Is Industrial Development an Effective Local Economic Development Strategy? The Case of Port Elizabeth-Uitenhage

While the South African industrial sector has recently begun to recover from a long period of stagnation, it has failed to create employment. This is ascribed to the restructuring process in this sector and 'over-staffed' firms. While there are lessons to be learned regarding local economic development (LED) from the Latin American and East Asian newly industrialising countries, it is misleading to explain the success of these countries simply in terms of export-orientation. Instead, a mix of both inward- and outward-looking paths of industrialisation was used. The present paper attempts to assess the potential for industrial development as an LED option in the city of Port Elizabeth-Uitenhage. Although only 8% of national manufacturing value added is produced in the Eastern Cape, the city of Port Elizabeth-Uitenhage produces 60% of all final goods and services in the province. This city is thus regarded as the 'hope for growth' in the province. In selecting a suitable LED strategy, the region's relatively high unemployment rate, widespread poverty and need for accelerated growth should all be considered. This case study and the conclusions it draws are partly based on a qualitative study in which leaders in the city were interviewed regarding their perceptions of future prospects for development.

  • Authors: Tamzyn Dorfling
  • Year: 1999
  • Organisation: Friedrich-Ebert-Stiftung
  • Publisher: Friedrich-Ebert-Stiftung
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