Department of Trade and Industry
DRIVING COMPETITIVENESS:
TOWARDS A NEW INTEGRATED INDUSTRIAL STRATEGY FOR SUSTAINABLE EMPLOYMENT AND GROWTH
Dr David Kaplan
Chief Economist, DTI
May, 2001
1. Why an industrial strategy?
1.1 A good manufacturing strategy promotes investment
1.2 Global trends - the implications for SA manufacturing and the DTI
2 The changing world - the growing importance of markets
2.1 Exploding markets;new international trends
The expansion of market forces in the modern era
The limitations of the marketNew markets, new role for the state: towards
arules-based domestic economy for the peopleMarket rules & market failure: industrialstrategy in South Africa
2 The changing world
2.2 Balancing the rules for domestic and international markets
Domestic markets and the role of competition policy A broader mandate: objectives for DTI industrial strategy:
BEE, SMMEs, Employment
The impact of new technologies is transforming the role of the state Balancing acts: public interest and economic growth Effective regulation requires cooperation across government
2 The changing world
2.3 Globalisation:Whom does it really benefit?
Levelling the playing fields? Multilateral economic institutions
The importance of bilaterals and multilaterals
3 Current Industrial Policy
3.1 The learning years: 1994-1999
3.2 Policy logic and coherence: 1994-19993.3 Policy design: 1994-1999 - best
practice?3.4 Industrial performance: did our
policies work?
Source: Statistics South Africa
1994 1995 1996 1997 1998 1999 200015.13 16.87 18.57 19.92 21.45 23.72 27.87
M A N U F A C T U R IN G - E x p o r ts a s a R a t io o f P r o d u c t io n
1 0
1 5
2 0
2 5
3 0
1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0
Current Industrial Policy: An AssessmentTable 1: Manufacturing - Exports
S o u r c e : S ta t is t ic s S o u th A fr ic a
1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 01 9 0 2 1 1 2 0 8 2 2 2 2 1 6 2 3 1 2 4 6
M A N U F A C T U R IN G - L a b o u r P ro d u c tiv ity: O u tp u t (R 0 0 0 ) p e r e m p lo ye e (c o n s ta n t 1 9 9 5 p r ic e s )
1 8 0
1 9 0
2 0 0
2 1 0
2 2 0
2 3 0
2 4 0
2 5 0
1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0
Table 2: Manufacturing - Labour Productivity
S o u rc e : R e se rve B a n k o f S A
1994 1995 1996 1997 1998 1999 200011 .15 1 2 .90 1 3 .19 1 3 .18 1 2 .59 1 2 .24 1 2 .55
M AN U F AC T U R IN G - In vestm en t as R atio o f C ap ital S tock
11
11.4
11.8
12.2
12.6
13
13.4
13.8
1994 1995 1996 1997 1998 1999 2000
Table 3: Manufacturing - Investment
Source: Statistics South Africa
1994 1995 1996 1997 1998 1999 2000271,020,658 301,847,505 303,035,566 310,263,934 288,692,948 301,259,129 316,579,223
M anufac tur ing - V a lue of S a les (R000 )cons tant 1995 pr ices
270,000
275,000
280,000
285,000
290,000
295,000
300,000
305,000
310,000
315,000
320,000
1994 1995 1996 1997 1998 1999 2000
Table 4: Manufacturing - Value of Sales
S o u r c e : S t a t i s t i c s S o u t h A f r i c a
1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 01 , 4 2 7 , 0 4 5 1 , 4 3 1 , 0 0 8 1 , 4 5 6 , 3 9 3 1 , 3 9 6 , 4 2 9 1 , 3 3 9 , 3 2 8 1 , 3 0 6 , 9 3 3 1 , 2 8 8 , 4 3 8
M A N U F A C T U R IN G - A v e r a g e T o t a l N u m b e r o f E m p lo y e e s
1 2 5 0 0 0 0
1 3 0 0 0 0 0
1 3 5 0 0 0 0
1 4 0 0 0 0 0
1 4 5 0 0 0 0
1 5 0 0 0 0 0
1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0
Table 5: Manufacturing - Employment
4 Towards an integrated industrial strategy framework
4.1 Key factors affecting manufacturing: ICT,
innovation and demanding customers
4.2 Old modes of competitiveness count for
much less
4.3 SA manufacturing: what must be done? Don’t rely on the old ways Don’t bank on cheap labour Forget protection Do pay attention to innovation Enhance knowledge capacities
5 Continuities and new directions
5.1 Continuities: preserving the best of the
old
5.2 New directions: towards a knowledge-
intensive manufacturing sector
5.3 An integrated industrial strategy for the
region
5.4 Phasing in policy changes
5.5 Our history, our special concerns
6 Making the change to a knowledge-based economy
6.1 Constraints Human resources Infrastructure
6.2 Tensions Breaking down departmental barriers Employment levels
7 Making it work:indicative policies
7.1 Skills development
7.2 Acquiring and creating knowledge
7.3 Information and communication technologies
7.4 Networks and best practice
7.5 Consultative policy making
8 Government implementation of the new industrial strategy
framework
8.1 Extending industrial policy across departments
8.2 Business and consumer regulation, competitiveness
8.3 Joined-up government: working with other state departments
9 Government as a learning organisation - the importance of monitoring and evaluation
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