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Raphael Kaplinsky

Open University

Raphael Kaplinsky is an Honorary Professor at the Science Policy Research Unit. He is also an Emeritus Professor at the Institute of Development Studies and at the Open University. His primary research interests are in Globalization, Global Value Chains, Inclusive Growth and Innovation, the Terms of Trade and the Impact of the Rising Powers (particularly China) on Sub-Saharan Africa. Over the past four decades he has worked with policy makers, the private sector, trades unions and civil society groups. Since his formal retirement at the end of 2014, he has begun working on the green economy and urban regeneration in Newhaven and Lewes (towns close to Sussex University), and in Greece.
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podcast
Is the electric age a game changer for South Africa’s automotive industry?
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publication
Government Policy in Multinational-Dominated Global Value Chains

Through a series of government plans, the South African automotive industry has achieved undeniable success, especially in terms of its export orientation. The industry uses efficient technologies and is integrated into global markets. However, major structural weaknesses exist. Export growth has not been accompanied by increasing local content, investment has been modest and employment creation insignificant. Vehicle and component imports into the domestic market are high and the industry runs significant trade deficits. Most core technologies are imported, including advanced power trains and electronics. This chapter considers the structural impediments to the industry’s development, as well as issues related to ownership and power relations between the state and multinational firms. Analysing the potential for further localization and the deepening of the supply chain, the chapter considers global technology developments, domestic productive capabilities, and power dynamics in the global value chain (GVC). The chapter argues that state–business bargaining dynamics have negatively affected this potential. While efforts to deepen the supply chain would allow for more sustainable growth, the achievement of such goals is impossible without concerted commitment from all stakeholders.

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publication
Value chains and industrial development in South Africa

This paper focuses on the dynamics of global value chains (GVC) engagement and industrial development in South Africa through two case studies - the automotive and textiles/apparel sectors. The further industrialisation and development of South Africa and of the Southern African region will depend heavily on further developing their engagement in GVCs and simultaneously upgrading their capacities into higher valued and more skill intensive activities. The automotive industry is import and export intensive, offering the potential for technological advancement, increasing skill intensity and upgrading, and positive economic spillovers. Apparel is domestically market oriented, sourcing domestically, regionally in Southern Africa, and from Asia. It is an example of a low technology, labour intensive industry, exhibiting lower levels of managerial capabilities and skills. It is challenged by rising capabilities to meet new value chain requirements and extending the supplier base to increase value addition (and by implication employment) in the economy.

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publication
Regional integration, regional value chains and the automotive industry in Sub-Saharan Africa

To date, regional automotive value chains have not developed to any significant extent in Africa. Growing demand for vehicles across the continent, closer economic integration and the desire on the part of some larger African countries to establish an automotive industry have improved prospects. But major obstacles remain: the political geography of the subcontinent and the tendency of the industry to cluster in a few locations indicate that many smaller countries are likely to miss out on attracting investments. This should not matter if they are attracting investment in other sectors. It does however imply that it is unlikely that the automotive industry will drive regional integration independently of a broader integration process which sees the development of regional value chains across a multitude of sectors helping to bind the continent into a larger common market.

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publication
Trade and Industrialisation in Africa: SMEs, Manufacturing and Cluster Dynamics

Trade in manufacturing through global and regional value chains has played an especially prominent role in global economic growth in recent decades. However, Africa faces severe challenges in growing manufacturing activities in the face of China and Southeast Asia’s competitive dominance of global manufactured product markets. Traditionally, global trade is heavily concentrated at the corporate level. But this reliance on large firms as a driver of trade is problematic for Africa given its need for a more inclusive synergistic trade and economic growth path that is more employment intensive, more decentralised and which provides scope for enhanced activities by indigenous and small-scale industry. This is not to argue for the exclusion of large firms or foreign direct investment in economic growth, but rather to argue the case for an increased presence of indigenous small-scale firms in the economy and in export trade. There is evidence of dynamism in Africa, both within individual Small- and Medium-sized Enterprises (SMEs) and in clusters of SMEs. In understanding the challenges faced by this sector, and in examining the prospects for their participation in external trade, we review the experience of 25 African clusters using four dimensions: the nature of unintended externalities (e.g., external economies), market orientation and upgrading and growth trajectories, cluster dynamism and joint action for upgrading, external institutional support and upgrading. In terms of policy challenges for SMEs and export trade we discuss four major areas: (i) participation in governed global value chains feeding into high-income markets, (ii) export sales to non-regional low-income markets, (iii) export sales to regional markets and (iv) informal sector cross-border trade to regional economies. We conclude that for Africa, trade and industrialisation are integrally linked and attempts to facilitate regional trade policies cannot ignore the need for developing appropriate industrial policy and adopting an approach of developmental regionalism. This is especially evident with respect to SME development.

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publication
Rents, Power and Governance in Global Value Chains

This paper addresses the  generation  of  rents  and  the  distribution  of  gains  in  the  global  operations  of  governed Global  Value  Chains  (GVCs)  and  seeks  to  provide  an  architecture  for  analyzing  the  governance  of  GVCs.  It distinguishes between four sets of rent—gifts of nature; innovation rents; exogenously defined rents; and market power—and three spheres of governance—setting the rules -“legislative governance”; implementing the rules -“executive governance”; and monitoring rules and sanctioning malfeasance -“judicial governance.” The exercise of governance power in GVCs over the generation, protection and appropriation of rents is considered though the lens of four sets of key GVC stakeholders—the corporate sector, civil society organizations, the nation state and supranational institutions. This general analysis is given flesh through three case studies: food-safety standards in GVCs; taxation  policies  and  competition  policies.  In these  sectors,  the  corporate  sector  is  generally  much  more effective in governing rent generation and appropriation in the global operations of GVCs than are the three sets of  non-corporate  stakeholders.  From this  observation  we  offer  a  hypothesis  that  the  capacity  of  non-corporate stakeholders, including national states, to govern GVCs is contingent upon the extent to which this coincides with the interest of the corporate sector. However, as noted, this balance of power between private and non-corporate actors is a contested terrain and dynamic in nature.

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publication
Standards, regulation and sustainable development in a global value chain driven world

Regulations and standards have become an increasingly important factor affecting the capacity of producers to participate in global markets. Directly and indirectly, they not only determine the terms of market-entry but also affect the extent to which different producers are able to position themselves in global value chains in a manner which provides for socially and environmentally sustainable income growth. Standards compliance can enhance producer capabilities and assist in meeting many of the SDG objectives. But it may also involve trade-offs between different SDG goals. Standards compliance is simultaneously inclusive (facilitating the participation of low and middle income countries producers in global production and spreading incomes more widely globally) and exclusive (barring small producers from market access and displacing unskilled labour from supply chains). What policy measures will best lead to the most positive outcomes as standards diffuse through global value chains?

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publication
“One thing leads to another”—Commodities, linkages and industrial development

With a particular focus on low income economies in SSA, this paper addresses the nature and determinants of linkages from the commodities sectors and challenges the received view that enclave development is an inherent characteristic of resource extraction, particularly in the hard and energy commodities sectors. It argues that there has been a steady increase in linkage development and that there are significant opportunities for deepening this process. The opportunities may be greater for backward than for forward linkages, particularly in the minerals and energy sectors. In making this case, this Discussion Paper draws on the experience of high income countries which have resource intensive economic structures, the geographical specificity of many resources and the growing interest of large resource extracting firms in outsourcing the production of inputs which are outside of their core competences and in supporting local production of some inputs, it sets out a general model of linkage development which distinguishes between win–win and win–lose outcomes.

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