An assessment of the current status, and future development, of the Pietermaritzburg footwear industry as a cluster.

Abstract

While the South African footwear industry is a relatively modest contributor to both GDP and employment in the South African economy, it has historically played a dominant role in the economy of Pietermaritzburg. The opening up of South Africa's markets to the import of cheap shoes from the Far East, particularly China, together with large quantities of shoes smuggled into the country, has had a catastrophic impact upon the South African footwear industry. Due to its relative concentration of footwear manufacturers, the Pietermaritzburg footwear industry has been particularly hard hit by these developments and has suffered a decline in both production and employment. The well-documented success of footwear clusters in Italy, Brazil and Mexico have lead local researchers and policy-makers to conclude that clustering provides a potential solution to the challenges facing the Pietermaritzburg footwear industry. The discussion concerning the future development of the Pietermaritzburg footwear industry has, to date, simply assumed that it is a cluster without any actual research to verify this assumption. In addition, the concept of clustering is often used by these authors without defining what is meant by the term or how the concept of clustering can practically be applied in the context of the Pietermaritzburg footwear industry. This study seeks to address this deficiency by firstly examining the theory pertaining to the clustering concept, particularly what a cluster is, what types of clusters exist and how clusters can be developed, and secondly by conducting exploratory research to evaluate to what extent the Pietermaritzburg footwear industry can be viewed as a cluster, and if so what type of a cluster, and what steps are required to develop it as a cluster. Secondary data analysis was performed on material relating to the South African footwear industry in general and the Pietermaritzburg footwear industry in particular. This analysis was combined with primary data gathered by means of interviews conducted with stakeholders in the Pietermaritzburg footwear industry to assess the industry's conformity to the theoretical definition of a cluster. A sample of thirty-three individuals, including manufacturers, suppliers and trade union representatives, was interviewed using a non-scheduled structured interview technique. The study concluded that the Pietermaritzburg footwear industry exhibits a high degree of geographic concentration and active business channels that do achieve significant synergies in certain areas. However, it was found that the industry does not meet the final characteristic of collective action. As a result it is argued that the Pietermaritzburg footwear industry would appear to show sufficient conformity to the requirements to warrant its description as a cluster but that it probably conforms most closely to the 'latent' or 'underachieving' cluster classification. Finally, the dissertation presents a number of recommendations for policy-makers and other role players for the development of the Pietermaritzburg footwear industry as a cluster. Salient recommendations include the importance of conducting research that can be used to persuade manufacturers of the benefit of clustering together; the need to appoint an experienced broker to actively facilitate the development of the cluster concept; and the importance of addressing gaps in the supply-chain.