Paper short abstract:

Drawing on primary research, this paper analyses how evolving organizational and sourcing patterns in mining GVCs have affected the competitive position of the South African mining inputs cluster and discusses key strategic responses by local firms to these shifting governance dynamics along the VC.

Paper long abstract:

The mining equipment sector is the most relevant and technologically sophisticated segment of the South African specialized machinery industry. However, while still representing an advanced pocket of excellence, during the last decades the mining inputs cluster has experienced a decline in global competitiveness, reflected in increasing market dominance by few multinationals with limited local manufacturing footprint and in significant imports along all stages of the VC. Against this background, and building on over 40 interviews with industry representatives, this work provides evidence of the domestic bottlenecks and global dynamics that have been responsible for the ongoing marginalisation of South Africa as a strategic location for production and innovation of mining-related technologies. Specifically, by combining the literature on firms capabilities with insights from the GVCs and the international business lines of research, this paper develops along three directions. Firstly, in an attempt to open the black-box of governance in GVCs, it examines the evolving procurement strategies of key players along the mining GVC, and its shifting organizational patterns, driven by tremendous processes of consolidation and concentration among large multinationals on one side and, on the other side, by the entry of new major actors, particularly from China. Secondly, it looks at how these dynamics can constrain growth and upgrading of local equipment manufacturers, although highly technologically qualified. Thirdly, through 5 qualitative firm case studies, it identifies the main set of strategies adopted by local players to respond to these shifting VC dynamics, discussing in-depth their business models and capabilities.

Paper short abstract:

This paper presents findings from a survey of the textiles and apparel sectors of Tanzania and Kenya, with a particular focus on how upgrading and other outcomes vary in relation to the types of value chains in which firms participate at the national, regional and global levels.

Paper long abstract:

The framework of upgrading in value chains provides a useful way to conceptualise firm and sector performance, yet the literature has been excessively focused on global value chains (GVCs) to the neglect of regional value chains (RVCs) and national value chains (NVCs). With increased uncertainty in global trade, a gradual shift in demand dynamism from North to South and concerted efforts towards regional integration among developing countries, there is a heightened need for studies to unpack the implications of firm engagement with different value chains.

This paper presents the findings of a firm survey in the textiles and apparel (T&A) sectors of Tanzania and Kenya. Unlike previous T&A sector studies in sub-Saharan Africa, the survey was designed to capture firm engagement with and upgrading in multiple value chains and end markets. Furthermore we 'unbundle' the usual packages of functions found in the T&A literature (CMT, FOB, OBM, etc.) to explore how firms perform different functions in different value chains.

We find significant variations in firm performance in relation to value chain orientation. Upgrading outcomes are presented in terms of functions, products, processes and end markets, and other important outcomes on employment, local content and capacity utilisation are discussed. The findings point towards the development of smart industrial policies which do not rely on a single value chain type, but strategically combine the benefits of NVCs, RVCs and GVCs over time for the development of productive capabilities.

Paper short abstract:

This study compares the tuna industries of Thailand and Ghana to identify the basis for the differences in performances of their firms in the global tuna value chain. The study discusses how the tuna chain influences the structural transformation drive of the countries, particularly Ghana.

Paper long abstract:

This study examines how tuna firms in Ghana and Thailand that are part of global value chains, have responded to local and global conditions to enhance their technological capabilities. The motivation behind this study is to move the debate beyond the current question of whether or not integrating into GVCs affects a firm's technological capabilities to look more intensely at the conditions which favour the promotion of the capabilities of firms in GVCs. Additionally, how GVCs are connected to structural transformation in developing countries is discussed by looking at linkages between involvement in tuna value chains and the local economy. The analysis is situated within the framework of the structural transformation programmes of the individual countries and as such, the study throws more light on Ghana's current framework, exposing the challenges that stifle it.

The canned tuna industries in both Thailand and Ghana are compared using primary data gathered from fieldwork in Ghana and secondary data from several sources including company websites and reports of the tuna firms, government agencies and existing research.

The results demonstrate how the ability of firms in developing countries to enhance their global competitiveness relative to GVCs is signficantly linked to the quality of local conditions in their country.

Paper short abstract:

Rwanda has successfully entered into global specialty coffee markets and raised its coffee selling price comfortably above international prices. This was made possible by a transformation of coffee-processing initially driven by the government, but led more and more by the private sector.

Paper long abstract:

Coffee-processing in Rwanda has been transformed from producing exclusively semi-washed, low-quality coffee selling below international prices in the early 2000s into exporting 64% of coffee as fully-washed, of which 75% qualifies as specialty coffee in 2019, resulting in an average mark-up of 0.8 USD/kg over New York C prices in 2018.

While initiation and early adoption of constructing coffee wet mills was driven by the government, donors, and cooperatives, some Rwandan private entrepreneurs did play a substantive role. When the transformation gained speed around 2010, it was largely driven by both international and Rwandan firms. As of 2019, 301 wet mills have been built all over the country. The current phase of professionalization and upgrading is led by the larger companies and include increasing the percentage of exported coffee following various certification standards, raising productivity in wet mills, and operating more ecologically.

This contribution is based on several months of fieldwork in Rwanda in 2019 and 65 semi-structured interviews with government officials responsible for coffee policy, leaders of coffee cooperatives, coffee farmers and all major coffee exporters of whom most are vertically integrated into coffee-processing. While there is still a long way to go until Rwanda can compete with regional coffee powerhouses such as Ethiopia and Kenya, this piece illustrates how the country transformed its coffee-processing and entered global markets of specialty coffee, enabled by a quite effective cooperation between the state and firms, and how business leadership is currently pursuing further accumulation and production transformation.

Paper short abstract:

This paper explores the particular entrepreneurial capabilities displayed by successful firms in the food processing equipment subsector as a case study of capabilities of manufacturing firms in developing countries.

Paper long abstract:

While a fair amount of research has identified the constraints faced by African manufacturing firms, few studies have examined the strengths of African firms. Kenya's manufacturing sector, though small by international standards, is home to a number of successful firms owned and/or managed by capable entrepreneurs. This paper explores the particular entrepreneurial capabilities displayed by successful firms in the food processing equipment subsector. The discussion of Kenya's equipment firms rests on a model of enterprise development that takes as a starting point the resource-based view of the firm. It draws heavily on literature that considers capabilities as resources that make one firm differ from another. The study's research design combines a survey of 19 food processing equipment firms with four qualitative case studies that provide an in-depth understanding of entrepreneurial capabilities and their relationship to firm success. An overwhelming majority of firms attribute their success to the vision and leadership of the entrepreneur. The case studies revealed qualities such as flexibility, adaptability, and resilience to be key entrepreneurial capabilities required by firms in this sector. The paper highlights unique capabilities of equipment firms, including the ability to design products and processes. The paper largely upholds the resource-based view of the firm, but finds firms' perspectives on capabilities to be more differentiated than expected from the resource-based view. In particular, the findings emphasise the 'softer' capabilities of entrepreneurs, which are evident in the knowledge-based version of resource-based view. The paper concludes with some implications for theory, policy, and further research.

Paper short abstract:

Growth of the Nigerian digital economy is driven by adaptation of foreign technologies to mitigate bottlenecks and address local problems. This paper documents leadership actions taken by digital economy sector leaders in Nigeria to achieve these aims, highlighting their successes and failures.

Paper long abstract:

The Nigerian digital economy emerged prior to significant development of manufacturing industries. This divergence from the normal pattern of structural change fuels a 'leapfrog narrative' that obviates the need for developing industrial capacity. The debate on the likelihood of service-led growth, spearheaded by the digital economy, is a lively one, especially across Africa. However, firm-level evidence about the drivers and dynamics of said growth is limited and little is known about cross-sectoral diffusion and application of these technologies.

This paper presents a case study of the growth trajectory of the Nigerian digital economy, documenting actions taken by sector leaders to overcome local challenges and highlighting successes and failures recorded. An investigation of the digital economy in Nigeria points to economic liberalisation, on the prompting of International Finance Institutions, and subsequent government policy actions as key growth drivers. However, these macro-level drivers act in combination with bold micro-level actions taken by the leadership of digital firms in Nigeria.

In the absence of a supportive business or regulatory environment, innovative actions are taken by firm leadership to develop digital solutions which adapt foreign technologies to address local needs. Most importantly, these solutions mitigate infrastructure or 'analogue' bottlenecks in the local environment. Bottlenecks include limited last-mile delivery infrastructure, non-existent product distribution networks, poorly skilled human capital and irregular power supply. Given the lack of cross-sectoral demand-pull dynamics, these indigenous innovations have been limited to a few sectors, mainly financial services. The paper concludes by drawing broader lessons and implications on digitalisation across Africa.

Paper short abstract:

Conglomerates are a specialised unit, encompassing inter-linked, economic activities, organised to complement the overall operation of the entire business. This article focuses on the evolution of Tanzania's top 5 conglomerates within a specific framing called 'Regimes of capitalist accumulation'.

Paper long abstract:

A conglomerate's operation, productive capacity and ability to innovate, in essence, 'as a sum, which is greater than its parts' is contingent on a variety of contingent on a variety of contextual factors and, even within the same political settlement, different 'conglomerates models' may emerge. While the experience of East Asian conglomerates have been widely studied, little is known about conglomerates in Africa, their emergence and different patterns and models of capitalist accumulation.

This article focuses on the emergence and evolution of Tanzania's top 5 conglomerates within a specific framing called 'Regimes of capitalist accumulation'.

Regimes of capitalist accumulation identify different 'mechanisms of rents allocation'(and their related policies, regulations and processes) which allowed conglomerates to initiate their businesses in early stages of industrialisation and, over time, to consolidate operations and diversify in related and unrelated sectors. Each regime followed a distinct pattern, building on certain existent legacies as well as constructing new mechanisms for capitalist accumulation. These regimes not only enabled conglomerates to have precedence over other businesses as 'market makers' and 'rents extractors', they also continue to define their contemporary characteristics and distinct business models.

Within the 'Regimes of Capitalist Accumulation' framework, the paper will track the experience of 5 major groups, and how they have been responding, shaping and adapting to these different regimes and the productive and unproductive use they have made of these rents over time.