Contribution to industrial policy development
Overview
In the early 1990s, South Africa's automotive industry was closely protected. As the
country opened up its economy to the opportunities that emerged following democracy
in 1994, policy-makers faced inefficiency born out of years of protectionism, the looming
challenge of global competition, and the need to respond to obligations emerging from
its membership of the World Trade Organisation. Clearly there was a need for new policy
direction in the automotive industry.
The School of Economics has one of the longest histories of social responsiveness at the
University of Cape Town going back to the establishment of the South African Labour
Development Research Unit (SALDRU) in the early 1970s by Professor Francis Wilson.
SALDRU conducted research on the living and working conditions of the working class in
South Africa, and went on to lead the second Carnegie Commission of Enquiry on
Poverty in the early 1980s. Work on inequality and poverty continued with SALDRU's
involvement in the social survey and the establishment of the Centre for Social Sciences
Research with its focus on social issues such as AIDS.
In 1992, the University of Cape Town seconded Associate Professor Anthony Black,
Director of the School of Economics, to the Industrial Strategy Project, a major policy
research study based at the Universities of Cape Town and the Witwatersrand. The goal
of the Industrial Strategy Project was to produce trade and industry policy
recommendations for post-apartheid South Africa. Black had been researching policy
issues with regard to industrial development and this project provided an opportunity to
undertake detailed work at the sector level. For 15 months he worked full-time on this
project that produced a strategy for the automotive industry. The results of this work
were ultimately published in 1994 by the UCT Press in a book entitled An industrial
strategy for the motor vehicle assembly and component sector.
In fact, Anthony Black's involvement in industrial policy development predated his
secondment by many years and the secondment marked but a step in a longer-term
engagement with policy development. For example, during the 1980s Alec Erwin, then
still active as a trade union leader in the Congress of South African Trade Unions
(Cosatu), asked Black to act as an advisor to the tripartite alliance's Motor Industry Task
Group. This task group played a central role in developing the Motor Industry
Development Programme (MIDP) that was launched in 1995. The Motor Industry
Development Programme provides the policy framework for gradual tariff reduction and
export-import complementation that has guided the development of the automotive
industry since 1995.
Following the launch of the Motor Industry Development Programme, Black was asked by
the Director General of the Department of Trade and Industry to advise on its
implementation. This included assessing the impact of the policy, interacting with
stakeholders and providing ongoing to advice to government. Black was responsible for
establishing the Motor Industry Development Council, comprising all industry
stakeholders, and he chaired the Council for three years. In 2002 the Department of
Trade and Industry asked him to direct a major review of the Motor Industry
Development Programme.
The Volkswagen plant in Uitenhage.
What thus started as a policy research project in the School of Economics, led to the
University's direct involvement in policy-making and implementation through Black's
work.
The value of responsiveness: research & teaching
An assessment of the value of academic engagement with national policy formulation
must take into account the perspective of the policy-makers as well as the University's
focus on research and teaching.
From the viewpoint of policy-making, the main impact of the engagement lay in its
contribution to a set of polices that are generally regarded as having played a significant
role in the successful restructuring of the automotive industry. Black's research
contributed to establishing a long-term vision and a policy for the development of the
automotive industry, which has been able to restructure itself successfully to operate in
a more competitive environment. Concrete outputs include a series of reports for the
Department of Trade and Industry and Black was a frequent speaker at industry
conferences. He helped establish systems for government to monitor the impact of the
policy and established the Motor Industry Development Council which is still in operation.
In this way, the University and the School of Economics were presented to the
Department of Trade and Industry as well as other industry stakeholders such as the
different industry federations, the vehicle manufacturers, the component producers and
the trade unions. Black also interacted with governments in the region as part of the
SADC free trade discussions. The Motor Industry Development Programme is widely
regarded as a successful example of trade and industrial policy and has received
extensive media coverage to this effect. Policy reviews conducted by the Department of
Trade and Industry have continued the original objective of gradually phasing down
government support while maintaining a long-term planning horizon for investors.
At the same time, considerable academic benefit was derived by the University. Black
says that having the opportunity to put research into practice in such a direct way has
been a unique and enormously valuable experience, and the automotive industry
remains his major area of research. He has used his work with the automotive industry
to introduce new components in his teaching, for instance in a master's-level course on
trade and industrial policy. More recently, the School of Economics introduced an
honours-level course on policy analysis in which the automotive policy comprises a
module. This includes a simulation of the policy formulation process, with students
engaging in role-playing, representing stakeholders in policy negotiations.
Black's involvement in the motor industry policy process was extremely beneficial for his
research because it made it possible for him to gain access to industry players, which
would not normally be possible. He had regular interaction with senior executives from
the major car companies and senior government officials up to ministerial level. He also
conducted hundreds of interviews and held discussions with firms and industry
federations over a period of several years. His direct involvement in the industry
strengthened his understanding of the policy and development issues, and provided a
valuable basis for more conventional research. He has also supervised a number of
graduate research projects on the automotive industry.
Black supports the idea of economists and other academics working closely with
government, even going to work for government for limited periods. In his view there is
no substitute for this kind of real world experience.
However, this work had to be balanced with academic and administrative commitments
at the University. Other than the 15-month secondment, the engagement with policy
formulation was all done on a part-time basis, including during two sabbaticals. In 2005
he was invited to lead a further review of the Motor Industry Development Programme,
but was unable to do this owing to a lack of time stemming from his responsibilities as
Director of the School of Economics.
Impact on the University
The involvement of the School of Economics in different aspects of economic policy
formulation has clearly had an impact on teaching and research at the University, as is
shown by the examples cited above. According to Anthony Black, opportunities for this
kind of engagement may decline in future because the government has now developed
its own policy capacity and is establishing more of an arms-length relationship with
university-based advisors.
Nevertheless, the relationship between the University's responsive engagement and
conventional academic output needs continual attention. For example, while the
knowledge gained through the engagement with industry and government can certainly
be translated into conventional research output, the academic staff do not always have
the time to produce academic publications. Nevertheless, Black has produced a number
of journal articles and chapters in books, as well as contributions to popular publications.
He now plans to write a book about the development of the industry since 1990.
Staff at the School of Economics have been discussing how they could publicise their
research more widely, for example through writing leader articles for newspapers. This is
important because it puts the research into the public domain. They are also exploring
the possibility of having academic papers revised for publication in the mainstream
media so that the research can contribute to broader public debate.
These are but some of the ways in which the definition of research outputs could be
broadened in an academic context. Through Anthony Black's involvement in industry
policy formulation it is clear that the University has a developmental role to play in
society, especially in a developing country like South Africa. What is at issue is that
where academic staff make significant contributions to development, there should be
more recognition and wider coverage of this aspect of their teaching and research.
References
Department of Trade and Industry (2003) Current Developments in the Automotive
Industry. Department of Trade and Industry: Pretoria
Engineering News, July 23-29 2004
Interview with Professor Black, 20 October 2005