Issues of Growth and Employment Concerning the Manufacturing and Services Sectors in South Africa

by TREGENNA, F. , 2006
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

There has been much talk in recent years, both in South Africa and internationally, of the rise of the services sector. Manufacturing is regarded by some as no longer being able to generate economic growth and employment on the scale required in a country such as South Africa. Others have concern that there is a premature expansion of the services sector, which may slow down the South African growth process and economic dynamism. These are complex questions in various ways: empirically/statistically, there is little clarity on the extent to which the apparent changes in the sectoral structure of the South African economy are real as opposed to the shifting around of activities (notably through outsourcing). Economically, different sectors have varying capacities in terms of, inter alia, inter sectoral linkages, growth and employment multipliers, balance of payments and so on. Politically there are distributional issues involved as well as existing vested interests. The paper is intended to be a rigorous analysis of these and related questions, at both the conceptual and empirical levels. This extended research proposal briefly outlines some of the background and differing conceptual approaches, gives an overview of some relevant empirical trends in South Africa, and begins to concretise some of the questions and how we plan to go about investigating them. It is offered on this website as a tool for researchers.