Industrial Clustering as a tool to enhance competitiveness of the economy of the KwaZulu-Natal Province, South Africa.
Moloi, Motusi Jerome.
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The South African government has in the past 20 years developed various industrial policies that were geared towards industrialisation and making meaningful contributions towards the creation of jobs, dealing with the issues of inequality and poverty. Some provinces including the KwaZulu-Natal (KZN) then followed suit in tailoring the national policies and strategies to ensemble their respective provincial imperatives. Subsequently, the Industrial Clustering concept was employed as a special purpose vehicle in order to enhance competitiveness of the various priority sectors. The study interrogated the challenges that were experienced by the KZN Department of Economic Development, Tourism and Environmental Affairs supported industrial clusters. It was that discovered that some industrial clusters collapsed and failed to sustain due to governance, inconsistent funding, leadership, lack of co-ordination and government proactive or induced approach in initiating clusters. The study further analysed the regional and international competitiveness of industries, knowledge-based theory of spatial clustering of industries, the dynamic nature of localization, regionally concentrated specialized firms linked vertically by value chains gain from complementary competencies and vertical and horizontal integration of firms showing a critical importance of similar or substitutive competencies, leading to cognitive proximities, innovation and enabling mutual learning processes. In a bid find an everlasting solution, an industrial clustering framework was developed in order to ensure that industrial clusters are guided and supported in terms of the provision of the policy imperatives and financial resources. Further, the five (5) supported industrial clusters (Maritime Cluster, Wood and Wood Product Cluster, Music Cluster, Textile and Clothing Cluster and Fashion Council) by KwaZulu-Natal government unanimously agreed that government should play a facilitation role in developing policies and strategies that are destined to promote industrialization and organisational competitiveness of the industrial clusters. Lastly, the study re-affirmed the relevance of Porter’s Diamond Model as there are unprecedented benefits that are accrued by individual members who join the industrial clusters.