Abstract
M.Com. (Economics)
South Africa has been faced with early deindustrialisation despite various industrial policy efforts to promote the competitiveness of the manufacturing sector. The aim of the dissertation was to review the development of manufacturing in South Africa over two decades starting 1994 and ending 2014. The preliminary analysis showed that the performance has fluctuated over the period with three significant periods that can be assessed separately,1994-2002, 2002-2008 and 2008-2014. The assessment evaluated changes in South Africa’s productive of capabilities over time by applying two output based measures of capabilities, namely Lall’s (1992) technological content of exports and Hidalgo and Hausmann’s (2009) product and economic complexity indices. Though these measures provided some useful insights on outcomes, the assessment revealed weaknesses in the measures for this purpose. The second aspect of the research was to understand the factors that influenced these outcomes. This was done first by evaluating industrial policy and its role in shaping the country’s development path. Second, the competing explanations that have been provided for South Africa’s poor performance were evaluated. This aspect of the analysis pointed to two potential reasons for South Africa’s poor manufacturing performance. First, I argued that there was a misdiagnosis of the challenges facing the country in the 1990s which led to policy prescripts that were incompatible with the actual issues which needed to be addressed. Second, although the post 2007 policy period has involved a re-evaluation and has correctly characterised the main challenges to South Africa’s industrial development, the industrial policies adopted were incompatible with targeted industrial policy (identified in the literature as the approach required for achieving the diversification that is necessary for South Africa’s development) and, in any event, these interventions were undermined by fragmented policy tools. The third aspect of the research then sought to understand the extent to which these findings hold at a sectoral level and the implication for competitiveness of the sector. This was done using the plastic products industry as a case study. The analysis considers the relationship between the evolution of capabilities, performance, and the role of industrial policies.