Jobs Fund Briefing Innovation for job creation Contents

Jobs Fund Briefing – Innovation for job creation

Contents 1. Objectives and background 2. Performance to date 3. Current funding window 4. Funding criteria 5. Application process 6. How to access the application form 2

Objectives and Background 3

Problem Statement • Despite periods of strong economic growth over the last decade, South Africa’s level of unemployment remains high • The official unemployment rate taken from the Labour Force Survey Q 1 2015/16 sits at 26. 4% • Roughly one in four South Africans in the labour force is unemployed • If discouraged workers are included (those who have given up searching for employment) the unemployment rate rises to approximately 34% 4

Addressing The Unemployment Challenge • To address the challenge of unemployment sustainably, South Africa requires (amongst other things) high rates of sustained economic growth • The macro-economic policy environment, infrastructure asset base, schooling system and regulatory frameworks are all key determinants of the growth path • The Jobs Fund is not intended to tackle these long-term, structural causes of low growth and unemployment • Many other government initiatives are directed at these challenges • Rather, the Jobs Fund is an opportunity to complement these efforts with a limited and targeted programme of support for effective labour market interventions that promise job creation in the short to medium term 5

Jobs Fund Mandate • The primary mandate of the Jobs Fund is to support initiatives that pilot innovative approaches to employment creation • To create 150 000 new jobs • To learn from these innovative models and build a knowledge base that can be used to contribute toward evidenced based policy making • The impact it seeks, is to contribute toward achieving positive systemic impact on poverty reduction, through the catalytic projects the Fund supports 6

Background To The Jobs Fund • R 9 billion fund administered by the National Treasury - GTAC • Launched in June 2011, completed 5 calls for proposals • Operates on challenge fund principles – allocation process is: – Competitive – Transparent • Co-finance innovative public and private sector projects with the potential to contribute significantly to sustainable job creation • Jobs Fund Partners share risk and costs by matching the Jobs Fund allocation: Emphasis on partnership and collaboration • Overcome barriers related to: cost, technology and infrastructure • Create 150, 000 sustainable jobs (over the project portfolio implementation period) • Focus on projects that benefit women and youth 7

Funding Strategy - Challenge Fund Approach • Challenge Fund Principles - open, transparent and competitive allocation of funding Open • Public sector entities, local authorities, NGOs and business can apply • Leveraging private sector capacity to achieve public sector goals Transparent • Clear application and assessment processes • Clearly communicated criteria Competitive • Independent investment committee • Applications compete against one another for funding • Open, public calls for proposals – targeted windows (Innovation) • Matched Funding • Funding Criteria are designed to maximise job creation i. t. o: - Innovation, Impact, Sustainability and Value for money • Good practice project performance tracking, grant management, and Evaluation & learning 8

Performance to Date 9

Jobs Fund Performance To Date Projects • • Four calls for proposals were completed in the period 2011/12 to 2014/15 The 5 th call for proposals was sector-specific; it targeted the Agricultural Sector and 18 new projects were approved in early September 2015 108 projects in total have been approved and 86 of those have been contracted (CFP 1 to 5) • Funding (as at end June 2015) • • R 4. 74 billion in grants committed R 2. 63 billion in grants disbursed to the implementing projects R 3. 54 billion in matched funding has been leveraged from project partners Agricultural round – another possible R 800 million committed 10

Current Funding Window Innovation For Job Creation Cross-sectoral 11

Definition of Innovation is defined as a new product or process that either unlocks long term job creation, or removes barriers to job creation. The product or process does not have to be new in absolute terms, but must be new to a given society. 12

Innovation definition expanded • New product, process or commercially viable business model that either unlocks long term job creation, or overcomes barriers to job creation. • The product or process does not have to be new in absolute terms, but must at least be new to a given society. • This definition includes developments of adaptations of existing products, processes and business models for use in new applications or contexts. • To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need(in this case job creation). • In summary, innovation is creating new value or capturing value in a new way which consequently leads to job creation. 13

Different forms of innovation • • • Product/Service – Introduces a new product or product improvement; or – A change in what the product offers. Process – Developing a new way of doing things; or – Changes in the way in which products/services are created or delivered. Paradigm – Changing the participants or direction of what is presently the dominant paradigm. i. e. community ownership vs. commercially driven. Market – New or different structure / adding new participants Organisation – New or different organisational structure – New or different participants within an existing organisational structure/value chain 14

Innovation Life Cycle Stage of innovation: 1 - Initiate – begins with identification of a problem – define vision, strategic intent 2 - Ideate – source ideas, brainstorming, seek inspiration 3 - Pilot - testing phase 4 - Operationalise – when pilot is successfully implemented 5 - Optimise – innovation can be improved 6 - Scale – replicate 15

Jobs Fund focus • Competitive applications from development stage 4 (operationalisation) • Limited funding may be made available for applications within development stage 3. • Documentation must be available with reference to all the stages the initiative has concluded • Clear timelines on how project will progress 16

Characteristics of an innovative project • • Initiative must be well documented Designed for scale Be collaborative Designed for sustainability Designed with the user in mind Do no harm Re-use and Improve Source – Rockefeller Foundation & UNDP 17

Monitoring & Evaluation Allow for accurate recording and measurement of: • • Accounting /administration Milestones Key project indicators Evidence 18

Possible Interventions • No preconceptions for innovation – a wide range of interventions to be supported • Innovation can be manifested in: – – Products Services Funding model Business model • Projects should achieve: – – Long-term, sustainable job creation Innovative, scalable models of job creation Skilled employees Reduced barriers to job creation 19

Funding Criteria 20

Funding Criteria - Eligibility • Minimum grant size of R 10 m and maximum of R 100 m • Matched funding - 1: 1 cash co-funding ratio • Compliance with administrative requirements (tax clearance certificates and annual financial statements for two years) • Applicants must be solvent, have been operating for more than two years (these criteria apply specifically to the lead applicant) • Applicants or partners to have a track record of more than three years of technical experience in the area of interest 21

Funding Criteria – Impact • Innovation: Initiatives must comply with Jobs Fund definition of innovation • Contribution to systemic change: Applications that facilitate long term, sustainable, systemic change to the labour market will be given preference. • Potential for job creation: Initiatives should demonstrate clear ability to create and sustain new permanent jobs in the long run, either directly or indirectly • Sustainability. Initiatives should be able to convincingly demonstrate a path to commercial sustainability beyond the term of the Jobs Fund grant. 22

Funding Criteria – Impact (Cont. ) • Additionality: The Jobs Fund aims to support initiatives that would not have taken place without Jobs Fund support and risk sharing, because other funders consider the risk of failure too high or the projected financial return too low. • Matched funding and value for money: The Jobs Fund aims to leverage existing resources available within the economy. The amount of matched funding provided within the proposed intervention will be a key assessment criteria. • Capacity to implement: Applicants must demonstrate relevant experience, organisational capacity and key capabilities. 23

Application Process 24

Who can apply? Private sector Non-governmental organisations Government departments Municipalities Cost and risk sharing required for: - Ownership - Impact - Sustainability • Matched funding benchmarks to be met • Applications that exceed minimum matched funding ratios may be considered more favourably • • • 25

Examples Of Ineligible Applications Bail out of distressed companies Start-up companies Initiatives/applicants with no proven track record Training activities not linked to job placement Initiatives with large capital investment but minimal jobcreation potential • Double dipping of funding, leading to double-counting of jobs or duplication of government initiatives • • • 26

How To Apply • Await opening of the relevant call for proposals • Access the online application form on the Jobs Fund website (www. jobsfund. org. za) • Register on the site and create an application (online applications are open & editable until call for proposals closes) • If a concept is approved, a full business case will be required • Contracting takes place once the business case budget and monitoring plans are approved • Once the contract is signed, an up-front portion of the grant value is disbursed; subsequent tranches are disbursed on a quarterly basis pending achievement of targets over the project lifespan • The Jobs Fund website provides guidance 27

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How to access the application form 29

GMS Landing page 30

Apply to the Fund 31

Registration on GMS ● Select the Registration Link ● Submit the applicable information ● Email Confirmation sent to applicants email address provided 32

Complete Online GMS Application ● Click the green (“+”) to start your application (Home page) ● Complete Registration (Application Type, Business Sector, project name etc. ) ● Being the application process 33

Navigation – Application Tabs 34

Completing the Concept note application Validating and Submitting your CN Application ● Validate the CN Application to check that all the mandatory fields have been completed ● GMS will return a validation report. ● When the validation report is blank, the CN Application will be complete and ready for submission. 35

GMS Tips ● Browser Popups: This website makes use of browser popups. Please ensure that your browser does not block popups. ● Save Regularly: You will be automatically logged out after 25 minutes of inactivity. If you are working on a form, remember to save regularly to keep your connection open. ● Save PDF report: Note that if you use ‘Google Chrome’ you can save your Concept Note application in PDF format 36

Questions? 37

Contact details SURNAME TELEPHONE CELLPHONE EMAIL ADDRESS (012) 315 5349 060 965 1984 Sonja. Loggenberg@treasury. gov. za (012) 406 9040 082 402 4825 Rulleska. singh@treasury. gov. za (012) 406 9113 083 440 6723 Sean. scott@treasury. gov. za Pieter Botes (012) 315 5705 081 400 2369 Pieter. Botes@treasury. gov. za Sonja Loggenberg Rulleska Singh Sean Scott 38