Jobs Fund Briefing – Innovation for job creation

2

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

3

Objectives and Background

4

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 Q1 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%

5

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

6

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

7

Background To The Jobs Fund• R9 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

Funding Strategy - Challenge Fund Approach

8

• Challenge Fund Principles - open, transparent and competitive allocation of 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

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

9

Performance to Date

10

Jobs Fund Performance To DateProjects• Four calls for proposals were completed in the period 2011/12 to

2014/15• The 5th 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)

• R4.74 billion in grants committed • R2.63 billion in grants disbursed to the implementing projects• R3.54 billion in matched funding has been leveraged from project

partners• Agricultural round – another possible R800 million committed

11

Current Funding WindowInnovation For Job Creation

Cross-sectoral

12

Definition of Innovation

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.

13

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.

14

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

15

Innovation Life Cycle

Stage of innovation:1 - Initiate – begins with identification of a problem – define

vision, strategic intent2 - Ideate – source ideas, brainstorming, seek inspiration 3 - Pilot - testing phase4 - Operationalise – when pilot is successfully implemented5 - Optimise – innovation can be improved6 - Scale – replicate

16

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

17

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

18

Monitoring & Evaluation

Allow for accurate recording and measurement of:

• Accounting /administration• Milestones• Key project indicators• Evidence

19

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

20

Funding Criteria

21

Funding Criteria - Eligibility

• Minimum grant size of R10m and maximum of R100m• 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

22

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.

23

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.

24

Application Process

25

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

26

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 job-

creation potential • Double dipping of funding, leading to double-counting of jobs

or duplication of government initiatives

27

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

28

29

How to access the application form

30

GMS Landing page

31

Apply to the Fund

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

Jobs Fund Learning Forum: Day 3 Training

33

Navigation – Application Tabs

11 Nov 2015 Road show PPT – 6 CFP

34

● 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.

Completing the Concept note applicationValidating and Submitting your CN Application

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

37

Questions?

38

Contact details

SURNAME TELEPHONE CELLPHONE EMAIL ADDRESS

Sonja Loggenberg (012) 315 5349 060 965 1984 Sonja.Loggenberg@treasury.gov.za

Rulleska Singh (012) 406 9040 082 402 4825 Rulleska.singh@treasury.gov.za

Sean Scott (012) 406 9113 083 440 6723 Sean.scott@treasury.gov.za

Pieter Botes (012) 315 5705 081 400 2369 Pieter.Botes@treasury.gov.za