The Money Show’s Bruce Whitfield interviewed Dr Lyal White, Director at the Centre for Dynamic Markets at the Gordon Institute of Business Science (Gibs).
White reckons South Africa can take the following five lessons from Mexico on how to rejuvenate our manufacturing sector:
Mexico proved that manufacturing does not have to be a race to the bottom of the cheap wage pile.
Innovative approaches to higher end/value added products have started driving Mexican exports.
Examples of this include the growth in Mexican vehicle manufacturing (unlike the relatively stagnating industries in Brazil and South Africa), innovative technology parks, etc.
An effective trade policy trumps industrial policy.
Mexico is making real progress toward openness and connectedness – internally, regionally and globally.
It has the most trade agreements of all countries.
Everything changed for Mexico about 21 years ago when they signed the North American Free Trade Agreement (Nafta).
Mexico chose the right agreements and partners.
Mexico has invested heavily to increase competitiveness and seems “unstoppable”, according to a prominent economist based in Mexico City.
Scroll down for quotes from the audio below.
Mexico is now the 6th largest car manufacturer in the world.— Dr Lyal White
Mexico produces a lot of semiconductors— Dr Lyal White
Mexico aligns itself very effectively.— Dr Lyal White
The tipping point came in 2000. There was a refreshing shift in politics.— Dr Lyal White
Mexico realises that the capital they need to drive manufacturing must come from abroad.— Dr Lyal White
Mexico integrated into a North American grid.— Dr Lyal White
Manufacturing is about adding value and accessing markets.— Dr Lyal White
This article first appeared on 702 : 5 lessons Mexico can teach South Africa about reviving manufacturing