Bard College Berlin News
Development and globalization in South Africa: Dr. Tobias Wuttke researches automotive industry changes
Locally-produced Ford Ranger, Johannesburg, South Africa © Tobias Wuttke
His September 2023 paper “The South African auto industry in a world of GVCs: lead firm sourcing strategies and local supplier development,” co-authored with Dr. Lorenza Monaco in the International Journal of Automotive Technology and Management, investigated the benefits that developing and emerging economies like South Africa can derive from participation in the global automotive supply chain. Drawing from the same fieldwork, Wuttke also published “Global Value Chains and Local Inter-Industry Linkages: South Africa’s Participation in the Automotive GVC” in The Journal of Development Studies, which focused on how the dynamics of the automotive GVC have affected domestic linkage building in the country.
Wuttke first became interested in researching the auto industry in South Africa when he noticed that despite being located so far away from Europe, the nation “managed to competitively produce and export such a high number of vehicles for the European market.” He explains, “The usual tendency in the automotive industry is that production happens close to the final market. Where ‘offshoring’ of production happens, it usually happens to nearby countries like Mexico in the case of the North American market, or Eastern Europe and Turkey in the case of the Western European market. So how can a country at the very south of the African continent be competitive?”
The answer, he found, lies in the “generous investment incentives and import tariff reductions that the South African government hands out to foreign carmakers and component producers that settle down in the country and produce for exports.” However, he notes that despite generating more than 100,000 jobs and resulting in increased foreign exchange earnings for South Africa, “These policies are often criticized for being too generous and for benefiting the foreign firms more than the local economy.”
“South Africa is a fascinating country,” says Wuttke. “It is one of the most unequal countries in the world in terms of wealth and income, which is visible everywhere you go. It is also visible in the automotive industry, where you tend to see white people in management and black people on the factory floor. Although, this is changing slightly with the Broad-Based Black Economic Empowerment (BBBEE) legislation.”
Wuttke is currently teaching the course Globalization, Development and Industrial Policy at BCB, which tackles questions of economic development, industrial policy, and global value chains. Drawing on his extensive research, he notes that referring to real-life examples has strengthened his teaching and allows him to introduce more specific case studies to students. For example, Wuttke is currently part of a research project on geographical reconfigurations of global production networks in a post-COVID-19 global economy (funded by the German Research Fund, 2023 to 2026)—which is also the project that brought him to BCB.
“I have taught in other places before,” Wuttke states, “but I am really positively surprised by the level of engagement and participation of students here. Students come prepared, ask a lot of questions, and seem to really care about the issues that we are discussing. We are having discussions and conversations rather than me just lecturing. I find this very enjoyable.”
To learn more about broader changes in the global economy—such as developing nations’ participation in global value chains, along with climate change and the greening of production—Wuttke suggests listening to the recent podcast episode of Business in Development he was featured in.
By: Sophia Paudel, Bard College Berlin Communications
Post Date: 11-13-2023