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Backbone services as growth enabling factor - an Input-Output analysis for South Africa

Author

Listed:
  • Susanne Fricke

    (Chair of Economic Policy, Friedrich-Schiller-University Jena)

  • Bianka Dettmer

    (Chair of Economic Policy, Friedrich-Schiller-University Jena)

Abstract

While previous studies highlight the importance of the manufacturing sector in the economy, we argue that rather backbone services play a key role for economic growth. We perform an Input-Output analysis to determine the linkages between backbone services and manufacturing in South Africa. We find high and evenly spread forward linkages of backbone services to the rest of the economy which indicate strong growth- inducing downstream effects. Moreover, the interconnectedness between backbone services and manufacturing is twofold and depends on the level of technology intensity of industries. Especially the production of high technology goods requires a relatively higher share of inputs from backbone services. Thus, an efficient provision of backbone services is essential to induce manufacturing production and enable economic growth in South Africa.

Suggested Citation

  • Susanne Fricke & Bianka Dettmer, 2014. "Backbone services as growth enabling factor - an Input-Output analysis for South Africa," Jena Economic Research Papers 2014-016, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2014-016
    as

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    More about this item

    Keywords

    Backbone Services; Growth; Input-Output Analysis; South Africa;
    All these keywords.

    JEL classification:

    • L8 - Industrial Organization - - Industry Studies: Services
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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