The spatial distribution of manufacturing

Today I have been busy with some background reading for a presentation at the ERSA Workshop next week and have had a look at Fedderke and Wollnick's The spatial distribution of manufacturing in South Africa (2008). It captures a number of the things that make South Africa's spatial economy unique and shows the direction for further work in this field.

The paper used data from the manufacturing census 1970 to 1996 and looked at regional specialisation and industry concentration at provincial level. Their description of the data showed that manufacturing value added is dominated by Gauteng. However, they did not find a consistent trend towards regional specialisation or despecialisation.

Over the period Mpumalanga, the North West and Limpopo caught up from a low base. In KwaZulu-Natal, the size of the manufacturing sector grew by 80 per cent over the 26 years. Manufacturing value-added in Gauteng doubled from 1970 to 1982, but then declined through 1996. Between 1993 and 1996, when the economy was starting to open up, all provinces experienced specialisation.

The analysis of industry concentration showed that the most concentrated industries, apart from Iron & Steel and Motor manufacturing, are smaller industries.

In their model of the determinants of geographical concentration Fedderke & Wollnick examined measures of scale, linkages and technology. Their results showed the following:

• Internal scale economies encourage concentration.
• Industries with low labour intensity and extractive industries with high capital intensity are dispersed.
• Concentration of human-capital-intensive industries reflects SA skills shortages.
• High industry-specific productivity gradients are associated with concentration.

Throughout, South Africa's unique geographic dispersion is showcased: first, through a manufacturing sector closely linked to resource extraction and thus to first-nature geography's luck of the draw, and second, through human/labour geography that was adversely influenced by the era of grand Apartheid. The key question is, what has happened since 1996? Since democratisation, extractive industries and large-scale manufacturing has become less important and services have grown, the economy has been opened up and people are more mobile, but is there evidence of agglomeration forces driving local growth?

Stay tuned for more this semester...