Trade and Industry

Monday, 14 August 2023

Localisation and industrial policy: Scopes, debates and instruments

  • Year: 2023
  • Organisation: TIPS
  • Author(s): Neva Makgetla (TIPS)
  • Countries and Regions: South Africa

Localisation has become an increasingly important part of South Africa’s industrial policy as articulated by the Department of Trade, Industry and Competition. At its core, it is a strategy to identify and support sectoral priorities for industrialisation. Those functions are also central to the well-known import-substitution and export-oriented models. The localisation approach remains relatively under-theorised, however, and is often wrongly equated to import-substitution industrialisation as conventionally conceptualised. This paper aims to deepen understanding of South Africa’s localisation strategy by identifying:
its economic logic; how it differs from the import-substitution and export-oriented approaches adopted over the past century; and the main obstacles to implementation.