- Title
- South Africa’s international competitiveness and the 4th Industrial Revolution
- Creator
- Mchunu, Siyabonga Raymond
- Subject
- Industry 4.0.
- Subject
- Technological innovations --21st century
- Subject
- Economic growth, development, planning
- Date Issued
- 2023-12
- Date
- 2023-12
- Type
- Doctoral theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/65718
- Identifier
- vital:74231
- Description
- Economic growth and development are of major concern for the economy of many countries around the globe including South Africa. The production function predicts that economic growth and development are determined by the quality and quantity of inputs. Economic theory recognizes that there is a positive relationship between productivity, economic growth, and development. Industry 4.0 is predicted to be a major enhancer of productivity. In recent years, the 4th Industrial Revolution has been considered as influential for industrial growth and development. South Africa’s growth in manufactured products requires elements that are characterized by the 4th industrial revolution given the growing but relatively low manufacturing output over the recent period. The adoption of new technologies in the production processes requires structural changes in production requirements and this has implications for the factor market. The aim of this study was to determine the effect of competitiveness on South Africa’s industrial development over the past 20 years (1998 - 2018), in the context of the 4th industrial revolution. A quantitative approach was used to examine the relationship between industry 4.0 and competitiveness and ultimately between competitiveness and industrial development. This study focused on the manufacturing sector and a sample of three industries were randomly selected and they are, the chemicals, the automotive, and the iron and steel industries. The countries of focus are South Africa relative to Germany, China, and the US. A panel data regression analysis technique was employed, and the study utilizes fixed and random effects methods. This analysis method was used to answer the research questions and to address the research aim and objectives. Two models were used to address the aim of the study. The first model determines the relationship between industry 4.0 and competitiveness controlling for capital intensities and labour productivity. The second model determines the relationship between competitiveness and industrial development controlling for trade finance, the real effective exchange rate, trade agreements, and distance. The study found that for South Africa relative to Germany, the fixed effects estimation (estimation 3) shows a positive and significant effect of relative investment on relative total factor productivity controlling for capital intensities, labour productivity, and fixed effects. The random effects estimation (estimation 4) showed a significant and positive effect of relative total factor productivity on the export ratio. The relative real effective exchange rate and the trade agreement dummy were insignificant, but they had the correct signs which are positive. With regards to the findings for South Africa relative to China, the random effects estimation (estimation 3) shows that relative investment has a positive effect on total factor productivity, on average ceteris paribus. The fixed effects estimation (estimation 2) shows that relative total factor productivity is positively correlated to the export ratio, but it is insignificant. The relative interest rate is positively correlated to the export ratio, on average ceteris paribus and this variable is significant. Estimation 3 shows that the relative total factor productivity is positively correlated to the export ratio, but it is insignificant. The relative interest rate variable is positively related to the export ratio, on average ceteris paribus and this variable is highly significant. The relative real effective exchange rate shows insignificant results with regards to its effect on the export ratio for all the estimations with the exception of the pooled OLS estimation. The findings for South Africa relative to the US show that there is a positive and significant relationship between relative total factor productivity and the relative investment in the fixed effects estimation. In the fixed effects estimation (estimation 1), relative investment is positively related to relative total factor productivity, on average ceteris paribus. In the fixed effects estimation (estimation 2), relative investment is positively related to relative total factor productivity, on average ceteris paribus. The relative capital intensity and relative labour productivity variables are insignificant, and the direction of correlation is contrary to expectations. The random effects estimation (estimation 3) shows a negative correlation between relative investment and relative total factor productivity. The estimate is insignificant, and this is contrary to the expectations. On the other hand, the correlation between the relative capital intensity and the relative labour productivity has the expected signs even though both variables are insignificant. The random effects estimation shows that there is a positive and significant relationship between the export ratio and the relative total factor productivity for estimations 2 and 3. The random effects estimation (estimation 2) shows that relative total factor productivity is positively related to the export ratio, on average ceteris paribus. The random effects estimation (estimation 3) shows that an increase in relative total factor productivity also results in an increase in the export ratio, on average ceteris paribus. The relative interest rate and the relative real effective exchange rate variable are insignificant in estimations 2 and 3 but both variables had the expected positive signs in terms of correlation. The recommendations of this study which are informed by the empirical literature discussed and findings are that trade and industry policymakers should provide a policy that directs the investment of resources to new technologies that are being used in the production process of goods and services by the firms/investors to achieve industrial development in the modern day and age. Clarity is required with regards to returns from industry 4.0 investment which may be expected over time since there may be a need for capital budgeting. Provide incentives for the use of labour enhancing industry 4.0 technologies for manufacturers to encourage the employment of labour since labour productivity is important for competitiveness. To complement industrial policy with other relevant policies such as labour and environmental policies. Labour policies are vital for sustainable accommodative industrial policy for Industry 4.0. Factor in a provision for trade finance to further facilitate and stimulate the movement of goods into international markets since trade finance was an important factor for industrial development. Mitigate the barriers that hinder the movement of industry 4.0 technologies locally and internationally. The positive contributions of Industry 4.0 that were determined by this study echo the need for investment into education and training to provide the necessary skilled labour for smart production since this is regarded as a prerequisite for a wholistic implementation of Industry 4.0 and finally outline the necessary standards and regulations for the safe and sustainable use of digital technologies. Suggested future research is to investigate the effect of Industry 4.0 on competitiveness and industrial development in the primary and tertiary sectors to provide the literature which sets out insights on these sectors and informs policy.
- Description
- Thesis (PhD) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2023
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xii, 298 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Mchunu, S.pdf | 5 MB | Adobe Acrobat PDF | View Details Download |