Economic Complexity and Employment Expansion: The Case of South Africa

Haroon Bhorat, Arabo Ewinyu, Kezia Lilenstein, Chris Rooney, Francois Steenkamp and Amy Thornton

Working Papers from University of Cape Town, Development Policy Research Unit

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.

Keywords: Economic complexity; economic development; South African economy; structural transformation; women; youth; employment (search for similar items in EconPapers)
Pages: 89 pages
Date: 2019-12
New Economics Papers: this item is included in nep-cwa and nep-isf
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Citations: View citations in EconPapers (8)

Published in Working Paper Series by the Development Policy Research Unit, December 2019, pages 1-89

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Working Paper: Economic Complexity and Employment Expansion: The Case of South Africa (2019)
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