Annual Forum Papers

The Significance of Product Development to Firm Competitiveness: A Case of Plastic Product Firms in Ekurhuleni

  • Year: 2005
  • Author(s): L.G. Mohamed
  • Countries and Regions: South Africa

Understanding firm competitiveness and product development is crucial to industrial development. The plastics sector provides a good case in which to explore these issues. The plastics sector has been one of the better performing sectors in recent years in terms of output and employment. Plastic products are increasingly replacing metal products, thus placing the plastics sector at the core of manufacturing. There are constant developments related to the properties of materials such as rigidity, colour and flammability. Hence it is vital for firms to adapt, combine and develop capabilities to establish new products and markets. These factors require downstream firms to align their technological capabilities and dynamics to meet such sector specific and international challenges. The paper assessed different dimensions of firms competitiveness and capabilities, including technological capabilities, investment decisions and skills development. It finds that the firms that are engaging product development and industrial restructuring through upgrading or re-organisation of their production processes tend to be more competitive and were growing. The paper also highlights actions required in order to upgrade and re-organise production processes, including appropriate government policies.