INDUSTRIAL DEVELOPMENT and Structural Transformation
Industrial policy needs to respond to both well-established challenges such as low rates of productive transformation and low growth as well as new challenges such as disruptive technological change and climate transitions. CCRED’s work on structural transformation builds a body of evidence on the factors underlying South Africa’s poor record of transformation and offers policy insights to address the weaknesses in the economy, as well as in other economies in the region. CCRED’s approach has been to focus on understanding markets and industries from a firm-centred perspective, linking competition and regulation with questions of industrial development, inclusive growth and regional integration. The main areas of research are sector studies on structural transformation, development finance, black industrialists, digitalization and green industrialisation.
Key Projects
1. Industrial Development Think Tank (IDTT) (2018 – 2023)
CCRED hosted the Industrial Development Think Tank (IDTT) for six years from 2018 to 2023 in partnership with the South African Research Chairs Initiative in Industrial Development (SARChI-ID) under an MOU with the Department of Trade, Industry and Competition (DTIC). The IDTT systematically deepened evidence-based research to inform policymaking in order to accelerate industrialisation, economic inclusion and structural transformation in South Africa and the SADC region.
Key areas of research under the IDTT included the following:
Sector studies of the automotive, agriculture and agroprocessing, and metals and machinery sectors, as well as other sectors such as citrus, poultry and plastics
Reviews of structural transformation and industrial policy
Black industrialists (BIs)
Digitalisation
Localisation
Development finance
Research outputs can be found here:
2. Advancing Opportunities for Black Industrialists in the City of Ekurhuleni (CoE) (2023 – 2024)
The Centre for Competition, Regulation and Economic Development (CCRED) was appointed to provide research services on advancing opportunities for black industrialists in Ekurhuleni. The project was a pilot study of Black Industrialists (Bis) in the Ekurhuleni region with a view to understanding both the barriers to entry and effective participation for BIs in the City given its manufacturing profile, as well as how BIs can be more effectively supported. Through in-depth interviews with BI firms, we collected data on firm characteristics (number of employees, ownership etc) as well as the nature of business activity and sectors in which firms operate, including investments, operations, firm performance and challenges experienced by firms. The insights were intended to feed into interventions being prioritised by the City of Ekurhuleni to help support BIs to participate more effectively, including identifying funding from the private sector, public sector, and development finance institutions, as well as investment partnerships and incentive schemes.
3. Gauteng Department of Economic Development (GDED) Sector Studies and Strategies (2016-2019)
The Gauteng Department of Economic Development (GDED) requested the Centre for Competition, Regulation and Economic Development (CCRED) in collaboration with Benchmarking and Manufacturing Analysts South Africa (Pty) Ltd (B&M Analysts), to conduct a research study on six sectors in the Gauteng province and develop sector strategies for them. The sectors were capital equipment and machinery, plastics and chemicals, automotive, furniture, food and beverages, and Information and Communications Technology (ICT). The core objective of the sector studies was to provide GDED with concrete and implementable support measures that could be used to promote industrial development in the province.
4. Growth promotion through industrial strategies (Zambia)
This project, commissioned by the International Growth Centre (IGC, based in the London School of Economics and Political Science in partnership with the University of Oxford) assessed the current and potential opportunities for industrial development in Zambia. The study analysed trends and patterns in industrial performance over time, as well as industry-level capabilities and competitiveness. It undertook a broad scoping of high potential sub-sectors in Zambia, with particular attention to resource-based industries and regional markets. It also provided a review of the policy framework for industrial development. The project identified several areas of untapped, substantial opportunities for Zambia’s manufacturing sector, particularly in the agro-processing and engineering products subsectors.
5. Review of Provincial Development Finance Institutions (PDFIS)
CCRED conducted a review of provincial development finance institutions (PDFIs) for the Government Technical Advisory Centre (GTAC) and National Treasury in order to support a more coherent and coordinated development finance system. The PDFIs included in the review were:
Eastern Cape Development Corporation (ECDC),
Eastern Cape Rural Development Agency (ECRDA),
Free State Development Corporation (FDC),
Gauteng Economic Propeller (GEP),
Ithala Development Finance Corporation (IDFC or “Ithala”),
Limpopo Economic Development Agency (LEDA),
Mpumalanga Economic Growth Agency (MEGA), and
North West Development Corporation (NWDC).
The review covered the following six key areas:
Mandate of the PDFIs
Corporate governance and regulatory environment
Risk management within the PDFIs
Developmental effectiveness of the PDFIs
Funding models and financial stability of the PDFIs
Organisational and institutional arrangements
The information gathered from this review was expected to feed into the finalisation of South Africa’s DFI policy and the development of relevant legislation.
6. Towards an understanding of the economy of Johannesburg (2015 – 2016)
The City of Johannesburg (CoJ) commissioned CCRED to undertake firm level surveys in specific industrial nodes in Johannesburg in order to enable the CoJ to design interventions to effectively stimulate dynamism and growth. Key areas of the study included understanding industry in the city through a survey of two industrial areas as well as research on economies of agglomeration in the ICT and broadcasting sectors.
Outputs included the following:
Towards an understanding of the economy of Johannesburg
A review of manufacturing activity in 26 industrial nodes
Food processing cluster report
Plastics cluster report
7. Regional Industrialisation Project (2014 – 2015)
The project, funded by the Department of Trade and Industry, investigated the nature of regional industrial development through three sector case studies that explored some of the key constraints and drivers of regional growth. The case studies were undertaken in collaboration with Corporate Strategy and Industrial Development (CSID, WITS) and Trade and Industrial Policy Strategies (TIPS). For the case studies, we analyzed industrial development from a regional perspective in three sectors i) construction; ii) capital equipment; and iii) agribusiness.
Outputs from the project were as follows:
Case Study 1: Transport infrastructure value chain in South Africa and Mozambique
Case Study 2: Capital Equipment with a special focus on the Zambian copper-belt
Case Study 3: Seed-oil value chain in Zambia, Zimbabwe and South Africa
Synthesis Report: Key findings from case studies of mining capital equipment, infrastructure inputs and soy agro-processing in Southern Africa and implications for regional industrial development agenda
8. Plastic Converters Strategy
The project was undertaken for the Department of Trade and Industry to assist in developing the plastics conversion sector strategy, including identifying relevant growth sub-sectors. The plastics sector is in many ways representative of the diversified manufacturing industry in which growth is necessary as part of broader-based economic development.
A collaboration between the Centre for Competition, Regulation and Economic Development, the Department of Trade and Industry, South African Research Chair in Industrialisation, and the University of Johannesburg
