South in Africa, metropolitan in culture : industrial development trajectory of South Africa

Abstract

Abstract: Industrialisation in South Africa followed the resource determined forward and backward linkages in Rostowian fashion. From the nineteenth century agro-industries established the initial foundation of Schumpeterian entrepreneurial changes to agrarian life. The transition into industrialisation occurred within the Polanyian state intervention in the market to drive industrial development. The context of the mineral- agrarian economy determined state mitigation of the high cost structure of the economy. Geographical location, factors of production (labour, capital) and policy directives determined a market intervention. Import-substitution as strategic policy option as proposed by Prebisch, was followed, but the state refrained from full socialism or central market planning. The industrialisation of the South African economy gained momentum since the 1920 under protectionist state industrial policies. Powerful business groups, corporate entrepreneurs, especially from the mining sector, collaborated with state protectionism. The Gerschenkronian latecomer effect indeed played itself out in South African industrialisation, but local human capital developed innovative technology locally to enhance the industrialisation process. The trajectory of South African industrialisation reflects the establishment of a near first-world industrial base, grounded in a mix of scare factors of production (capital, entrepreneurship, skilled labour) and abundant factors of production (unskilled labour, natural resources). Weberian traits of the Protestant work ethic is a significant driver of economic, and specifically industrial development in South Africa. The specific context of a European minority population controlling the political economy, eventually impacted negatively on the modernisation and progress of the industrial sector in South Africa by the end of the twentieth century