Address to the Select Committee on Labour and Public Enterprises - Parliament 4th June 2003.

The Job Creation Blue Print© GWD 1984-2003

Complementing GEAR by providing growth & employment to the jobless.

(The Plan was developed by GWD with manufacturing input from the then Manufacturing Director of Ford Motor Company (1984) and later after Ford left SA, as manufacturing management consultant, the late Neville Cohen from Port Elizabeth. The socio-economic input was provided by Socio-economist, the Revd. Dale White of Wilgespruit)

South Africa is a two-tier society. Currently, GEAR only represents the first tier, which provides the macro-economy, where factories depend on high skills, precluding low-skilled labour. GEAR needs to find a way to incorporate a low skilled, second tier of industry, into its overall policy structure as this second tier encompasses the majority of South Africaís people, who are currently overlooked by GEAR.

To bring this second tier into GEAR, local manufacture must be developed to accommodate people who initially, are low skilled and semi-illiterate, where labour replaces capital, the engine of formal industry, but an engine that low skilled people cannot access.

Therefore, the Blue Print must be regarded as the catalytic means to generate a new socio-economic order to rectify Gearís failure to address societies second tier of low skilled, semi-literate people.

To develop the Blue Print process, it is necessary to first concentrate on the industries leading in labour retrenchment and find ways to compensate their labour shedding, which will accelerate in time. The automobile and steel industry, inline with GEARís Macro Economic Export framework, has severely affected NUMSAís (National Union of Metal Workers of SA), membership, which is declining rapidly. By starting with them, engineering can provide solutions to re-employ their rising retrenched, semi-skilled work force, to South Africaís benefit.

The plan would transfer these ex-workers, who have manufacturing experience, into the housing and classroom sector. There they will use their skills to help transfer new skills and supervise the MANUFACTURE of houses, classrooms, community buildings and their components at community level. The building products act as production catalysts; while IT systems rapidly transfer, further manufacturing skills, problem solutions and business knowledge, into communities. Through this systematized process, sustainable, worker owned factories, can develop.

Because of the geographical flexibility that satellites provide IT systems, it is possible to include rural Africa in the development of sustainable factory business. These rural factories can be coupled to organic, science-based farming, providing income while improving nutrition and health.

As far as factory sustainability is concerned, the development of South Africaís 1960ís auto industries local content programmes, provides the basis for providing factory sustainability, just as it provided the basis for governments current, successful automobile and component export policy. This is through economic product research and development, normally referred to as product engineering.

The manufacture of buildings will not provide the volume of jobs South Africa is looking for, but it will develop manufacturing literate people and communities. From this new second tier of manufacturing literate communities, the factories can become the powerhouse driving job creation on the African continent, through low capital, labour intensive, manufacturing processes, coupled to IT systems, market analysis and planned product engineering. This will provide new products for these factories to manufacture and supply markets.

These ideas cannot be implemented without developing a pilot to first resolve physical, social and economic aspects away from the market place. Only once these aspects are resolved and properly packaged in a replicable plan, can the solution be replicated into South African communities and then into the rest of Africa.

Contrasting the organized and disciplined, pilot Blue Print approach to when Henry Fordís automobiles were first manufactured, the advent of cars caused chaos in the socio-economic environment, as it attempted to adjust to the new infrastructure that automobiles demanded. These were in the form of refineries, roads, petrol stations, skilled repair facilities and financial support systems, which were not available.

A Pilot development of the Job Creation Blue Print will minimize social chaos by providing a practical, tested plan to develop and integrate worker-owned factories into communities. This Pilot will be discusses towards the end of this presentation.

The Origins of the Job Creation Blue Print provides the engineering reason behind GEARís failure to provide growth, employment and redistribution to low skilled communities, as the BP is partially the result of an address by an Executive Engineer, Ford USA- Product Research & Development, to the EP Engineering Society in 1968.

He stated that around 2050, the Worldís automobile assembly lines would be automated and free of labour, citing the continual haggling between labour and management as the reason for planning this action. By the early 1960ís, US auto manufacturers R&D departments had already formulated long-term strategies to eliminate disruptive labour from their assembly lines. With the advent of production robots and rapid advances in computers, this date is closer to 2020.

Because of this engineered assault on labour, in recent times NUMSA has lost over 250 000 skilled jobs to machines and has not been able to counter these losses. During this period however, engineering departments in the developed world, continue working towards automating factories with increasing success.

GEAR failed to provide growth, employment and redistribution as it could not provide an alternative to this engineered plan to remove labour from factories. With the advent of robots and computers, this plan has spread into all aspects of business, causing even greater job losses. These losses will continue to accelerate, as the majority at the 1998 Job Summit and the 2003 Growth and Development Summit, are not experience in engineering R&D and cannot provide an alternative engineering plan to the one currently destroying jobs.

Engineering predicts that around 2020, Numsa will cease to exist in automobile plants. About fifteen years later, most other consumer production plants and steelworks will follow and by then, Numsa will no longer have working members. The Mine Workers Unions will follow Numsa around 2060, as mines become fully automated. They like Numsa will cease to exist before the end of the 21st Century.

Therefore, it should be obvious that before joblessness can be addressed on large scales, it is necessary to develop a counter-engineering plan, to offset the negative effect of the engineering plan to automate labour and now business. In this development, universities and technikons will team up with the private sector, government and labour, with engineering collectively providing the initial leadership until the Blue Print is economically functional, from which business plans can be developed.

The counter plan, which the Job Creation Blue Print provides, uses similar ideas China used in their Township and Village Enterprises (TVEís). Freed from state control in 1984, they were guided in small-scale farming and labour intensive manufacture. They have grown at over 30% p.a. for twenty years and now provide employment to 129million people. (Ref Prof. R Vietor Ė Harvard Business School China Facing the 21st Century)

Once the physical aspects of the Blue Print are developed, business schools, churches and sociology departments will become involved in developing the business plan for national replication. This will provide the social integration, management and business systems.

This completed plan enables new policies to be formulated, projecting labour, instead of capital as the prime source of wealth creation. However, until this plan is developed, job losses will accelerate as engineers brush aside GEAR, Government, Business Leaders and Labour Unions and complete their tasks of destroying the large factory/mining-based trade unions.

Policy makers forgot that economic policy in industrial societies is the result of engineered solutions. The only way to counter negative effects of engineered solution is not through policy, but through other engineered solutions. In developing GEAR, they overlooked this essential point resulting in Governmentís inability to address poverty and joblessness.

Highlighting this further is the fact that the majority of people in South Africa and the rest of Africa are low skilled people, whereas economic policy provided by GEAR, to stimulate growth, employment and redistribution for this majority is focused around high skilled industry, requiring predominantly high skilled and well educated people.

As a result, all policy provided by government and Nedlac have failed the jobless majority. Whereas through a new, engineered framework, it will be possible to develop new policies for creating employment for Africaís low skilled people.

To prevent industrialized nations marginalizing Africa, Africa has to acknowledge the importance of GEAR and its capital intensive solutions to the continent, but at the same time has to develop its own low skilled, engineering business plans that complements GEAR and meets Africaís low skilled job requirement needs. These engineering plans must enable low skilled people to subordinate capital and allow their labour to become the prime source of wealth creation, while remaining competitive in the market place.

Manufactured houses are bankable assets from day one; they can assist in developing the economic base within a community and provide initial production capacity to kick-start this second tier of manufacturing. The manufacture of classrooms and community buildings will also ad financial value to this process. Numsaís retrenched semi-skilled worker force and the IT industry can bring this about rapidly and within a three to five years of development, this second tier, could easily deliver over 200thousand houses and a 100thousand classrooms and community buildings p.a. per single shift in South Africa alone.

Engineering can draw on and factor into the solution, African peoples ability for to collaborate, create community saving schemes, work hard physically and as a team, all in line with the concept of Ubuntu. The Mondragon experience in the Basque Province of Spain can become the role model of the Blue Print, as both are based on all of these points mentioned. Mondragon business plan is based on worker-ownership and emphasises the value of labour by placing it as the prime source of wealth creation. Fifty years later, Mondragon weathered the storms of globalisation and integration into the EU and is now Spainís 6th largest industry.

The Job Creation Blue Print is planned on similar lines to bring about this new development.

The Blue Print we are about to discuss provides a unique business approach similar to the Mondragon approach that develops jobs through worker-owned industry, within low skilled communities. Through this approach, wages and profits first circulate within and grow these communities, before dissipating into the greater community.

The Job Creation Blue Print focuses on peopleís work initiating wealth creation through labour intensive industry and provides systems, technologies and business plans to reverse the automation process.

It provides systematizes administration and management controls, similar in concept to Internet and ATM banking management control systems. These compensate technical and management deficiencies among low skilled, semi-literate people, enabling the business plan to be maintained, while workers are trained in new manufacturing business tasks, while working. These management systems, coupled to market understanding and product development (R&D), provide the industrial framework for developing worker owned, labour intensive industry nationally and is inline with the successful Mondragon Experience. In this industrial model, peopleís work transforms them out of poverty, to become economically active participants.

In providing inroads into joblessness through this techno-business plan, all communities require buildings, their components and food. These provide the ideal catalyst to kick-start worker-owned, labour intensive factories and at the same time increase food production nationally, enabling sustainable employment to be maintained in factories and farms through economic product planning, development and planned, systematized farming.

This idea will not adversely affect existing builders residing in communities, as they can become worker factory owners and upgraded with new manufacturing skills, to help develop sustainable industry in the community concerned.

Contrasting this, government has spent billions on brick built houses and other buildings, while providing no sustainable working communities from this effort, as National Housing Policy stipulates must happen. This is because brick construction skills have no use outside the building industry and cannot provide newly housed people with skills and industrial business sustainability, once the houses are built.

Therefore, the starter house industry reinforces poverty and Government has spent over R10Billion on this reinforcement. The same argument can be used for the provision of schools and community buildings. Government cannot be blamed for using inappropriate technology, as there are many other factors involved, resulting in local technology been rejected, as costly and inappropriate, in most developed countries.

 

By Developing the Blue Print, Communities would have a choice between:

Current brick building methods, which generally reinforce the poverty trap and leave communities joblessness once the building tasks are completed. OR

Manufacturing which can empower communities to overcome the poverty trap, enabling them to provide their own houses, schools and community buildings, thereby gaining the necessary skills, enable these factory communities to enter into other forms of manufacturing, once the building tasks are completed. This route also provides a way to offset job losses from the formal industry, as retrenched semi-skilled workers can be retrained to pass on manufacturing skills to factory communities.

On the agricultural side, it can be demonstrated that even a small back yard can keep a family properly fed and healthy, if they are provided with organic science based, small-scale farming and nutrition knowledge.

Therefore, the Blue Print is an engineered, three pronged attack on poverty, providing knowledge, enabling low skilled communities to develop sustainable business, food production and healthy eating habits.

We now deal with the mechanics of developing Worker-Owned, Labour Intensive Manufacturing, coupled to Systematized Farming and look at Engineering Solutions to Overcome Poverties Origins. These generally are, low skills and low literacy levels. Over the years, industrial systems and processes have been developed that rapidly upgrade low-skilled people in factories and these have been in use around the world for over fifty years.

These industrial systems address poverties origins through: -

Systematizing and graphically illustrating the manufacturing, farming and primary health care processes, by adapting systems and procedures borrowed from international automobile manufacturing process detailing.

Rapidly transferring production, farming and healthcare processes.

Providing knowledge and skills through remote management / problem solving IT systems, coupled to regional training centres and or technikons.

Product engineering, market understanding, training and manufacturing business development plans, providing economic products for factories to manufacture.

Organic science based farming plans and skills, as communities generally cannot afford fertilizers. This enables communities to be adequately fed, while surplus products can be sold to their benefit.

Primary healthcare knowledge, enabling people far from first world medical care to keep themselves healthy and have access to some first world treatment through telemedicine.

This may sound very complicated and far-fetched, but we can demonstrate that most of the above, is every day business in the automobile industry, from which we adapted the systems.

However, if this is still complicated, think of the B Print as a giant cooking recipe. These recipes provides illustrated production processes enabling low skilled communities to manufacture their houses, schools and community buildings; recipes to grow food for consumption and markets and other recipes which provide new products to manufacture, as well as primary healthcare also in recipe format.

Remember the "Recipe" to assemble a motorcar is no different to the recipe that is uses in the kitchen to bake a cake. If you can follow the recipe to bake a cake, you can also follow the recipe to assemble a car. The assembly of a manufactured house is far simpler than that of a car; therefore, all cooks can easily read and understand recipes on how to manufacture houses, schools and community buildings. As African women are usually the cooks, they will easily cope with manufacturing these building products.

All production, farming and healthcare knowledge can be converted into a recipe format and therefore there is no reason why Black African people should be deprived of information that can help them crate work and earn and free them from the poverty trap.

Summarizing: The Recipe Format of the Development Plan will: -

Empower communities with jobs and manufacturing business expertise.

Provide manufacturing catalysts to "kick-start" production in the factories.

Bring factories in line with acceptable manufacturing practices.

Compensate labour losses as industry capital intensifies production lines.

Sustain factory production through market related product development.

Teach factory communities good agricultural and nutrition practices.

Systematize rural primary healthcare and increase telemedicine portals.

The Mondragon Experience realised that encouraging SMEís within low skilled societies, required engineering intervention in the form of industrial business plans, product development (R&D), understanding product markets and manufacturing support, all elements of the Blue Print.

Mondragon, as previously mentioned, is Spainís the sixth largest industry and details are provided from our Web site

http://myweb.absamail.co.za/grevillew/index_files/Mondragon printout.zip.

Recently, Prof Richard Vietor from Harvard Business School provided GWD with details of another plan, which had grown business in China within its township and village communities at an average rate of 30% p.a. Now, 20years later, the plan has provided a phenomenal 129million jobs at community level. It too focused on increasing food production, nutrition and sustainable labour intensive industrial development, coupled to community savings in township and rural villages.

The Blue Print is identical to both plans regarding labour as the prime source of wealth creation. The BP also provides industrial business and farming plans to townships and rural villages, where labour subverts capital. This in turn, as Mondragon and China have demonstrated, provides growth in skills, wealth and assets, in poor communities through job creation.

If after twenty years China was able to develop tens of millions of jobs, through similar elements proposed in the BP. South Africa can mobilize is sophisticated engineering, business acumen, technikons and universities and at least do the same, while at the same time, the rest of Africa can mobilize this human labour intensive industry linked to Nepad.