The Paradox of Learning-by-doing in South Africa’s Industrial Sector: Industrial revival of a once-thriving sector vs launching a new one

Abstract

This study evaluates whether South Africa’s industrial strategy should prioritise revitalising legacy sunset manufacturing industries or investing in emerging sunrise sectors. It is framed by heterodox growth theories drawing on structuralist and mission- oriented insights to analyse the paradox of learning-by-doing. The paradox of learning-by- doing in the context of manufacturing revival and global competitiveness is that countries must produce at scale to build skills and efficiency, yet rising global competitors already operate at such scale that new entrants struggle to start. In essence, you need experience to compete, but you can’t gain experience without already being competitive, trapping latecomers in a cycle that may prevent them from catching up. Under this lens, accumulated production experience does not automatically translate into competitiveness. A comparative analysis of mature industries (steel, furniture, clothing and textiles) versus new sectors (renewable energy) highlights how historical capabilities interact with structural constraints. Findings show that legacy sectors retain valuable know-how but face intractable constraints: outdated technology, scale disadvantages, and fragmented firms limit productivity. Findings show that legacy sectors retain valuable know-how but face intractable constraints: outdated technology, scale disadvantages, and fragmented firms limit productivity. For example, South Africa’s once-thriving steel industry remains uncompetitive as small domestic mills lose ground to large-scale foreign producers. Similarly, the furniture sector still possesses a deep skills base yet demand collapse and low-cost imports have eroded its competitive edge. In emerging sunrise sectors like renewable energy, huge investments have built capacity, but productivity gains have lagged expectations. Analysts attribute this to fragmented policy and a lack of coordinated learning infrastructure. These patterns underscore that automatic, market-driven learning alone is insufficient. The policy implication is a mission-oriented manufacturing ecosystem combining active state leadership with private-sector innovation. Such an approach can reconcile short-term competitiveness goals with long-term capability-building and resilience