The viability of high technology research and development in South Africa : a case study of Nortech.
Thompson, K. J. R.
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This study focuses on the viability of locating a company that manufactures high-technology products in South Africa. A small electronics manufacturing company called Nortech is used as a case study, and the results of the case study analysis provide an insight into the state of the high-tech electronics industry in South Africa. The economic models of Heckscher and others regarding factors of production, and the value-chain model of Porter as it related to the strategy of location of business activities, was used as a theoretical basis for the study. A theoretical model was constructed using these classical theories, modified to suit modern Knowledge-based economies, and this was used as a framework with which to analyse the case study. The case study of Nortech is presented by means of a discussion of the company history, mission, and vision, and an analysis of the product offering, competitive environment, and Research and Development skills. The focus throughout the analysis is on the relative advantages obtained through location, and the contribution of innovation and technical skills to the overall product. The context of the company within South Africa is discussed, with reference to the effect of national policy and infrastructure. The case study is evaluated within the framework of the theoretical model developed, and the relevance to the different product lines within the company. It was found that there were significant locational advantages related to high technical skills levels, flexible production methods and efficient value-chain structures. The sustainability thereof, in the light of decreased levels of national spending on Research and Development, and the continued loss of skills to foreign countries, remains a concern.