Local economic responses to industrial migration in small towns http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.THE20050000.028.000 Use of the Aluka digital library is subject to Aluka’s Terms and Conditions, available at http://www.aluka.org/page/about/termsConditions.jsp. By using Aluka, you agree that you have read and will abide by the Terms and Conditions. Among other things, the Terms and Conditions provide that the content in the Aluka digital library is only for personal, non-commercial use by authorized users of Aluka in connection with research, scholarship, and education. The content in the Aluka digital library is subject to copyright, with the exception of certain governmental works and very old materials that may be in the public domain under applicable law. Permission must be sought from Aluka and/or the applicable copyright holder in connection with any duplication or distribution of these materials where required by applicable law. Aluka is a not-for-profit initiative dedicated to creating and preserving a digital archive of materials about and from the developing world. For more information about Aluka, please see http://www.aluka.org Local economic responses to industrial migration in small towns Author/Creator Raymond Mfanakhona Bonginkosi Ngcobo Date 2005-00-00 Resource type Theses Language English Subject Coverage (spatial) South Africa Coverage (temporal) 1995-2005 Description A dissertation submitted in partial fulfillment of the requirements for a Doctoral Degree in the Faculty of Human Science, at the University of KwaZulu-Natal. This thesis examines how globalization poses immediate and long-term challenges and opportunities for small towns and, as a consequence, for local economic development policy. The author's perspectives raise vital questions about the shape, substance, and function of small towns in an increasing interdependent and competative global economy. The thesis provide both retrospective and prospective insight into the ways in which poverty, industrial migration, economic globalization and technological innovation affect public-sector choices for small towns approaching the turn of a new century. Format extent 234 pages (length/size) http://www.aluka.org/action/showMetadata?doi=10.5555/AL.SFF.DOCUMENT.THE20050000.028.000 http://www.aluka.org LOCAL ECONOMIC RESPONSES LOCAL ECONOMIC RESPONSES TO INDUSTRIAL MIGRATION IN SMALL TOWNS Raymond Mfankhona Bonginkosi Ngcobo Submitted in partial fulfillment of the requirements for a Doctoral Degree in the Faculty of Human Sciences, Universirty of KwaZulu-Natal "To Mukile Winie Ngcobo, my late grandmother for her contribution to my life. May her soul rest in peace" TABLE OF CONTENTS TABLE OF CONTENT i ABSTRACT ix ACKNOWLEDGEMENT xi DECLARATION xii LIST OF FIGURES xiii LIST OF TABLES xiv LIST OF APPENDICES xv CHAPTER 1: INTRODUCTION 1 1. 1 Background 1 1.2 The Study Objective 2 1.3TheResearchfocusandhypothesis 3 1.4TheResearchquestions 4 1.5 The Applicability of location theory in the study of economic decline 5 1.6Defininglocaleconomicdevelopment 7 1.7Methodologyofcasestudies 8 1.8 Gloomy perspective 8 1.9Reflectionsonsomekeyfindings 9 CHAPTER 2: THEORETICAL FRAMEWORK 11 2.1 Introduction 11 2.2 Classical perspectives on industrial migration 13 2.3 Comparative analysis of classical location theories 15 2.4 Comparative analysis of classical industrial migration theory 17 CHAPTER 3: THE RESEARCH HYPOTHESIS 19 3.1 Introduction 19 3.2 Problem statement 20 3.3Thehypothesis 21 CHAPTER 4: GLOBAL ECONOMIC INTEGRATION AND ITS EFFECTS ON THE LOCAL ECONOMY 26 4.1 Introduction 26 4.2TheAfricanGrowthandOpportunitiesAct 28 4.3ApparelandTextilePreferences 29 4.4 Eligibility review factors 29 4.5 Custom related eligibility determinations 30 4.6ExpansionprocessforAGOAbeneficiaries 31 CHAPTER 5: METHODOLOGICAL FRAMEWORK 32 5.1 Introduction 32 5.2 Sampling technique - How the case studies were selected 33 5.3 Ethnographic orientation of this thesis 34 5.4 Research Methods 37 5.5 Generic problems encountered 39 5.6Reliabilityandvalidityconsiderations 39 5.7Avoidingtheresearchereffect 40 5.8 Orientation effect 41 CHAPTER 6: HISTORICAL OVERVIEW OF THE DEVELOPMENT OF INDUSTRIAL POLICY IN SOUTH AFRICA 43 6.1 Introduction 43 6.2 Manifestation of the apartheid strategy in small towns 44 6.3 Link between industrial decentralization and apartheid policies 45 6.4 The economic and political aims of the industrial decentralization strategy 47 6.5 Constitutional back-up to industrial development strategy 50 6.6 Concluding remarks 51 CHAPTER 7: CASE STUDIES 52 7.1 Introduction 52 7.2 Case study 1: KwaDukuza / Stanger 53 7.2.1 Socio-economicdemographyofKwaDukuza 53 7.2.2 Local economic development responses in KwaDukuza 54 7.2.3 Labour market elasticity in KwaDukuza 58 7.2.4 Technological changes in KwaDukuza 60 7.3Casestudy2:Ixoporegion 62 7.3.1 Socio-economicoutlookofthearea 62 7.3.2 Industrial development context in Ixopo 64 7.3.3 The nature of economic decline and industrial migration 65 7.3.4 Lbour market elasticity 66 7.3.5 Technological changes and its impact on the local economy 67 7.4Casestudy3:DundeeandtheCoalRim 70 7.4.1 Socio-economic demography 70 7.4.2 Investment marketing as local response to economic decline 72 7.4.3 The formation of Chinese industrial clusters 73 7.4.4 Labour market elasticity 74 7.4.5 Geographic pooled labour markets for specialized nationalities in the study area 75 7.4.6 Technological changes and the resultant capital mobility 77 7.5Casestudy4:HowickandtheMidlands 79 7.5.1 Socio-economicoutlookofthearea 79 7.5.2 Local industrial development interventions 81 7.5.3 Promotion of lead industries 82 7.5.4 Promotion of employment intensive industries 82 7.5.5 SMME development interventions in Howick 83 7.5.6 Labour market elasticity 85 7.5.6 Technological changes and their impact in the local economy 86 7.6 Case study 5: Pinetown and the Inner West of Durban 88 7.6.1 Introduction 88 7.6.2 The nature of industrial mobility and business growth patterns 89 7.6.3Labourmarketelasticity 90 7.6.4Thelocalrealwagebill 91 7.6.5 Local economic interventions in Pinetown and the emergence of local growth partnerships 91 7.6.6 Changing perceptions on the role of labour 93 CHAPTER 8: HOW COMPETITIVE ARE SMALL TOWNS? COMPARATIIVE ANALYSIS OF LOCATIONAL COMPETITIVENESS OF SMALL TOWNS 95 8.1 Introduction 95 8.2Competitivenessanalysis 97 8.3Comparativenessindex 100 CHAPTER 9: FACTORS AFFECTING INDUSTRIAL MIGRATION IN SMALL TOWNS - KEY FINDINGS 102 9.1 Introduction 102 9.2 Technological change and industrial migration 102 9.3 The role of business mergers in industrial migration 105 9.4 Mergers and acquisitions in KwaZulu- Natal: case overview 108 9.5 Types of mergers from April 2001 - March2002 109 9.6 Cases overview 112 9.6.1 The case of Basfour 2488 (Pty) Ltd and KwaZulu-Natal Transport (Pty) Ltd 112 9.6.2 The Case of Mondi Ltd and Kohler Cores and Tubes 113 9.6.3 The case of Unilever South Africa and Robertson's foods 114 CHAPTER 10: LOCAL ECONOMIC RESPONSES TO INDUSTRIAL MIGRATION 116 10.1 Introduction 116 10.2TheoreticalframeworkforLEDanalysis 117 10.2.1 The economic base theory (demand side approach) 118 10.2.2 Local comparative advantage (supply side approach) 119 10.3 LED in the context of globalization 120 10.4 Approachestolocal economicdevelopment 125 10.5 Critical analysis of the impact of LED in small towns: the 'gloomy' perspective 127 CHAPTER 11: PATTERNS OF LOCAL ECONOMIC INTERVENTIONS IN KZN 134 11.1 Introduction 134 11.2 Small and Medium Enterprise (SME) development as an LED strategy 134 11.3 Small business development as an LED strategy: the broad perspective 137 11.4 Defining entrepreneurship: who are the SMMES? 137 11.5 The effectiveness of SMMEs in job creation: findings 138 CHAPTER 12: BUSINESS RETENTION AND EXPANSION INITIATIVES AS LOCAL RESPONSE TO INDUSTRIAL MIGRATION 140 12.1 Introduction 140 12.2 BRE as a strategic approach to local economic development 141 12.3 The significance of business retention and expansion in small towns 142 12.4 The modus operandi of BRE 143 12.5ComparisonofthetwoBREapproaches 145 12.6 The impact of BRE programmes in declining localities 147 12.7 Critical success factors for BRE 150 12.7.1Resourcesandsupportmeasures 150 12.7.2 Discovering business needs and concerns 151 12.7.3 Data analysis and action plans 152 12.7.4 Linking resources to plans 152 12.7.5 Follow ups 152 12.7.6 Development of policy and support measures 152 12.8 Lessons from case studies 153 12.9 Pre-packagedresources 153 12.10 Local BRE capacity building in KwaDukuza and Pinetown 153 CHAPTER 13: EARLY WARNING SYSTEMS AS A PROACTIVE RESPONSE TO ECONOMIC DECLINE: LESSONS FROM THE PINETOWN SURVEY 155 13.1 Introduction and background 155 13.2 The role of labour in the development of early warning systems 156 13.3 Methodology of early warning systems development 157 13.4 Key findings from Pinetown 158 13.4.1 Sustainable economic growth indicators 158 13.4.2Securityoftenureinthelocal economy 158 13.4.3 Discovering business concerns about the area 159 13.4.4 Business status of firms located in the area 159 13.4.5 Pinetown as a hub for export related businesses 161 13.4.6 Productivity and competitiveness of local firms 162 13.4.7 Envisaged relocation plans 164 13.4.8 Availability of raw material 164 13.4.11 Nature of assistance requested from local government 165 CHAPTER 14: PLACE MARKETING AND INVESTMENT PROMOTION AS A LOCAL RESPONSE TO INDUSTRIAL MIGRATION IN THE CONTEXT OF SMALL TOWNS 166 14.1Introduction 166 14.2 Organizational