Value Chains and Industrial Development in South Africa

Abstract

This chapter focuses on the dynamics of global value chains (GVC) engagement and industrial development in South Africa through two case studies—the automotive and textiles/apparel sectors. The further industrialization and development of South Africa and of the Southern African region will depend heavily on further developing their engagement in GVCs and simultaneously upgrading their capacities into higher valued and more skill and intensive activities. The automotive industry is import and export intensive, offering the potential for technological advancement, increasing skill intensity and upgrading, and positive economic spillovers. Apparel is domestic market oriented, sourcing domestically, regionally in Southern Africa, and from Asia. It is an example of a low technology, labour intensive industry, exhibiting lower levels of managerial capabilities and skills. It is challenged by raising capabilities to meet new value chain requirements and extending the supplier base to increase value addition (and by implication employment) in the economy.