Parallel economic universes, procurement and supply chain?

The title of this article may have misled the reader into thinking that this is a futuristic, science fiction discussion. Rather it is a look at the reality of South Africa’s current ‘two economic universes’, explored to by Clem Sunter, legendary futurist, strategist and visionary in a recent column (News 24).

More importantly it is also a look into how procurement and supply chain plays a part in this.

Sunter refers to the first universe as the formal part of the economy (U1), which is comprised of large to medium-sized business, government and trade unions. The second universe (U2) is made up of “small to micro business, experienced and new entrepreneurs alike, and social entrepreneurs”.

The United States is a hybrid of U1/U2, with a large impetus placed on entrepreneurship within the economy. However, is has evolved into a U1 economy because of socialist policies and barriers, says Sunter. The Far East and leading BRIC countries are seeing substantial economic growth through their U2 and U1 economies working in collaboration with one another.

What about South Africa? With these two economic universes so far apart, where does the growth and economic reality lie? In Sunter’s opinion Black Economic Empowerment has concentrated solely on changing ownership and management structures in the U1 universe. However, he does congratulate Anglo American for their Zimele programme that has successfully incorporated U2 into its supply chain.

Buzz words on the tongues of most supply chain and procurement professionals are preferential procurement and enterprise development. They are a must in our current economy, whether you consider them part of social responsibility, legislative compliance or economic sustainability.

The question is how? What are the most effective programmes? How do you integrate enterprise development into your preferential procurement strategy?

At Smart Procurement World 2012 (13-15 November), Clem Sunter will provide further unique insights into the latest global economic scenarios and the possibilities for South Africa. Some of the country’s top CPOs and Supply Chain Managers will also discuss, consider and benchmark the best ways for delivering on this mandate in the future.

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