Manufacturing and exports are key pillars of SA’s economy, but our global competitiveness is being eroded by lagging technology investment, government policies that are not keeping pace with global shifts, and a shortage of experienced technical skills.
Skills, the right experienced ones, are a vital economic lever, directly linked to industrial outcomes of productivity, efficiency, quality and, ultimately, competitiveness — and thus also critical to addressing SA’s persistent challenges of poverty, unemployment and inequality.
Evidence of SA’s declining manufacturing competitiveness comes from the 2025 Global Competitiveness Index, in which we have steadily declined from a 2017 high of 62.3/100 points to 42 last year, sliding four places down in one year to 64th out of the 69 countries surveyed.
In a separate ranking, the Global Talent Competitiveness Index, which measures countries’ ability to attract, retain and grow human capital — the essential driver of productivity and competitiveness — SA lags again.
Sharply down from 68th position in 2023 to 79th out of 134 countries last year, with a score of 41/100, though we do rank in the top three in sub-Saharan Africa.
SA ranks second-lowest in the world on employability, which measures ease of finding skilled employees, relevance of the education system to the economy, and the level of highly educated people who are unemployed.
A key finding of the report is the importance, in all economies, of “adaptive generalist skills” in encouraging innovation and resilience to navigate the complexities of digital transformation, artificial intelligence, automation, and energy transition in a rapidly shifting geopolitical landscape.
A combination of the right knowledge and experience, and the ability to apply it (technical skills), together with “soft” skills — a positive mindset, adaptability, cognitive flexibility, collaboration, communication, and interdisciplinary problem-solving — are key to achieving competence and driving innovation in the workplace.
Today’s manufacturing environment needs people with a growth mindset; resilient, able to cope with setbacks and rapid change, to collaborate, innovate and learn from others at work.
Employers increasingly find they must train new entrants for these relationship-oriented skills on the job, as well as often having to re-train new graduates for technical skills.
This causes lengthy delays in time to proficiency, which erodes competitive advantage.
Government efficiency — encompassing agility, inclusiveness, and forward-looking policy — is seen in the global competitiveness report as the defining advantage to competitiveness and “the cornerstone of long-term resilience”.
In SA’s context, this highlights how achieving competitiveness is not solely the preserve of individual companies but relies on an enabling environment which can only be created by government policy and actions.
Countries such as Egypt and Morocco are making it clear they want global investments focused on high-tech manufacturing, and research and development for the digital economy.
They have set up attractive special economic zones and aggressive incentive programmes, along with cutting red tape to speed up approval processes and time from investment to operation.
SA’s technology investment incentives are modest by comparison, and strengthening these is essential if we are to encourage capital-intensive manufacturers to raise their competitiveness through technology investment.
This is also essential to protecting local manufacturing, since it is far easier for a global headquarters to shut down an ageing plant and move production to a more conducive location.
Similarly, SA’s special economic zones (SEZs) need to become more “special” and globally competitive, offering comparable incentives to the countries overtaking us.
Manufacturing competitiveness is the cornerstone of a sustainable economy capable of advancing into the digital age.
This doesn’t just require more skills, it requires the right skills.
Skills development must become embedded in industry, not adjacent to it, with the workplace becoming the classroom.
This calls for initiatives such as industry-led training and workplace-integrated learning, facilitated by closer partnerships with education institutions and companies setting up programmes for holiday work and participating in internship and apprenticeship programmes.
Much of this does already happen, but it needs scaling-up, with pace, focus and intra-sector collaborations.
Degrees and diplomas are irrelevant if they are not applicable to what is actually needed in the rapidly changing work environment.
We need greater focus on developing practical, work-relevant skills and the ability to apply them, balancing the soft, generalist skills with specialist technical expertise.
Skills development cannot be a one-off — we need to develop greater capacity within industry for continuous upskilling.
SA has the capacity to strengthen and diversify its manufacturing base, but it requires a deliberate approach and strong execution — aligning policy to protect and incentivise local production and investment, coupled with building industry-ready, transferable skills.
If we can get those elements right together, we can raise our global competitiveness and create both sustainable manufacturing and sustainable jobs.
- Branson Bosman is executive general manager: SA operations at Aspen Pharmacare and skills lead on the board of the Nelson Mandela Bay Business Chamber
