Machinery and industry: The causes and consequences of constrained development of the South African machine tool industry

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Abstract
It is now widely acknowledged that the machine tool industry has a pivotal role in economic development. A dynamic machine tool industry facilitates both the generation of indigenous technology and the adaptation of imported technology. Technological change is, in turn, central to economic growth and development. Over the last decade or so, the machine tool industries of a number of rapidly industrialising countries have undergone a major and uninterrupted expansion. By contrast, although comparable in terms of output and sophistication at the onset of the 1970s, the machine tool industry in South Africa grew only slowly over the decade, and since early 1982 the industry has declined considerably. This article outlines the principal factors which have so severely retarded the development of the local machine tool industry through a contrast with the Asian NICs where development of the machine tool industry has been especially significant. It is argued that the reasons traditionally advanced for the lack of development of the capital goods sector generally in South Africa, namely the small size of the domestic market and the dependence on imported technologies, are inadequate as an explanation of the plight of the machine tool industry. The argument advanced here is more complex and embraces a number of inter‐related factors. The lack of state support for the machine tool industry and the character of the South African business cycle are of particular importance.