1. Discuss SA industrial development policies and assess their suitability in terms of international best practice
Industrial development
- focus on all three sectors of the economy as well as
SMMEs
Best practice
- best practice part of economic development
- best practice from an international perspective include
3 general principles
Relying on markets
Fiscal and monetary self-discipline
Global integration
Developing countries must use innovative strategies to build markets and make markets work for them.

2. Integrated Industrial Development
In 2001 SA Govt introduced an integrated industrial
development plan
Called the Integrated Manufacturing Strategy (IMS)
focusing on improving competitiveness
For businesses to be feasible cross-cutting services and
key inputs need to be in operation.
Cross-cutting Services
Infrastructure
- to be competitive it must have a modern infrastructure
- includes modern modes of transport, logistical services at
harbours, airports and railway stations
- social infrastructure include an education system that
meets the demand of the economy.

3. Cross-cutting Services
Access to finance
- SA industrial development hampered by shortage of
finance for small business and BEE – Govt created
Khula Enterprises - Business Partners
Human Resources Development
- Focuses on post schooling
- Skills Development Act=needs for industrial development
- National Skills authority – SETAs
- Skills Development Levy – 1%
Technology
- R and D essential for discovery of new knowledge
- HSRC and CSIR subsidised by Govt to provide research

4. Key Inputs
Services that are essential for survival and competitiveness of business
The cost of these services have an impact on cost of production and prices as well as competitiveness\
Include
Transport
Telecommunications – digital and fixed line
Energy – electricity and liquid fuel

5. REGIONAL DEVELOPMENT
Increasing the economic livelihood of a specific area or areas
South Africa’s Regional Development Policy
Spatial Development Incentives (SDIs)
- fostering sustainable industrial development in areas
of poverty and unemployment
- focuses high level support where socio economic
conditions require Govt assistance
- SDIs driven by central govt but cut across provinces –
involves all three levels of government
- Areas = Maputo Development Corridor; Lumbombo SDI;
Richards Bay SDI; Wild Coast SDI; Fish River SDI; West
Coast Investment Initiative SDI; etc
- Made possible through public-private partnerships (PPP)
- Private sector set up the business and public sector provides the
infrastructure
- Govt benefits in form of taxes and reduced unemployment and
private sector receives profits and improved infrastructure

6. REGIONAL DEVELOPMENT Industrial Development Zones (IDZs)
- purpose-built industrial sites, physically enclosed and
linked to an international harbour or airport
- encourage growth by promoting exports and creating
jobs
- they are allowed to import duty free and obtain
supplies VAT free from SA
- production geared towards exports to foreign countries
= IDZ zones
Gauteng IDZ – O R Tambo Airport
Richards Bay – metals
Coega (PE)
Saldanha

7. REGIONAL DEVELOPMENT Incentives
- to attract FDI and domestic investment for SDIs,
industrial development programmes and employment
creation programmes n
Small Medium Enterprise Development Programme (SMEDP)
- aimed at new or expanding small medium businesses
- available to business in following industries
= manufacturer
= food processing
= aquaculture
= tourism
Duty-free incentives
- given to business within an IDZ
- to encourage domestic and foreign businesses to be set up in
IDZs and produce goods for exports

8. REGIONAL DEVELOPMENT Critical Infrastructure Programme (CIP)
- cash granted for projects to improve the infrastructure in
SA, roads, electricity etc
Foreign investment Grant (FIG)
- cash grant for foreign investors who invest in new
manufacturing businesses in SA
- investor is compensated for cost of moving new
machinery and equipment from abroad
Skills Support Programme (SSP)
- cash grants of up to 50% for costs of training
- encourage investment in training and new skills
Black Business Supplier Development Programme (BBSDP)
- 80% to black owned enterprises to provide training in
management efficiency
Strategic Investment Programme (SIP)
- allowances available to projects in the manufacturing, computer
and research and development fields