South Africa has no choice but to develop its advanced manufacturing capabilities. The structurally high wages of the country and its poor labour productivity relative to other export-orientated countries hampers its global competitiveness, a panel of experts says.
While advanced manufacturing techniques and machinery require higher levels of skills, such jobs justify the generally high wages demanded in South Africa and also provide companies with sustainable commercial opportunities.
Advanced manufacturing, including the production of advanced materials and the use of advanced manufacturing techniques, can create alternative employment opportunities through the creation and growth of new industries and markets.
Advanced manufacturing can provide critical components and materials for use in other industries. However, this typically involves highly skilled people working with expensive machines to produce small volumes of components locally that are critical for manufacturing and assembly of large work packages, says global aerospace manufacturing company Aerosud process development project director Wouter Gerber.
Using new technologies innovatively to change the structure of the local economy, to improve speed to market to compete against imports and to create new jobs in new industries are key potential benefits of advanced manufacturing, says tertiary institution Vaal University of Tech-nology acting executive director of technology transfer Jan Jooste.
Department of Science and Technology (DST) director-general Dr Phil Mjwara emphasises that regarding the effect of implementing new technology as detrimental to job creation is too simplistic.
“It is not an either/or issue. There is a continuum of companies comprising various levels of technology and employment, and technology is often required to enable them to compete among global competitors. The DST aims to provide support across the spectrum of manufacturing companies.”
Mjwara adds that technology should be used to enhance the competitiveness of existing manufacturing sectors.
“New manufacturing technologies should also be used to diversify South Africa’s economy and expand the number of sectors contributing to the country’s exports. Besides increasing exports, South Africa should also continue to develop its own technologies to counteract the licensing fees paid for the use of proprietary technologies and capitalise on the knowledge, intellectual property and developments of the country,” he says.
Further, the role of manufacturing in job crea-tion is misunderstood because it is the products of manufacturing being used in diverse industries that improve broader job creation, Mjwara emphasises.
General manufacturing has a job multiplier effect of between 1.58 and 2.5 times, while high-technology manufacturing has a multiplier effect of about 3.5 times and up to 4.5 times for microprocessor manufacturing.