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Economic Complexity and Employment Expansion: The Case of South Africa

Author

Listed:
  • Haroon Bhorat
  • Arabo Ewinyu
  • Kezia Lilenstein
  • Christopher Rooney
  • François Steenkamp
  • Amy Thornton

    (Development Policy Research Unit, University of Cape Town)

Abstract

The paper is structured as follows: Section 2 provides an overview of the performance of South Africa’s post-apartheid economy. In order to provide a reference point from which to compare the targeted products (sectors) generated using complexity analytics, Section 3 reviews South African industrial policy, specifically the Industrial Policy Action Plan (IPAP). Section 4 does the following: First, South Africa’s level of economic complexity is presented. South Africa’s economic complexity in relation to regional groupings and other African economies is also examined. Second, the product space approach is used to examine South Africa’s existing productive structure, as well the extent to which it has undergone structural transformation in the post-apartheid period. Section 5 uses complexity analytics to identify potential channels for future diversification. The approach is unique in the sense that the avenues for diversification are identified at the granular product level. In Section 6 we consider five industrial sectors that house a number of the frontier products, namely, agro-processing, transport, metals, machinery and equipment, and stone and glass. For each of these sectors, we describe the employment potential of the relevant frontier product, the diversification options that arise from manufacturing the product, and the constraints that hinder the realisation of the diversification path toward the frontier product. This is informed by firm and industry association interviews. Section 7 discusses employment trends for industries housing frontier products, by discussing whether growth in the industry will encourage higher levels of employment or not. This discussion focusses on the employment potential for women and youth. Section 8 of the paper identifies key themes that should inform policy considerations concerning diversification into the frontier products.

Suggested Citation

  • Haroon Bhorat & Arabo Ewinyu & Kezia Lilenstein & Christopher Rooney & François Steenkamp & Amy Thornton, 2019. "Economic Complexity and Employment Expansion: The Case of South Africa," Working Papers 201905, University of Cape Town, Development Policy Research Unit.
  • Handle: RePEc:ctw:wpaper:201905
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    File URL: https://commerce.uct.ac.za/sites/default/files/content_migration/commerce_uct_ac_za/1093/files/DPRU%2520WP201905.pdf
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    Cited by:

    1. Haroon Bhorat & Christopher Rooney & François Steenkamp, 2019. "Building Economic Complexity in Africa," Working Papers 201906, University of Cape Town, Development Policy Research Unit.
    2. Caitlin Allen Whitehead & Haroon Bhorat, 2021. "Understanding Economic Complexity: An Application to the MER Sector," Working Papers 202105, University of Cape Town, Development Policy Research Unit.
    3. Christian Estmann & Bjørn Bo Sørensen & Benno Ndulu & John Rand, 2022. "Merchandise export diversification strategy for Tanzania: Promoting inclusive growth, economic complexity and structural change," The World Economy, Wiley Blackwell, vol. 45(8), pages 2649-2695, August.
    4. Justin Visagie & Ivan Turok, 2022. "Firing on all cylinders: Decomposing regional growth dynamics in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 90(1), pages 57-74, March.
    5. Andres Fortunato, 2022. "Getting Back on the Curve South Africa’s Manufacturing Challenge," CID Working Papers 139a, Center for International Development at Harvard University.
    6. Haroon Bhorat & Francois Steenkamp & Caitlin Allen & Robert Hill & Christopher Rooney, 2019. "Building Economic Complexity in the South African Fibrous Plant Economy," Working Papers copwp201904, University of Cape Town, Development Policy Research Unit.
    7. Richard Chauke & Thobeka Ncanywa, 2021. "Infrastructure development and economic complexity in South Africa. Running title: Can infrastructure development influence economic complexity?," Technium Social Sciences Journal, Technium Science, vol. 26(1), pages 488-501, Decembrie.

    More about this item

    Keywords

    Economic complexity; economic development; South African economy; structural transformation; women; youth; employment;
    All these keywords.

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