South Africa today is almost unrecognisable from the South Africa of 1994. In economic development terms, South Africa’s gross domestic product (GDP) has almost tripled from $136-billion in 1994 to a GDP of $384-billion in 2012. Many leading global brands have located manufacturing plants in South Africa and trade between South Africa and the rest of the world has grown massively.
However, this good economic growth performance masks a range of long-standing, structural shortcomings in the economy. The productive parts of the economy, such as agriculture, mining and manufacturing, have not grown fast enough to create sufficient new jobs, the economy remains relatively dependent on a few key sectors for both exports and growth impetus, and ‘inclusive growth’ has been elusive. Yet rapid growth in the productive sectors of the economy remains the main path to sustainable economic growth and large-scale job creation as centuries of economic history clearly demonstrates.
It is, therefore, encouraging that a growing global consensus is emerging around the role that industrial policy plays in signalling economic opportunities, addressing constraints faced by productive enterprises and developing purposeful collaborative actions of the state, business and labour to catalyse job-creating economic growth. In the UK, this approach has been termed ‘re-balancing’, while in the US, it is called ‘re-shoring’. The terminology may be different but the objectives of the re-balancing and re-shoring initiatives are the same to deepen industrial capabilities, grow the manufacturing sector and create jobs. READ MORE
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