2.1 The economy

The current state and prospects for the Johannesburg economy are set out in iGoli 2010 and do not require repeating in detail here. The need to deliver the required economic outcomes to achieve iGoli 2010 provides the most compelling rationale for the establishment of the JDA:

• The need to increase Johannesburg's economic growth rate to at least 5% per annum, compared to its average performance of 2% for the last 10 years
• The need to increase the employment growth rate to at least 4% each year to achieve low unemployment by 2010
• The need to boost per capita incomes from their current stagnant growth levels to an annual growth rate of at least 4% per annum

The JDA's project management capabilities and action-oriented approach locate it as both a 'deliverer of services' and 'facilitator of growth' as required under the iGoli 2010 Economic Development Agenda for Action.

2.2 Market Analysis

A traditional market dimension (for example, number of current and potential customers, amount of goods and services supplied at unit prices, growth or decline in demand) does not easily fit the JDA. Partially, its role is to intervene in certain aspects of the market (say, on inner city property decline) and assist in achieving positive outcomes.

The JDA is a citywide development agency. Its initial project portfolio (for which funding has been secured) focuses on the City Centre, and projects with an inner city link. The City Centre comprises the Central Business District, Greater Newtown, Doornfontein and Braamfontein. The area represents an infrastructure investment of some R26-30 billion (built investment replacement cost), and has over 3 million mē in office space, and is home to almost 9 000 businesses.

This initial JDA focus on the City centre is a response to the priority attention placed on the area for strategic intervention by the City and its partners, prompted by the dangers of continued decline in the area, and the potential loss of a key economic asset in the deterioration of the vast amount of infrastructure investment.

The City Centre finds itself in an intensely competitive environment for business attraction, retention, investment, and job creation. The public and private sectors have already done considerable work to encourage the economic growth and development necessary to ignite the renaissance of the City Centre. Office vacancy rates are on average over 20% for Grade A and B space, and an estimated 50-60% for Grades C and D. Office rents are at their lowest for 20 years. However, while it is certain that the City centre is currently at the lowest point of the property cycle, and showing encouraging signs of picking up, more work is needed to bring stability and certainty to the market place, and create an understandable development and regulatory framework within which investment can take place.

2.3 Competitor Analysis

The JDA is the first such agency of its type in Johannesburg and South Africa, and probably Africa. It has no direct competitor agencies. However, the complex nature of its projects and programmes will bring it into contact with a range of agencies operating in fields that partially impact on JDA activities. The JDA's values and development approach envisages that these agencies will be partners in its operations, rather than competitors:

2.4 Comparative and Competitive Advantages

The key comparative and competitive advantages for the JDA are as follows:

• It is a focus and practical expression for partnership between CJMC and the private sector, with very significant financial involvement from the GPG
• It fills a clearly-expressed gap identified current policy and strategy frameworks for a project management and implementation agent
• It has the capacity for shareholder involvement to be widened, depending on development focus (for example, University of Witwatersrand)
• It is designed as a high-performance, high-calibre delivery agency
• It has independence and the power to take decisions quickly, within an agreed annual framework
• The programme and project portfolio can be expanded to include other areas (subject to availability of development finance), and will contract as are projects completed
• It can provide a tightly defined geographic focus to meet development demands
• The current programme and project portfolio has secured development finance and strong commitment for project specific financial provision
• It has the potential to make medium- and long-term returns on investment in projects, while delivering short-term development gains