The wind energy global value chain localisation and industrial policy failure in South Africa

Mike Morris, Glen Robbins, Ulrich Hansen and Ivan Nygard
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Glen Robbins: University of Cape Town
Ulrich Hansen: Danish Technical University
Ivan Nygard: Danish Technical University

Journal of International Business Policy, 2022, vol. 5, issue 4, No 4, 490-511

Abstract: Abstract This article utilises a GVC analytic framework to analyse the wind energy value chain in South Africa and its impact on localisation of goods and services. Its theoretical contribution highlights governance as dependent on system integration dynamics, with lead firms operating as system integrators. The empirical analysis focuses on the interplay between energy and industrial policy showing how policy failure, driven by coal-based vested interests, disrupted system integration and undermined the renewable energy programme. The failure to ensure continuity and predictability of the auction bidding process within energy policy cascaded down the wind energy chain negatively impacting industrial policy attempts to localise domestic and foreign enterprises. This also derived from the South African government failing to prioritise, develop, and embed renewable energy as a green economy strategy within its industrial policy framework. We conclude with the following lessons: (a) GVC dynamics and lead firms cannot be ignored if localisation is to take root; (b) green strategies should be mainstreamed within industrial policy; (c) localisation starts with lead firms encouraging follower sourcing of first tier suppliers; (d) localising domestic value-added services is just as important as developing manufacturing enterprises.

Keywords: wind renewable energy; global value chains; industrial policy; localisation; REIPPPP; green industrialisation (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1057/s42214-021-00123-8

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