Technological evolution in the South African and Argentine automotive manufacturing sectors: policy responses and results

Abstract

The comparative review explores the means by which technological upgrading and innovation in the South African and Argentine automotive manufacturing sectors evolved over time, and highlights how policy interventions shaped this evolution. Policies affecting export orientation in turn affected technological trajectories in each case. While South African policy oriented the sector towards global markets, Argentine policy supported regional integration, primarily with Brazil. This resulted in technological trajectories that aimed towards meeting the specifications of developed countries and developing countries respectively. Argentina experiences competition for knowledge-intensive activities in which Brazil had an advantage due to its larger scale, but South Africa does not face such regional competition. The key policy implication is that technological trajectories merit consideration in the context of trade policy, since the latter has a material impact on the technological requirements knowledge-intensity, and future competitiveness of the home industry.