COVID-19 and beyond: Rethinking industrial and competition policy
- Nishal Robb and Thando Vilakazi
Since the end of formal apartheid in 1994, progress in changing entrenched patterns of economic participation, improving low levels of productive investment...
and stimulating dynamism and diversification in the South African economy has been limited.
In essence, the structural transformation of the South African economy – the key growth-enhancing process of shifting capital and labour toward higher productivity activities and acquiring more sophisticated productive capabilities (McMillian and Headey 2014; Nissanke 2019) – has stalled, with a number of studies suggesting that the country is in a process of “premature deindustrialisation” (Rodrik 2006; Andreoni and Tregenna
2018).
The above concerns, alongside the scale and persistence of economic exclusion in South Africa
– embodied most clearly in growing inequality and deepening unemployment – suggest the need
for a rethinking of a number of areas of economic and social policy. The effects of the COVID-19
pandemic and associated lockdowns on economies worldwide, the disruption of global supply
chains and the erosion of productive capabilities key among these, provide a powerful stimulus
for a rethinking of the roles of and relation between industrial policy and competition policy in
particular. These policy areas can act as powerful tools in supporting new entrants and stimulating
competitive rivalry in traditionally concentrated economic sectors, and for building capacity for
dynamism, innovation and resilience in the economy generally.
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