board to determine the appropriate maximum gearing.

Micro Finance Regulatory Council

The Micro Finance Regulatory Council (MFRC) is an independent regulatory structure.

A legislative reform process that will result in new consumer credit legislation and a statutory regulator (National Credit Regulator) is currently under way. The new legislation was reviewed by Parliament in 2004. It is for this reason that the Department of Trade and Industry has funded the MFRC and will be expanding its funding to the institution to allow it to set up a new credit regulator. All functions regarding the monitoring of unregistered micro-lenders will also be done by the MRFC.

The functions of the NCR are defined in the National Credit Bill (sections 12 to 18 of the Bill as at 27 November 2004). The aim of the new credit regulator will be to register credit providers, credit bureaux and debt counselors; to monitor compliance with the National Credit Act and to ensure that prohibited conduct is prevented, or detected and prosecuted; to provide redress to consumers, or ensure that such redress is provided through alternative dispute resolution agencies; to monitor trends and perform research on the credit market, including access to credit and cost of credit, to disseminate such information, to implement appropriate strategies to ensure that the level of competitiveness in the credit market improves and that access to finance improves: and to advise the Minister on matters related to the credit market.

National Empowerment Fund

The National Empowerment Fund Trust (NEF) was created by the National Empowerment Fund Act (105 of 1998) to redress economic equality for historically disadvantaged persons and increase their participation in the economy. The promotion of ownership of income-generating assets by historically disadvantaged persons was identified as an important way to achieve this. Emanating from the Act, the NEF's broad mandate includes: providing historically disadvantaged individuals with the opportunity to own equity in private businesses; supporting historically disadvantaged business ventures; promoting understanding of equity ownership; providing historically disadvantaged individuals with the opportunity to own shares in government-owned commercial enterprises; and encouraging and promoting savings and investment.

The aim of the National Empowerment Fund is to be a catalyst of broad based Black Economic Empowerment in South Africa. We enable, develop, promote and implement innovative investment and transformation solutions to advance sustainable Black economic participation.

National Gambling Board

The National Gambling Board was established in terms of the National Gambling Act (33 of 1996) to exercise control over gambling, provide advice to the Minister, and promote uniform norms and standards across provinces. The aim of the National Gambling Board is to ensure uniformity, harmonisation and integrity of the gambling industry in South Africa, by enforcing compliance with all the relevant legislation.

National Lotteries Board

The National Lotteries Board (NLB) is established in terms of the National Lotteries Act (57 of 1997) and the Amendment Acts 10 of 2000 and 46 of 2001. The board monitors and enforces the implementation of the National Lottery, as well as the establishment of private lotteries and promotional competitions. In addition, the board manages the National Lotteries Distribution Trust Fund (NLDTF) and takes responsibility the distributing agencies.

The aim of the National Lotteries is to ensure that the national and other lotteries are run with the utmost integrity, that the interests of all players are protected, that the national lottery generates maximum revenues for good causes in a responsible way and that these revenues be disbursed expeditiously.

South African Bureau of Standards

The South African Bureau of Standards (SABS) administers the Standards Act (29 of 1993), promoting the use of standards and quality control in industry and commerce, and supervises trade metrology and units of measure. The bureau targets assistance towards small and emerging business through the South African Quality Institute, building awareness of quality principles and methodologies available in South Africa.

The aim of the South African Bureau of Standards is to be the provider of choice for conformity assessment services; certification; testing; training and consulting.

South African National Accreditation System

The South African National Accreditation System (SANAS) establishes laboratory, personnel and certification body accreditation in South Africa, and facilitates mutual recognition agreements with international accreditation organisations.

The aim of the South African National Accreditation System is to create an impartial and transparent mechanism for organisations to independently demonstrate their competence and facilitate the beneficial exchange of goods, services and knowledge and provide a service that is recognised as equitable to best international practice while reflecting the demographics of South Africa in all that we do.

South African Quality Institute

The South African Quality Institute's mission is to create awareness of quality, play a lead role in the establishment, maintenance and improvement of the National Quality System and to actively promote its realisation; facilitate integrated quality management systems for large, medium, small and micro businesses in support of national priorities; advance the theory and practice of quality in education, training and development; instil the value and importance of service quality in everyone and throughout enterprises and represent South African Quality in the region and broad.

South African Micro Apex Fund

The Apex Fund is being established in 2004/5 in response to the country's need for a micro-finance institution that would cater for the needs of the very poor. The Fund is in the process of being registered as a Pty (Ltd), that is an autonomous organization with government being its primary stakeholder. It will allow enterprises and particularly cooperatives wanting to engage in economic activity to borrow amounts from as little as R20 up to a maximum of RIO 000. The South African Micro-finance Apex Fund will be based on a Bangladesh model, which proved to be highly successful. However, the model will be adjusted to suit the South African situation.

Single Enterprise Development Agency

The Single Enterprise Development Agency (SEDA) was established as a result of the promulgation of the National Small Business Amendment Act (26 of 2003), with the aim of providing coordinated non-financial support for the small business sector.

SEDA resulted with the merger of the national small enterprise promotion agency Ntsika and National Manufacturing Advisory Centres (NAMAC). SEDA was launched in December 2005.

SEDA aims to implement small enterprises development support services and products through a national, integrated service delivery network in order to improve the contribution of small enterprises to the economy, employment and equity.

International Trade Administration Commission Of South Africa

The aim of the International Trade Administration Commission Of South Africa creating an enabling environment for fair trade through customs tariff amendments trade remedies, and import and export controls.

Estate Agency affairs Board

The mission of the Estate Agency Affairs Board is to regulate the environment in which the transactions between consumers and estate agents by building the capability of estate agents; protecting the interests of stakeholders; ensuring compliance of estate agents; and build consumer awareness.

Flagship Projects for the Financial Year 2005/6

The annual business plans of the dti contain a comprehensive list of outputs that will be delivered by the dti in the 2005/6 financial year.

the dti has identified a number of outputs contained in the business plans that we consider to be absolutely critical for the achievement of our strategic objectives. The delivery of these outputs in the first year of the medium-term strategy has been prioritised by designating these are flagship projects. Flagship projects will receive special attention from the dti's Executive Board to ensure that appropriate resources are allocated to the projects, the requisite skills and competencies are assembled in project teams, and progress is closely monitored. In each financial year another selection of projects will be prioritised and given elevated attention. This project management approach is one of the new ways of working that has been introduced to promote accelerated delivery of key projects. However, it should be noted that the many other outputs contained in business plans are still important, and will be systematically monitored.

The flagship projects for 2005/6 will be in the following areas:

• Improving incentive administration by designing and implementing an e-commerce system for incentives.
• Review of Competition Policy and addressing anti- competitive pricing structures. This will be done through assessing the impact of SA's competition policy five years after it was implemented. Further more negotiations with the private sector and other activities will continue to restrict the practice of import parity pricing.
• Implementation of sector strategies in priority sectors.
• Develop new legislation to improve protection for consumers for tabling at parliament.
• Implementation of a more targeted investment promotion strategy that targets priority sectors and projects.
• Improving access to finance for small and micro enterprises.
• Implementing a women empowerment strategy.
• Development of an African Economic Development Strategy.

Resourcing the strategy
People, money, facilities and knowledge are the four key resources available to the dti to implement its strategy. In the MTEF period the dti will seek to improve the alignment of its capability to effectively deliver the mix of outputs in pursuit of the desired outcomes the organisation wants to achieve in the economy.

People

the dti's most important resources are our people. Personnel costs amount to almost ten percent of our budget. We have a head count of 716 personnel and 1044 posts on our establishment. This is comprised of 16.9% senior managers, 43.72% middle managers and supervisory staff, and 39.38% administrative and lower-rank staff.

the dti has 72% black senior managers, 40% women senior managers and 1.1% people with disability.

In 2003 the dti implemented a critical skills project. The purpose of this project was to identify the critical competencies needed by each division in the dti to deliver on current and future core business initiatives (programmes of the dti). The information was used to identify glaring critical skill shortages and to develop learning programmes that will develop these required competencies to address the deficiencies.

In 2004 service providers were contracted to develop and implement accredited customised training programmes to address the actual needs particular to the dti in this respect. Management, leadership and business administration programmes such as the customised Beginners' Strategy course and the Mentoring and Coaching; as well as functional programmes such as the Foreign Economic Representatives training course were developed, accredited and implemented.

Other critical skill shortages that this project revealed across the board were in the areas of:

• Programme design
• Project management
• Monitoring and Evaluation
• Strategic thinking especially the lower levels of the organization
• Advanced Economics especially the lower levels of the organization.
• Institutional knowledge management.

In the current 2005/6 financial year the training programme portfolio will be extended to include more functional and managerial courses to address the above mentioned skills gap.

The critical skills project will also be extended in 2005 to include a comprehensive skills audit to ascertain the types of skills already existing within department.

The MTEF for the department provides for an appropriation to be voted upon by Parliament of:

As part of a larger project to realign the dti's capability to effectively deliver on its strategy, a recent budget review was conducted that revealed that those programmes that received the largest allocations were not the programmes that would have the greatest impact on our objectives. Over the MTEF period, the dti reprioritised its budget in line with the department's strategic priorities. The aim is to ensure a more equitable allocation of resources to those programmes that seek to bridge the economic divide and broaden economic participation with those programmes that seek to promote technology, innovation, and modernisation. It is these latter programmes that currently receive a larger proportion of the dti budget.

40.89% of the dti's budget takes the form of transfer payments to the agencies that comprise the dti Group. 31.6% of the budget is incentives and other grants to enterprises. Personnel expenditure accounts for almost 8.72 % percent of the dti's budget. The budget available for operations and professional services accounts for almost 12.1% percent of the dti budget, the dti will allocate 70% of this budget to black-and woman-owned service providers.

An analysis will be undertaken to determine the actual size of the dti Group's balance sheet, which includes the agency reserves, which can be redeployed into identified priority areas of the dti.

One of the key resources the dti has is the knowledge and experience about trade and industry that is has accumulated over time. Currently, this knowledge is not optimally managed.

Improved knowledge management systems were introduced in 2004, such as the Enterprise Content Management (ECM), which is the new industry standard term for electronic document and records management technologies. It is the category of software that helps you manage all of the unstructured information or content in an enterprise.

ECM furthermore, adds intelligence to content by creating categorisation schema, metadata, and tags that make search and retrieval faster and more efficient. It also manages the review, revision, and approval process for any piece of content according to user-defined business rules, often termed Business Process Management (BPM). It has inherent workflow and lifecycle management capabilities to help achieve this.

the dti purchased the Enterprise Content Management Solution (ECM), Documentum, in December 2003. Documentum will provide the dti the following functionality: Paper scanning and imaging; Forms capture and processing; Integrated Document Management (IDM): Web Content Management (WCM); Electronic Records Management; Digital asset management (DAM); and Work process and collaboration management (Workflow),

The deployment of the ECM solution in the dti will be according to different phases. The phases will address all of the functionality and capabilities of the ECM as follows:

• Phase 1 - Integrated Document Management and Records Management
• Second Phase - Business Process Automation
• Third Phase - Digital Asset Management and Collaboration

The dti moved to a custom-built campus as of June 2004. Many of the dti's agencies have also relocated onto the campus providing a one-stop service for clients.

In many ways, the campus is the embodiment of the dti's vision, mission, values and strategy. At the heart of the campus is the dti's undertaking to provide improved access to the department by economic citizens, to be a citizen-centred and responsive government department. The campus is a fully serviced, modem facility that will contribute significantly to efficiency and efficacy of the department. After less than a year of moving to the campus, the dti is already reaping the rewards of a shared service. An example of this is regarding internet usage cost reduction.

A cost comparison exercise was undertaken by analyzing the Internet costs of COTII organisations when situated at their previous premises. The combined total cost of organisations in their previous separate locations accumulated to a total expenditure of R 6,353,880.00 per annum

Based on the implementation of the Campus Shared Internet Infrastructure the dti as a group will realize a saving of R 2,021,880.00 per annum. In addition to this saving, the Internet infrastructure has also been improved with an additional 1,5 Mb/s of Internet bandwidth. Such an increase of bandwidth would have been estimated at an additional R 1,693,152.00 per annum. Therefore the projected realised saving of Internet Shared services can be estimated at R 3,715,032.00 per annum.

Reporting and Measurement, Monitoring and Evaluation

In 2004 the dti put in place the basic elements of an organisational performance management system and is currently in the process of building a more comprehensive system. This organisational performance management system includes the introduction of a new integrated reporting system that allows the dti to track progress on the implementation of Flagship projects, on a monthly basis, and track progress on the implementation of business plans, on a quarterly basis. This new reporting system would strengthen the monitoring of the delivery of outputs.

the dti has developed a basket of both quantitative and qualitative output and outcome measures-within a framework that links outputs with outcomes. This will enable the department to measure delivery of outputs and how they have translated into longer-term outcomes.

In 2004, the dti developed a selection of generic kpis for the five main output categories of the dti, namely policy, legislation and regulation, finance, partnerships, information and advice. Each business unit of the dti has selected and customised the appropriate selection of kpis according to their respective outputs and consequently, each business unit will be measured accordingly.

Also, as part of this measuring system, a comprehensive set of 56 key performance indicators has been developed to assess on an annual basis whether or not the dti is making progress in achieving its ten strategic objectives. The first annual assessment report is due to be published in April 2005. This report will give an indication of the extent to which the dti has achieved its three-year objectives, after a year of delivering aggregated interventions contributing to the achievement of the objectives.

The challenge that the dti and government as whole faces regarding measurement is the development of shared outcome indicators for economic growth, employment, SMME development, BEE, competitiveness, increased investment, HRD, access to finance and infrastructure. A single department cannot easily deliver many of the major objectives of government. However, an integrated measurement framework of shared programme outcomes will require stronger interdepartmental coordination.

In future, the dti will scope the need for programme management capabilities and systems within the department and investigate the redesign of programmes in the organisation as a precursory action to outlining the programme outcomes and attaching relevant performance indicators to them.

the dti is also considering the establishment of a organisational performance management office and an impact assessment unit in 2005/6, and is currently investigating best practices in monitoring and reporting of organisational performance management systems.

Putting It All Together - A Strategy Map for the dti

the dti's strategy for next three years can be illustrated in a strategy map. The strategy map summarises in a single picture this entire document. It shows how we use various resources or inputs to produce a set of outputs that result in specific economic outcomes that impact positively on growth, employment and equity.

Over the next three years, we will use an average annual budget of approximately R3bn, additional revenue generated from partnerships, as well as our infrastructure, knowledge and 1000 employees to deliver products and services to clients. These products and services include policies, legislation and regulation, finance, information and partnerships in the areas of enterprise and industry development, investment, export development and promotion, sector development, and consumer and corporate regulation. It is through the delivery of these outputs that we will increase the contribution of small enterprises to the economy, achieve broad-based black economic empowerment, increase investment levels, increase exports, become more competitive and move up the value-chain in manufacturing and services, and provide economic citizens with access to redress. By achieving these economic outcomes over the next three years, we believe that the dti will be making a significant contribution to accelerated economic growth, employment and equity over the next ten years.