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.