SA improved dramatically in business efficiency from 38 last year to 30 this year. Infrastructure improved from 55 in 2008 to 54 in 2009 while economic efficiency deteriorated from 55 in 2008 to 56 in 2009.
In economic performance SA ranked high for its terms of trade index and cost of living index but low for its high unemployment rate especially for youth unemployment and long term unemployment.
In the competitiveness ranking area of government efficiency SA scored high for effective personal income tax rates and employee's social security contribution rate but ranked low in the areas of exchange rate stability and equal opportunity legislation that encourages economic development.
Despite SA improving its ranking this year it is clear many challenges remain, especially in light of the global recession.
According to Sello Mosai, executive manager of Knowledge Management and Research at Productivity SA, the biggest challenges will be protecting the poor and building capacity for long term growth by accelerating investment spending.
In addition he said the country needs to focus on sustaining employment growth and expanding training opportunities, addressing sectorial barriers to growth and investment and maintaining a sustainable debt level.
Internationally trading companies in manufacturing and services are key growth drivers he said, consequently it is vital to ensure that high productivity levels and growth are consistently attained and productivity initiatives at all levels are intensified.
Mosai also said more initiatives are required to enhance the skills and knowledge of the SA workforce through education and training and intensify R&D by government research institutions, universities and industries in order to develop new products and services for the local and global market.
At the company level there is a pressing need to increase the benchmarking of activities and best practices sharing and implement productivity and quality systems.
Mosai said this productivity drive needs to be supported with measures to increase productivity in the public sector. These include interventions to remedy constraints that negatively affect local economic growth, like infrastructure bottlenecks, a shortage of skilled labour, lack of ICT infrastructure, barriers to entry and limited new business investment.
