ECONOMIC GROWTH
HILARY JOFFE: Wanted: big thinking for services sector
Part of the problem has been the government, which is a big chunk of the services sector and has been contracting
Speaking in Johannesburg recently at a symposium on inclusive growth, Nobel prize-winning economist Joseph Stiglitz was emphatic that services were the growth sector of the future, not manufacturing, and that this was the case here too. Globally, manufacturing’s share of the economy has fallen from 19% to 15% since 2000. In the US it is even lower, with manufacturing now only 8% to 9% of GDP and employment, but in sub-Saharan Africa, which experienced premature de-industrialisation, manufacturing’s share has been constant at about 11% over the same period. Stiglitz was preoccupied primarily with the horror of the US under Donald Trump, not with the idiosyncrasies of SA’s own economy, and he didn’t put any useful details to his service-sector pitch. But the clear message to sub-Saharan Africa, and to SA, was that we cannot look to East Asian-type export manufacturing-led growth as a model. The region must find a new growth model led by the services sectors, though in Africa, Stiglitz...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.