HRD Review 2003: Overview of Industrial Policy

This paper analyses the impact of industrial policy on the demand for labour. It shows that South Africa's industrial development has historically been driven by minerals extraction and import-substituting industrialisation, overlaid by apartheid policies aimed at excluding the majority of the population from the economy. This entrenched a growth path characterised by capital-intensive production processes, a paucity of skilled labour, and exceptionally high levels of unemployment. The post-1994 period has seen a radical shift from the protectionist policies of the past. Trade liberalisation and supply-side policies have succeeded in improving the international competitiveness of manufactured exports. However, high levels of unemployment persist among unskilled and semi-skilled workers, while high levels of inequality remain a pervasive feature of the economic landscape. The paper concludes that HRD policies should adopt a two-pronged approach: a short- to medium-term emphasis on developing unskilled labour for jobs in the non-tradable sector, and a long-term objective of enlarging the pool of skilled labour in line with the pattern of demand emerging in the manufacturing sector.

  • Authors: Miriam Altman and Marina Mayer
  • Year: 2003
  • Organisation: HSRC
  • Publisher: n/a
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