EKURHULENI Institute of Higher Learning 2017 - City of Ekurhuleni
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EKURHULENI INSTITUTE OF HIGHER LEARNING – Provisional Document
0
EKURHULENI
Institute of Higher Learning
Business Case – Draft Report
2017
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress TABLE OF CONTENTS SECTION 1: OVERVIEW OF THE EKURHULENI INSTITUTE OF HIGHER LEARNING ............. 4 1.1 INTRODUCTION ..................................................................................................................... 4 1.2 DESCRIPTION OF THE PROPOSED EKURHULENI INSTITUTE OF HIGHER LEARNING 4 1.3 VISION AND MISSION OF THE EKURHULENI INSTITUTE OF HIGHER LEARNING ........ 9 1.4 OBJECTIVES OF THE EKURHULENI INSTITUTE OF HIGHER LEARNING ....................... 9 SECTION 2: TARGET MARKET ANALYSIS ................................................................................ 11 2.1 INTRODUCTION ................................................................................................................... 11 2.2 SOCIO-ECONOMIC DYNAMICS AND CHARACTERISTICS .............................................. 11 2.3 EDUCATION DYNAMICS AND CHARACTERISTICS ......................................................... 12 2.4 ECONOMIC DYNAMICS AND CHARACTERISTICS........................................................... 13 2.5 SKILLS DYNAMICS AND CHARACTERISTICS .................................................................. 15 SECTION 3: COMPETITOR ANALYSIS AND SUPPLY ............................................................... 21 3.1 INTRODUCTION ................................................................................................................... 21 3.2 COMPETITOR DISTRIBUTION AND SIZE .......................................................................... 21 3.3 COMPETITOR OFFERINGS ................................................................................................ 25 3.4 COMPETITOR EMPLOYMENT AND REVENUE ................................................................. 34 SECTION 4: DEMAND PROFILING .............................................................................................. 36 4.1 INTRODUCTION ................................................................................................................... 36 4.2 STUDENT MARKET POTENTIAL ........................................................................................ 36 4.3 SPACE NORMS .................................................................................................................... 37 4.4 SPACE POTENTIAL ............................................................................................................. 39 4.5 POTENTIAL LOCATION OPTIONS...................................................................................... 41 SECTION 5: LEGAL AND REGULATORY REQUIREMENTS ..................................................... 48 5.1 INTRODUCTION ................................................................................................................... 48 5.2 ACTS, REGULATIONS AND REQUIREMENTS .................................................................. 48 5.3 OTHER REQUIREMENTS.................................................................................................... 50 SECTION 6: OWNERSHIP AND FUNDING .................................................................................. 52 6.1 INTRODUCTION ................................................................................................................... 52 6.2 OWNERSHIP OPTIONS AND OPERATIONAL STRUCTURES .......................................... 52 6.3 COST IMPLICATIONS AND FUNDING ................................................................................ 56 SECTION 7: CONCLUSION .......................................................................................................... 63 ANNEXURE A: DETAILED SITE ASSESSMENTS ............................................................................. 74
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress LIST OF TABLES Table 1.1: Possible Types of Qualifications Offered by a Comprehensive Higher Education Institution 5 Table 1.2: Potential Academic Faculties and Departments .................................................................... 7 Table 2.1: Socio-Economic Dynamics and Characteristics .................................................................. 12 Table 2.2: Education Dynamics and Characteristics ............................................................................ 13 Table 2.3: List of Occupations in High Demand in South Africa ........................................................... 17 Table 3.1: Stand-Alone Universities per Municipality in the Gauteng Province .................................... 22 Table 3.2: University Offerings per CESM Category in the Gauteng Province .................................... 25 Table 3.3: Faculties and Departments per University of the Gauteng Province ................................... 31 Table 3.4: Distribution of Students per University in Gauteng and Main Field of Study ....................... 32 Table 4.1: Space Use Category Requirements for the Short (3 to 5 Years) and Long Term (30-Years) .............................................................................................................................................................. 39 Table 4.2: Space Requirements per Programme Classification Structure (Programmes and Sub- Programmes) for the Short (3 to 5 Years) and Long Term (30 Years) ................................................. 40 Table 4.3: Potential Site Selection Approach and Assumptions ........................................................... 43 Table 4.4: Potential Site Locations, Descriptions and Remarks ........................................................... 44 Table 4.5: Overall Score and Ranking of Potential Sites for Establishment of the Ekurhuleni Institute of Higher Learning ..................................................................................................................................... 46 Table 6.1: Description of Organisational Structure Elements for Public Higher Education Institutions 54 Table 6.2: Description of Organisational Structure Elements for Private Higher Education Institutions .............................................................................................................................................................. 55 Table 6.3: Total Building Cost Units and Rand Value for Space Requirements for the Short (3 to 5 Years) and Long-Term (30 Years) ........................................................................................................ 56 Table 6.4: Funding Sources for Public and Private Higher Education Institutions ............................... 59 Table 6.5: Estimated Revenue and Operational Costs for the Proposed Higher Education Institution - 2021 ...................................................................................................................................................... 60 Table 6.6: Estimated Revenue and Operational Costs for the Proposed Higher Education Institution - 2031 ...................................................................................................................................................... 61 Table 7.1: Target Market Summary ...................................................................................................... 65 Table 7.2: Stand-Alone Universities per Municipality in the Gauteng Province .................................... 67 Table 7.3: Distribution of Students per University in Gauteng and Main Field of Study ....................... 67 Table 7.4: Space Use Category Requirements for the Short (3 to 5 Years) and Long Term (30-Years) .............................................................................................................................................................. 68 Table 7.5: Potential Site Locations, Descriptions and Remarks ........................................................... 69 Table 7.6: Approximate Building Costs for the Proposed Higher Education Institution ........................ 72 Table 7.7: Estimated Revenue and Operational Costs for the Proposed Higher Education Institution - 2021 ...................................................................................................................................................... 73 Table 7.8: Estimated Revenue and Operational Costs for the Proposed Higher Education Institution - 2031 ...................................................................................................................................................... 73
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress LIST OF FIGURES Figure 2.1: Top 15 Occupations in Demand in South Africa................................................................. 16 Figure 2.2: Relative Shift in Employment per SIC Level 3 Economic Sectors (2010 – 2015) .............. 20 Figure 3.1: Full-Time and Part-Time Student Enrolments at Higher Education Institutions of the Gauteng Province ................................................................................................................................................ 22 Figure 3.2: Distribution of Enrolled Students per Major Field of Study at Universities in the Gauteng Province ................................................................................................................................................ 23 Figure 3.3: Number of Student Graduates for under-Graduate and Post-Graduate Studies for Universities of the Gauteng Province .................................................................................................... 24 Figure 3.4: Success Rates of Universities of the Gauteng Province .................................................... 24 Figure 3.5: Total Number of Staff Employed by Universities by Metropolitan Region .......................... 34 Figure 3.6: Income vs Expenditure for Universities per Metropolitan Municipality ............................... 34 Figure 3.7: Distribution of Income Generated by Universities in the Gauteng Province ...................... 35 Figure 4.1: Student Market Potential for the City of Ekurhuleni – 2021 - 2051 .................................... 36 Figure 4.2: Summary of Space Requirements per Programme Classification Structure (Programmes) for the Short and Long Term ................................................................................................................. 40 Figure 4.3: Attractiveness Potential - Demographic Bias ..................................................................... 47 Figure 4.4: Attractiveness Potential - Economic Orientation ................................................................ 47 LIST OF MAPS Map 2.1: Spatial Distribution of Population in the City of Ekurhuleni 11 Map 2.2: Distribution of Economic Activities in the Ekurhuleni Metropolitan Municipality 14 Map 3.1: Distribution of Universities and Satellite Campuses in the Gauteng Province 21 Map 4.1: Spatial Representation of Potential Site Locations in the Context of the City of Ekurhuleni 45 Map 7.1: Spatial Representation of Potential Site Locations in the Context of the City of Ekurhuleni 70 LIST OF DIAGRAMS Diagram 1.1: Departmental Stakeholder Objectives 10 Diagram 4.1: The Context of Location Considerations 42 Diagram 6.1: Ownership Models of Higher Education Institutions in South Africa 53 Diagram 6.2: Potential Organisational Structure of a Public Higher Education Institution 54 Diagram 6.3: Potential Organisation Structure of a Private Higher Education Institution 55 Diagram 7.1: Potential Organisational Structure of the Proposed Higher Education Institution 71
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
SECTION 1: OVERVIEW OF THE EKURHULENI INSTITUTE OF HIGHER LEARNING
1.1 INTRODUCTION
Higher education institutions (HEI) are a core component of economic growth and social change in any
given administrative area, be it, local, regional or national. HEI’s are seen as mechanisms that can
support and influence current and future economic objectives and outcomes, by generating outputs of
potential workforce participants that have a variety of skills and proficiencies that can assist local
economic structures to attain levels of diversification, competitiveness and knowledge transfer and
building. This specifically speaks to the idea of a knowledge economy, and the shift of major world
economies towards the stimulation, incorporation, and growth of these knowledge based systems to be
locally and internationally relevant role-players and participants.
Social change and the role HEI’s play in the scope and degree of this change, is also an important
factor which aligns itself to the progress and assimilation of community growth, livelihood development,
and general well-being of local communities. International experiences have identified that a shift in the
thinking and approach of local communities, that have attained higher education levels, towards
economic sustainability, family planning, and productivity are observed and positively contribute to the
overall potential of local communities.
To this degree, changes and influences can be observed in the metropolitan municipalities of South
Africa that have access to stand-alone universities and other HEIs. Higher skilled labour force levels,
greater economic production, higher household incomes and general better education levels are seen.
The Ekurhuleni context identifies that a degree of skilled labour and good education levels do exist, but
are lacking behind major metropolitan areas such as Johannesburg, the City of Tshwane and City of
Cape Town.
In line with the above mentioned, the City of Ekurhuleni (CoE), is the only metropolitan authority in
South Africa that does not have a stand-alone university (HEI), and has sought to conduct a market
analysis of the potential to establish an institution that would provide higher educational opportunities
in the city.
Alongside the market analysis completed, the following report provides details with regards to a
business case for a proposed institution.
The business case will provide information with regards to:
• An overview of the target market,
• An overview of competitors,
• The profiling of potential demand,
• Any legal and regulatory requirements, and
• Ownership and funding mechanisms.
1.2 DESCRIPTION OF THE PROPOSED EKURHULENI INSTITUTE OF HIGHER LEARNING
The Ekurhuleni Metropolitan Municipality is a major economic and social role-player within the context
of South Africa by means of its strong industrial characteristics and contribution to the national economy,
and the size and extent of the population that is contained within its administrative boundary.
The ever-changing context of economic growth and advancement, and the need of the economy for
sufficient skills to drive this growth, requires a higher education institution that can cultivate and support
skills development aimed at advancing economies and growing knowledge based information flows and
processing in a variety of fields and occupations.
The aim of the proposed Ekurhuleni Institute of Higher Learning should be to establish a
Comprehensive Higher Education Institution that is funded by a collaboration of public and private
entities. The core characteristic of a comprehensive HEI is that it provides a diverse set of academic
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
programmes that not only creates horizontal accessibility (variety of study programmes), but also
enables vertical access (numerous study programme entry points), thus emulating both conventional
and technology HEI’s. In the context of the CoE and its multi-dimensional economy and demography
with varying needs ranging from practical application to knowledge and information, a comprehensive
institution would be able to sufficiently address and align itself to the needs and requirements of not
only the local context, but the broader regional and national contexts.
To elaborate on the idea of a comprehensive HEI, the following goals and objectives of a
comprehensive HEI have been identified:
• Increased access, in particular, to career-focused programmes with prospective students able
to choose from a wider variety of programmes with different entry requirements,
• Improved articulation between the career-focused and general academic programmes, thus
facilitating student mobility between different programmes,
• Expanded opportunities for research and the strengthening and development of applied
research, and
• Enhanced capacity (because of the broader range of expertise and foci) to respond to the
social and economic needs of the region in general and of industry and civil society in particular.
The goals and objectives identified, in regards to comprehensive HEI’s, can further be articulated by
considering a number of characteristics that form and shape such an institution. These characteristics
have been identified as:
• Diversity: through the offering of a diverse range of academic programmes (vocational, a
career-focused, professional and general formative) of both conventional and technology HEI’s.
• Accessibility: through the opportunities created by a variety of entry and exit points.
• Student mobility: through developing strong vertical and horizontal articulation pathways.
• Responsiveness: through the development of a suite of educational programmes and
research foci appropriate to local, regional and national needs.
• Flexibility: through the strengthening of relationships with community, civic, government,
business, and industry partners for local and regional development.
The range of qualifications that can be provided by a comprehensive HEI are varied, as mentioned
previously, and aligns to various levels of skills, requirements, and focused careers (in line with the
National Qualifications Framework). The extent of qualifications also range between under-graduate
and post-graduate studies. In order to provide an outline of the types of qualifications that can be offered
by a comprehensive HEI, Table 1.1 outlines the qualification type and its characteristics.
Table 1.1: Possible Types of Qualifications Offered by a Comprehensive Higher Education
Institution
Duration of
Qualification Type Description
Study
Under-Graduate Programmes
This qualification usually signifies that you have attained
a basic level of higher education knowledge and
Certificate (Cert) competence in a particular field or occupation and are 1 Year
capable of applying such knowledge and competence in
an occupation or role in the workplace.
This qualification is primarily vocational, or industry
oriented. It provides you with the basic introductory 2 Years
knowledge, critical thinking skills and practical (Full-Time)
Higher Certificate (HCert) techniques in the chosen field of study. After obtaining 3 Years
the Higher Certificate, graduates may enrol for an (Part-Time)
Advanced Certificate or Diploma in similar or related
field.
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
Duration of
Qualification Type Description
Study
The Advanced Certificate provides you with a sound
knowledge base in a particular field or discipline and the
ability to apply the knowledge and skills gained to
particular career or professional contexts. This also 1 Year
National Higher Certificates equips you to undertake more specialised and intensive (Full-Time)
(NHCert) learning. Programmes leading to this qualification tend 2 Years
to have a strong vocational, professional or career focus (Part-Time)
and holders of this qualification are normally prepared
to enter a specific niche in the labour market. Advanced
Certificate programmes typically include simulated work
experience or integrated learning work.
A diploma aims to provide career-oriented, educational
training that will prepare you to deliver quality practice in
a specific field. A depth and specialisation of knowledge, 1 Year
together with practical skills and experience in the (Full-Time)
Diplomas (Dip)
workplace, enables successful students to enter a 2 Years
number of career paths. Vocational diploma (Part-Time)
programmes typically include simulated work
experience or integrated learning work.
The purpose of the National Professional Diploma in
Education (NPDE) is to provide under-qualified teachers
National Professional Diplomas the opportunity to upgrade and get full teacher status. It 2 to 3 Years
(NPD) is not a stand-alone qualification but provides an entry (Part-Time)
point to the Bachelor of Education degree and an exit
point from this degree before its completion.
3 Years
This qualification is primarily professional, vocational or
(Full-Time)
industry specific. The purpose of the diploma is to
4 Years
develop graduates who can demonstrate focused
(Part-Time)
knowledge and skills in a particular field. Vocational
National Diploma (NDip) National Diplomas typically include simulated work If succeeding a
experience or integrated learning work. After obtaining NHCert
the National Diploma, graduates may enrol for a 1 Year
(Full-Time)
Bachelor of Technology (BTech) degree in similar or 2 Years (Part-
related field. Time
General
Bachelor’s degrees refer to the initial or first degree 3 Years
qualifications in a specific field or discipline. This (Full-Time
qualification enables graduates to demonstrate 4-5 Years
Bachelor’s Degrees (B degrees) knowledge and skills required for entry into the labour (Part-Time
market, further professional training, postgraduate
studies, or professional practice in a wide range of Advanced
careers. 3-4 Years
Post-Graduate Programmes
The bachelor honours degree is the initial postgraduate
specialisation qualification, preparing students for
research-based postgraduate study. This qualification
typically follows a bachelor’s degree, and serves to 1 Year
Bachelor Honours Degree consolidate and deepen the student’s experience in a (Full-Time)
particular discipline, and to develop research capacity in
the methodology and techniques of that discipline. It
demands a high level of theoretical engagement and
intellectual independence.
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
Duration of
Qualification Type Description
Study
A postgraduate diploma serves to strengthen and
deepen the student’s knowledge in a particular
discipline or profession. The primary purpose of the
qualification is to enable working professionals to
undertake advanced reflection and development by 1 Year
Post-Graduate Diploma means of a systematic survey of current thinking, (Full-Time)
practice and research methods in an area of
specialisation. This qualification demands a high level of
theoretical engagement and intellectual independence.
The qualification may include conducting and reporting
research under supervision.
The primary purposes of a master’s degree are to
educate and train researchers who can contribute to the
development of knowledge at an advanced level, or
prepare graduates for advanced and specialised
professional employment. A master’s degree must have 1 Year
Master’s Degree (Coursework or a significant research component. A master’s degree (Full-Time)
Research Programmes) may be earned in either of two ways: i) by completing a 2 Years
single advanced research project, culminating in the (Part-Time)
production and acceptance of a thesis, or ii) by
successfully completing a coursework programme
requiring a high level of theoretical engagement and
intellectual independence and a research project.
The defining characteristic of a doctoral degree is that
the candidate is required to demonstrate high-level
research capability and make a significant and original
academic contribution at the frontiers of a discipline or 2 Years
Doctoral Degree field. The degree requires a candidate to undertake (Full-Time)
research at the most advanced academic level,
culminating in the production, defence and acceptance
of a thesis. The work must be of a quality to satisfy peer
review and merit publication.
Source: Demacon, 2017
The proposed institute of higher learning is also envisaged to provide academic programmes in a wide
variety fields and occupations. The business case will aim to provide an indication of some potential
core academic faculties and departments under which a number of academic programmes can be
identified and formulated. These faculties and departments were identified by considering changing
economic trends and requirements in the city, as well as by considering occupational and skills
requirements. These potential core academic faculties and departments are outlined in Table 1.2 below.
Table 1.2: Potential Academic Faculties and Departments
Academic Faculty Academic Department
• Finance and Business Services
• Public Management and Services
• Marketing, Logistics and Consumer Science
Economic and Management Sciences
• Entrepreneurship and Small Business
Management
• Tourism and Hospitality Services
• Electrical Engineering
• Industrial and Systems Engineering
Engineering and Built Environment • Mechanical and Aeronautical Engineering
• Civil Engineering
• Chemical Engineering
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
Academic Faculty Academic Department
• Metallurgical Engineering
• Computer Science
• Informatics
Information and Communication Technology
• Information Science
• Software and Systems Engineering
• Bio and Food Technology
Agricultural Science • Crop and Horticultural Science
• Microbiology
• Foundation phase education
Education • Senior phase education
• Education policy and management
• Health care sciences
Health Sciences
• Medicine
Skills Development Unit • Skills training for trades and artisanal occupations
The context of a comprehensive HEI (variety of academic qualifications at various levels), aligned with
the potential academic offerings outlined above can be used to concentrate and develop not only
professionals in a given occupation, but also trades and artisanal skills by enabling an environment in
which practical experience and influence can be generated. The academic faculties and departments
are aimed at building upon the current economic climate of the city, and developing, advancing,
modernising and expanding the capacity of the major economic driving forces, whilst also allowing for
entrepreneurial development. These elements will contribute towards a knowledge economy.
The incremental establishment of academic faculties and departments (with associated study
programmes) would be necessary so as to enable sufficient capacity generation and appropriate study
programme outlines and materials. The incremental establishment is also necessary to allow for
registration of academic programmes with the Department of Higher Education and Training. It would
thus also be relevant to consider the minimum admission requirements policy, classification
structure for formal degrees / diplomas / certificates policy, and the higher education
qualifications framework that the DHET have outlined. These policies assist in understanding
admission requirements, classification structures and degree of qualifications.
Possible academic programmes that could be considered as part of the initial operation of the proposed
institution could include:
• Diploma in Retail Business Management • Diploma in Hospitality management
• Bachelor of Commerce • National Diploma in Chemical Engineering /
Metallurgy / Materials
• Diploma in Information and Communication • National Diploma in Civil Engineering
Technology
• Bachelor of data science or science • National Diploma in Electrical Engineering
• Bachelor of education (foundation / intermediate / • National Diploma in Public Management
senior phase)
• Bachelor of Agricultural Science • Bachelor / Diploma in Entrepreneurship
Apart from providing educational services to the local and broader public and economy, the proposed
institution should also be engaged with research. Research should be focused on the context and ability
of the institution and should engage with the local economic environment of the city. Research can be
promoted through the establishment of institutes, centres, and units within the proposed institution
once sufficient capacity has been garnered through stable enrolments, and expanded academic
programmes. Research capacity can also be extended to enable collaboration with major companies
and firms and institutions such as the CSIR, National Research Foundation, and other HEI’s. Core focus
areas for research in the City of Ekurhuleni would likely be in line with information and communication
technology (such as networks, engineering and new technology), aeronautical development (such
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress as air transport, design, and new technology), and industrialised activity (such as manufacturing systems, approaches, new technology). 1.3 VISION AND MISSION OF THE EKURHULENI INSTITUTE OF HIGHER LEARNING The Ekurhuleni Institute of Higher Learning should provide a comprehensive approach to tertiary education by not only providing quality degrees and tertiary economic sector aligned programmes, but also qualifications that support the technical economic sectors so as to expand and generate knowledge and advancement of these sectors. A vision and mission statement are essential considerations that should be provided. The vision, or vision statement, of the proposed institution will function as a description of what the proposed institution would like to achieve, or accomplish, in the mid- or long-term future and will serve as a clear guide for the intended educational outcomes. The vision of the proposed Ekurhuleni Institute of Higher Learning can be identified as: E.g. To be a higher education institution that provides quality education and cutting edge solutions that allow for a multi-disciplinary approach and strong research innovation. Alongside the vision statement, a mission statement is required to identify the core purpose and focus of the proposed Ekurhuleni Institute of Higher Learning. A mission statement, unlike a vision statement, seeks to identify intended effect of the proposed institution’s vision and serves as a filter to identify important elements of the institution, identify the intended target market, and communicate the intended direction of the institution. The mission of the proposed Ekurhuleni Institute of Higher Learning can be identified as: E.g. Through the use of quality education, research and innovation, the institution will seek to become a skills development centre that integrates with local business and community so as to support, develop and encourage growth of the economy, its participants, and local communities. 1.4 OBJECTIVES OF THE EKURHULENI INSTITUTE OF HIGHER LEARNING The vision and mission statements provide the outlines to the cause (former) and effect (latter) of the proposed institution. In conjunction to these statements, clear objectives have to be defined that will inform the vision and mission statement. Stakeholders of the CoE identified a number of objectives for the proposed institution and how this institution should impact on the broader social and economic components of the city. These objectives are specifically aimed at identifying the core directives of the proposed institution in light of the views and thoughts of internal departments regarding its collaborative and impacting effects on issues and causalities that these departments seek to address. Diagram 1.1 shows the objectives of the proposed institution with regards to internal departmental stakeholders and their views on the range of impacts that a university could/should have in the CoE. From the diagram, it is clear that the objectives of the proposed HEI is to focus on cutting edge solutions that focus on generating innovation and creativity in the local economy, while also stimulating technological advancement to assist in the city’s competitive advantage. The institution is also seen as a platform from which economic transformation can be championed by engaging and supporting the second economy, assisting with entrepreneurial development and new business establishment, by generating linkages to the existing business community so as to allow for collaborative approaches to growing business and extending the capacity for change, proficiency and competitiveness of the local economy.
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
To support the change and growth of the economy, the institution is also seen as a core role-player in
creating multi-disciplinary approaches in the economy, meaning the supply and growth of skills and
the transformation of existing skills to remain relevant and economically productive.
Lastly, the institution is seen as a prospective element to allow for urban restructuring and change
by functioning as an anchor that can stimulate local development and encourage nodal development
that will generate a central core around which incorporation and sustainable city forms can be achieved.
Diagram 1.1: Departmental Stakeholder Objectives
Cutting Edge - Innovation and Creativity
Solutions - Technological Advancement
- Second Economy Support
- Entrepreneurship & New
Economic
Business
Transformation
- Collaboration and Linkages
with Business
Multi
- Skills Development &
Disciplinarary
Transformation
Approach
Built
- Restructuring the City Form Environment
Infuences
Source: Demacon Compilation from Internal Stakeholder Engagement, 2017EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress SECTION 2: TARGET MARKET ANALYSIS 2.1 INTRODUCTION In order to fully understand and assist in understanding the components that will be targeted by the proposed higher education institution, an overview of the target market is provided to outline the salient socio-economic, education and economic dynamics that shape and influence the potential market participant that could be captured by the proposed institution. The proposed institution will seek to capture participants that are: exiting secondary education in the CoE, surrounding municipalities, and the wider Gauteng City Region to pursue higher education; possible post-graduates that wish to further their education; and local businesses for education and training purposes, and business services purposes. The following sub-sections will outline the core characteristics of the demography and economy of the CoE. Detailed analysis of the target market had been concluded as part of the situational analysis, and reference can be made to this information. 2.2 SOCIO-ECONOMIC DYNAMICS AND CHARACTERISTICS The following sub-section will outline the current and historical growth trends of population and households in the CoE, explore the distribution and density of population throughout the city, and identify the income and living standard measure of households. 2.2.1 POPULATION DISTRIBUTION AND DENSITY The size of population and its dynamics are influenced by the spatial attributes of the population, meaning that the spatial distribution of population influences the urban form of a metropolitan region and also influences the accessibility that population have to a variety of services and functions. To show this information, Map 2.1 shows the spatial distribution of population throughout the CoE metropolitan region. Map 2.1: Spatial Distribution of Population in the City of Ekurhuleni Source: Demacon GIS, 2017
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
The map shows that population is primarily concentrated on the peripheries of the metropolitan area
and primarily form part of historical township areas. The core urban nodes and centres have a
significantly lower proportion of population. This distribution could influence the selection and
appropriate locality of an institution of higher learning in the metropolitan area.
2.2.2 POPULATION AND HOUSEHOLD GROWTH AND DYNAMICS
The dynamics that surround the demography of the CoE are indicators of the target market, and are
indicative of the potential that the proposed institution could have in attracting participants.
Population growth in the city is steadily decreasing, and this trend will most probably continue into the
future. Population growth between 2011 and 2016 was determined to be 1.2% and has caused the
population of Ekurhuleni to reach 3 379 104 people. Households and their growth have a different
trend, whereby household growth between decreased between 2001 and 2011, but increased after
2011. Household growth between 2011 and 2016 was determined to be 5.1% per year. During
2016, roughly 1 299 490 households were present in the City of Ekurhuleni.
The income status of many households in the city indicates that a fairly poor population resides in the
city. Roughly 17.7% of households do not have an annual income, and more than 50% of households
receive less than R 3 500 per month.
This disparity can be seen in the LSM levels of the city, whereby 48.6% of households form part of
LSM category 1 to 3. This classification indicates that these households have access to limited
disposable income and also do not have access to a wide variety of products that would improve the
livelihood of these residents.
The employment profile of the city indicates that, of the potentially economically active population,
approximately 70% are economically active (EAP). The employment profile further shows that of the
EAP, roughly 71% are employed and 29% are unemployed.
Table 2.1: Socio-Economic Dynamics and Characteristics
Variable Market Characteristic
Population and Household Dynamics • Population – 3 379 104
• Households – 1 299 490
Population and Household Growth (2011 – 2016) • Population Growth Rate – 1.2%
• Household Growth Rate – 5.1%
Income Profile • No Income – 17.1%
• Less than R3 500 per month – 50%
Employment Profile • 71% of EAP are employed
LSM Profile • LSM 1 – 3 – 48.6%
Source: Demacon, ex StatSA, 2017
2.3 EDUCATION DYNAMICS AND CHARACTERISTICS
The educational profile provides an overview of the highest level of education attained by individuals in
the CoE. The section also determines the extent of higher education achieved by persons who have
attained higher education. The purpose of this section is to provide insights into the level of personal
development of the population and the extent to which skills and its dynamics have been expanded in
the city.
2.3.1 HIGHEST LEVEL OF EDUCATION ATTAINED
Population in the CoE, for the highest education level attained, show that 4% of the total population
have not completed any schooling, while persons that have attained a matric certificate represent
35% of the population. Tertiary educated persons in the CoE make up 14.8% of the population,
which is slightly lower than the Gauteng Province average (18%) and higher than the National average
(12%).EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
In comparison to other metropolitan authorities in South Africa, the CoE has the fourth highest
concentration of tertiary educated persons within its boundaries, compared to cities such as
Tshwane (23.6%), Johannesburg (19.5%) and Cape Town (16.8%).
In the CoE, the most prominent tertiary education levels completed are a Certificate with Grade 12
(14%), a Diploma with Grade 12 (21.3%) and a Higher Diploma (19.8%). The attainment of
Bachelor’s degrees are also prominent for tertiary educated persons. In the CoE roughly 14.5% of
tertiary educated persons have a Bachelor’s Degree. The approximate same variance applies to other
metropolitan municipalities whereby a significant focus falls upon the attainment of a diploma with grade
12 and bachelor’s degrees.
The tertiary education levels attained by the population of the CoE can also be shown in regards to the
type of study field and qualification completed. Population of the CoE that attended a HEI and attained
a qualification from such an institution primarily attained a qualification in life sciences (24.9%),
architecture and the built environment (17.6%), Engineering (14.3%), and health professions and
related clinical sciences (9.1%). On average in other metropolitan areas in South Africa, persons
primarily obtained a qualification in life sciences (24.1%), architecture and the built environment
(16.6%), engineering (11.6%), and health professions and related clinical sciences (9.8%).
The least attained qualification in the CoE are qualifications in military science (0.3%), business,
economics and management sciences (0.7%), education (0.8%) and communication, journalism
and related studies (0.8%). For other metropolitan municipalities, on average, the least attained
qualifications are military science (0.5%), business, economics and management science (0.6%),
education (1.0%), law (1.0%), and philosophy, religion and theology (1.0%).
Table 2.2: Education Dynamics and Characteristics
Variable Market Characteristic
• No Schooling – 4%
Highest Education Level • Grade 12 – 35%
• Tertiary Education – 14.8%
• City of Tshwane - 23.6%
Tertiary Education per Metropolitan Municipality • City of Johannesburg – 19.5%
• City of Cape Town - 16.8%
• City of Ekurhuleni – 14.8%
• Diploma with Grade 12 – 21.3%
Highest Completed Tertiary Education Level • Higher Diploma – 19.8%
• Bachelor’s Degree – 14.5%
• Certificate with Grade 12 – 14%
• Life Sciences – 24.9%
• Architecture and the Built Environment – 17.6%
Qualification Type of Tertiary Educated Persons • Engineering – 14.3%
• Health Professionals and Related Clinical
Sciences – 9.1%
Source: Demacon, ex StatSA, 2017
2.4 ECONOMIC DYNAMICS AND CHARACTERISTICS
Information regarding the economic functioning, composition and structure of the CoE is an important
facet of the target market, as the businesses and industries that function in the economy of the city will
ultimately gain from skills development and increases, and can also gain from collaboration activities
with a higher education institution.
The section will this seek to identify the distribution, size, and profile of the economy of the CoE, and
also explore the skills range that currently operate in the city’s economy.
2.4.1 DISTRIBUTION OF ECONOMIC ACTIVITY
In order to determine the spatial distribution of economic activity throughout the CoE, Map 2.2 provides
an overview of the size of economic activity in the CoE based on meso zone information generated byEKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress the CSIR. The map will also indicate important economic nodes such as industrial areas and retail activities. Map 2.2: Distribution of Economic Activities in the Ekurhuleni Metropolitan Municipality Source: Demacon, GIS, 2017 Map 2.2 shows that the majority of economic contribution is concentrated in and around the Germiston, Boksburg, Kempton Park, Benoni, Alberton and Springs areas. Proportionally significant contributions can be seen in historical township areas such as Tembisa, Daveyton and Vosloorus, while limited activity can be observed in the rural areas of the metropolitan area. The concentration of these activities are largely centred upon primary industrial areas and major business nodes. 2.4.2 ECONOMIC SIZE AND PROFILE The most significant contribution to the CoE economy is provided by the Kempton Park (26.4%) geographic area. The Alberton (19.3%), Germiston (15.2%) and Benoni (14.7%) geographic areas are other important role-players in the local economy. The average annual economic growth of the city was 2.3% between 2006 and 2015 which is slightly lower than the growth rate of the province and higher than the national growth rate. The growth of the Ekurhuleni economy positions the city to contribute 23.4% to the provincial economy and just more than 8% to the national economy. The driving forces behind continued economic growth is the finance and business services and manufacturing sectors that contribute 22.5% and 18.1% respectively to the Ekurhuleni economy. Economic growth is also driven by the tertiary sector as a whole. The sector achieved economic growth of 3.3% between 2006 and 2015 of which the primary sub-sectors were the government services and financial services sectors. Besides economic growth and contribution, the city also contributes the second most to employment in the province (25%), which is largely concentrated in the Kempton Park and Alberton regions. A correlation exists between the growth of the economy and employment, whereby employment growth
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
in the city between 2006 and 2015 was 2.1%, and that this growth was largely driven by the tertiary
sector (3.0%), which was the only economic sector to attain positive employment growth.
Variable Market Characteristics
• Ekurhuleni contributes 23.4% to the economy of
the Gauteng Province
• Economic contributions to the total economy of
Ekurhuleni per geographic area:
Size of the Economy (2015)
• Kempton Park – 26.4%
• Alberton – 19.3%
• Germiston – 15.2%
• Benoni – 14.7%
Economic Growth Performance of the City of • The economy of Ekurhuleni grew, on average,
Ekurhuleni between 2006 and 2015 2.3% per year
• Finance & Business Services – 22.5%
Dominant Economic Sectors Contributions to the • Manufacturing – 18.1%
Ekurhuleni Economy • General Government Services – 17.3%
• Wholesale & Trade – 15.0%
Employment Contribution (2015) • Ekurhuleni contributes 25.0% to provincial
employment
Employment Growth Performance of the City of
• Employment in Ekurhuleni grew by 2.1% per year
Ekurhuleni between 2006 and 2015
• Skilled Labour – 26%
Skills Profile • Semi-Skilled Labour – 47%
• Low Skilled Labour – 27%
Source: Demacon, ex StatSA, 2017
2.5 SKILLS DYNAMICS AND CHARACTERISTICS
Skills are arguably, the most important output for a tertiary educational institution and impacts on the
role and function that an institution plays in servicing the local and broader community and
administrative region.
The demand for skills is an attribute generated by the economy and more specifically business and
industry. To investigate the potential demand for skills reference can be made to the broader and local
context which outlines potential demands. The investigation of skills dynamics and characteristics would
provide an intricate view of the potential demand for skills as well as determine the potential future
scope and influence of the proposed tertiary educational institution.
DEMAND FOR SKILLS
The South African Skills Demand and Supply1 report is a report that seeks to outline the extent of current
supply and demand for skills by understanding the complexities and intricacies around how supply and
demand interact. As part of the skills identification process, the report identified a number of occupations
in accordance to the Organising Framework for Occupations (OFO) that identifies the occupations for
which there are high demand in South Africa.
It should be noted that reference is made to occupational demands, and not specific skills sets.
Occupations require a number skills in order to complete tasks and perform operations within the scope
of an employer’s requirements, and thus it would be required to identify occupations that are in high
demand as these occupations would inform the types of offers that institutions of higher learning would
provide.
The report identified that managerial positions, especially those engaged in production and services
and administrative and commercial positions are of the highest demand. Skills with regards to
technicians, and associate professionals are in high demand, indicating that occupations such as
1
Skills Supply and Demand in South Africa, DHET, LIMP & HSRC, 2017EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
science and engineering associate professionals, health associate professionals, business and
administration associate professionals, legal, social, cultural and related associate
professionals, and information and communications technicians are required throughout the
country.
Other skills demand relates to agriculture, forestry, fishery and craft workers. In more detailed
terms, skills shortages involve occupations such as metal, machinery and related trades, electrical
and electronic trades workers, building and related trades workers, and food processing, wood
working, garment and other craft related trades workers.
Based on the outlined skills demands, Figure 2.1 shows the occupations in demand for South Africa.
The figure also only represents the 15 occupations with the highest demand.
For further elaboration, the DHET identified a list of the scarce skills and occupations in South Africa.
This list outlines the severity of the skills shortage and the occupational type for which the shortage
exists. To elaborate on this, Table 2.3 below provides an indication of the top occupations for which a
demand exists.
The South African Skills Demand and Supply Study (2016) 2 identified that the sectors and types of jobs
in which people work are slowly changing from a national perspective. The national indicators show that
the economy of the country is shifting towards service industry which implies the absence of low-wage
jobs in the manufacturing sector and a high dependence on the high-skilled financial services.
Based on the idea of a knowledge economy, where activities related to the use of information and/or
knowledge to improve, develop, invent or research new products, services, problems, etc., the
occupations outlined above relate to supporting these activities, especially the highest in demand
occupations.
Occupations such as: science and engineering professionals and associated professionals;
health professionals; business and associated professionals; social, cultural and related
associated professionals; and information and communications technicians, are occupations
considered to contribute towards knowledge economies. These occupations make use of information
and knowledge to either actively contribute to new innovations and products, or improve and expand
on existing innovations and products.
Figure 2.1: Top 15 Occupations in Demand in South Africa
18
16
14
12
10
(%)
8
6
4
2
0
Cleaners & helpers
Labourers
Administrative & commercial
Personal service workers
Science & engineering associate
Science & engineering
Metal, machinery & related
Health associate professionals
Other clerical support workers
Building & related trades workers
Information & communications
Business & administration
Stationary plant & machine
Food processing, wood working,
Legal, social, cultural & related
Drivers & mobile plant operators
Numerical & material recording
Electrical & electronic trades
Production & specialised services
associate professionals
garment & other creaft &…
associate professionals
professionals
trades workers
operators
professionals
managers
technicians
workers
managers
clerk
Source; Demacon ex Human Sciences Research Council and Labour Market Intelligence Partnership, 2017
2
Human Sciences Research Council, et al, Skills Supply and Demand in South Africa, 2016EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress Table 2.3: List of Occupations in High Demand in South Africa OFO Code Occupation 1 Managers 11 Chief Executives, Senior Officials and Legislators 111 Legislators and Senior Officials 112 Managing Directors and Chief Executives 12 Administrative and Commercial Managers 121 Business Services and Administration Managers 122 Sales, Marketing and Development Managers 13 Production and Specialised Services Managers 132 Manufacturing, Mining, Construction and Distribution Managers 133 Information and Communications Technology Service Managers 134 Professional Services Managers 14 Hospitality, Retail and Other Services Managers 142 Retail and Wholesale Trade Managers 2 Professionals 21 Physical, Mathematical and Engineering Science Professionals 211 Physical and Earth Science Professionals 212 Mathematicians, Actuaries and Statisticians 213 Life Science Professionals 214 Engineering Professionals (Excluding Electrotechnology) 215 Electrotechnology Engineers 216 Architects, Planners, Surveyors and Designers 22 Health Professionals 221 Medical Doctors 222 Nursing and Midwifery Professionals 224 Paramedical Practitioners 225 Veterinarians 226 Other Health Professionals 23 Teaching Professionals 231 University and Higher Education Teachers 232 Vocational Education Teachers 233 Secondary or Intermediate and Senior Education Teachers 234 Primary School and Early Childhood Teachers 235 Other Teaching Professionals 24 Business and Administration Professionals 241 Finance Professionals 242 Administration Professionals 243 Sales, Marketing and Public Relations Professionals 25 Information and Communications Technology Professionals 251 Software and Applications Developers and Analysts 252 Database and Network Professionals 26 Legal, Social and Cultural Professionals 261 Legal Professionals
EKURHULENI INSTITUTE OF HIGHER LEARNING – Business Case: Draft Report in Progress
OFO Code Occupation
262 Librarians, Archivists and Curators
263 Social and Religious Professionals
3 Technicians And Associate Professionals
31 Science and Engineering Associate Professionals
311 Physical and Engineering Science Technicians
312 Mining, Manufacturing and Construction Supervisors
313 Process Control Technicians
314 Life Science Technicians and Related Associate Professionals
315 Ship and Aircraft Controllers and Technicians
32 Health Associate Professionals
321 Medical and Pharmaceutical Technicians
322 Nursing Midwifery Associate Professionals
325 Other Health Associate Professionals
33 Business and Administration Associate Professionals
331 Financial and Mathematical Associate Professionals
332 Sales and Purchasing Agents and Brokers
333 Business Services Agents
335 Regulatory Government Associate Professionals
35 Information and Communications Technicians
Information and Communications Technology Operations and User Support
351
Technicians
4 Clerical Support Workers
42 Customer Services Clerks
422 Client Information Workers
43 Numerical and Material Recording Clerks
431 Numerical Clerks
5 Service and Sales Workers
53 Personal Care Workers
531 Child Care Workers and Teachers' Aides
532 Personal Care Workers in Health Services
54 Protective Services Workers
541 Protective Services Workers
6 Skilled Agricultural, Forestry, Fishery, Craft And Related Trades Workers
64 Building and Related Trades Workers
641 Building Frame and Related Trades Workers
642 Building Finishers and Related Trades Workers
643 Painters, Building Structure Cleaners and Related Trades Workers
65 Metal, Machinery and Related Trades Workers
651 Sheet and Structural Metal Workers, Moulders and Welders
652 Blacksmiths, Toolmakers and Related Trades Workers
653 Machinery Mechanics and Repairers
66 Handicraft and Printing Workers
661 Handicraft WorkersYou can also read
