PwC: South Africa Economic Outlook | March 2024
Productivity Potential Index: A new way of measuring countries’ productive competitiveness.
By PwC
Productivity Potential Index (PPI): A new way of measuring countries’ productive competitiveness.
We’re pleased to share our third South Africa Economic Outlook report for 2024 which looks at a new way of measuring countries’ productive competitiveness.
Productivity acts as a catalyst for economic growth and development, plays a crucial role in bolstering employment opportunities, and prepares economies to better absorb unforeseen/unplanned events and recover from economic downturns. For South Africa, a more productive economy could also mean higher incomes that directly elevate people's standards of living and quality of life.
Traditional productivity measures ignore many of the assets that determine an economy’s productive capacity. PwC’s new Productivity Potential Index (PPI) adopts a ‘multiple capitals’ approach to defining, modelling, and measuring productivity. It firstly encompasses the traditional inputs of human, physical, innovative and other intangible capital that underpin traditional productivity measures. The PPI also incorporates additional pillars for social, natural and institutional capital.
PwC’s estimates show that around 40% of South Africa’s productivity is determined by human capital, logistics and institutions. These three factors – currently amongst the country’s biggest economic challenges – are explored in this report. We also consider what the public sector can do to fix this, what the private sector can do to support the public sector, and what private companies can do to help themselves.
Key elements of this report include:
PwC’s Productivity Potential Index (PPI): A new way of looking at productivity.
Multiple capital pillars: Unpacking South Africa’s productivity drivers.
Labour and human capital: Educational systems need industry-supported curricula and teaching methods.
Infrastructure and physical capital: New models for port management create opportunities for private sector investment.
Public institutions: Quality governance increases service delivery and reduces corruption.
How PwC assists our clients with workforce upskilling, supply chain optimisation and safeguards against corruption.