Jasper L. Steyn

South Africa government's support of the automotive industry: prospects of the productive asset allowance

In 2000 the South African Government introduced an investment incentive for the automotive industry, the Productive Asset Allowance (PAA). This was intended to support the objectives of the Motor Industry Development Programme (MIDP). This paper presents an empirical assessment of the PAAs prospects for supporting the competitiveness of South Africas automotive industry. It provides a historical overview of the MIDP and the introduction of the PAA and analyses industry performance data on investment and competitiveness from 1998 to 2004. The findings reveal that while the industry succeeded in increasing exports, the share of domestically produced vehicles in the local market decreased. Moreover, investment in R&D, as an indicator for future competitiveness, was insignificant. The offer of a generic investment incentive like the PAA seems to have a significant and positive effect on industry investment, but limited ability to support long-term industry competitiveness through R&D and innovation.

Sustaining automotive industry growth in South Africa: A review of the first five years of the Motor Industry Development Programme

This article traces the causes of tension among stakeholders in carrying forward the MIDP from a historical perspective. It reviews the genesis of the programme and industry performance under the dispensation. Achievements and shortcomings made in the first five years of the MIDP are highlighted. The article argues that to sustain industry gains made in the first five years of the MIDP and to avoid tension among stakeholders arising from the uneven industry performance, a new consensus that specifies weights to be attached to each of the programme objectives has to be developed. This did not happen in 2000 and so the tension within industry interest groups continues.

Creativity and 'eureka' in science and engineering

Creativity theory started out on a scientific basis at the beginning of the 20 th century; but then the scope broadened and inquiry became more multidisciplinary. In this article it is shown how the current demand for creativity in science and engineering grows faster than the understanding of it. As a result, the broad definition of ‘creativity’ is refocused on science and engineering by considering its evolutionary roots. Based on an overview of the work of scientists and engineers, a unified theoretical framework for creativity is proposed, and the systemic approach to awareness and creativity is affirmed. This approach – the theoretical framework and the core of current creativity knowledge – is then used to derive a fresh layer of theory that is anchored in the literature and industrial experience. OPSOMMING Die teorie van kreatiwiteit het by die aanvang van die vorige eeu op ’n wetenskaplike grondslag begin. Die bestek het toe uitgebrei en mettertyd meer multidissipliner geword. In hierdie artikel word getoon hoedat die hedendaagse vraag na die kreatiwiteit van wetenskaplikes en ingenieurs vinniger groei as die begrip daarvan. Die bree kreatiwiteitsdefinisie word, gevolglik, opnuut gefokus op wetenskap en ingenieurswese deur die evolusionere wortels daarvan te beskou. Gebaseer op ’n oorsigtelike beskrywing van die werk van wetenskaplikes en ingenieurs, word ’n verenigde raamwerk vir kreatiwiteit voorgestel, en die sistemiese benadering tot bewussyn en kreatiwiteit word bevestig. Hierdie benadering – die teoretiese raamwerk en die kern van huidige kennis oor kreatiwiteit – word dan gebruik om ’n vars teoretiese laag af te lei wat in die literatuur sowel as in nywerheidservaring geanker is.

Modelling effects of incentives for industry competitiveness using a system dynamics approach

Investment in the state of art machinery, tooling, and R&D is widely seen as a prerequisite for achieving industry competitiveness in the long term. Therefore, the provision for investment-based incentives by countries is perceived as a way of supporting industry competitiveness. Despite this being a global phenomenon, there is no formal process to guide the offer of industry incentives. The process of designing such incentives is often based on intuition rather than on formal models, making it difficult to assess such industry interventions objectively and to improve on them. Specific to South Africa, the offer of incentives to the automotive industry to support its competitiveness has had mixed results. In particular, investment in R&D has remained minimal. The paper presents a system dynamics model as a proposed instrument in formalising the offer of incentives, applied to the South African governmentpsilas offer of incentives to the automotive manufacturing sector. The model was developed from qualitative and quantitative information on how the incentive dispensation had been structured. Simulations with the incentive model reveal that the incentive dispensation, as a stand-alone intervention, has had a significant and positive effect on industry investment, but has had no specific policy lever to direct investment into R&D and consequent innovative activities. By this measure, the model has not been a strong policy instrument for supporting long-term industry competitiveness.

Evaluating a Potential Dominant Design for Selective Catalytic Reduction of NOx in Light Diesel Vehicle Exhaust Gas

The potential was investigated for selective catalytic reduction technology developed by a major catalytic converter manufacturer to become the dominant technology for light diesel vehicle catalytic converters. The dominant design framework was used to analyze the potential for major change in the industry. A new dominant design enhances the market share of the innovating entity, while disrupting the businesses of competitors and suppliers. The technology, developed by Johnson Matthey, replaces platinum group metals with copper and iron as catalysts, without the need to add reducing agents such as urea. It offers significant cost and performance benefits over competing systems in a substantial global market segment. The case study method was used, employing public domain documentation and structured questionnaire interviews of engineers, chemists and technologists of Johnson Matthey in England, Japan and South Africa. It indicated that the companys selective catalytic reduction technology does offer significant cost and performance benefits over known competing technologies. It has the potential to become the dominant technology in removing NOx from light vehicle diesel engine exhaust gases. Regarding technology management it was found that the innovation was directed at meeting regulatory imperatives and resulting demand from established customers rather than to achieve a dominant design.

Decision factors for locating in an automotive supplier park: A South African case

Decision factors for automotive suppliers to locate in an automotive supplier park were investigated. This was done in the particular context of a developing country and of supply to multiple vehicle manufacturers (OEMs). Decision factor constructs for automotive suppliers to locate in automotive supplier parks were identified from literature, but in the context of developed countries and of supply to a single OEM. A comprehensive construct from literature was tested with suppliers located in the first automotive supplier park (ASP) in South Africa to establish to which extent their decision factors corresponded to those of their counterparts in developed countries. The research design was that of an exploratory case study. It was found that the decision factors from literature were applicable and sufficient for the developing country multiple-OEM context but that the context caused distinct differences in the logistics service provider structure of the park tenants and the ranking of decision factors to locate in the park.

Customer familiarity with new industrial product technology and its influence on adoption: the case of De Beers diamond extraction equipment

An investigation was conducted into the influence of industry customers’ familiarity with new technology on their decisions when purchasing discontinuous industrial products. This was done in the context where the supplier and customer organisations are entities in the same company. Even in this favourable context, continuous products remained successful despite a better solution being available. Literature on this close type of relationship is sparse, mostly because information on such internal processes is generally regarded as competitive. The case investigated was the DebTech division of De Beers, and their experience with products that they design and manufacture for the global diamond mining industry. Product developer and customer data from applicable projects was analysed, and interviews and observations were conducted. The results indicate that familiarity with the product technology favourably influences perceptions of newness, safety, and the ease of integration of a product. Familiarity increases customers’ propensity to recommend and purchase new-technology products. OPSOMMING Die invloed is ondersoek van vertroudheid met nuwe tegnologie op nywerheidskliente se aankoopbesluite van diskontinue nywerheidsprodukte. Dit is gedoen in die konteks waar die verskaffer- en klientorganisasies entiteite in dieselfde maatskappy is. Selfs in hierdie gunstige opset is ervaar dat kontinue nywerheidsprodukte meer verkoop, al is ’n beter oplossing beskikbaar. Literatuur oor hierdie tipe verhouding is skaars, hoofsaaklik omdat inligting oor sodanige interne prosesse normaalweg as mededingend beskou word. Die geval is ondersoek van die DebTech-afdeling van De Beers se ervaring met produkte wat dit vir die internasionale diamantmynbedryf ontwerp en vervaardig. Produkontwikkelaar- en klientdata van toepaslike projekte is ontleed, aangevul met onderhoude en waarnemings. Die resultate toon dat kliente se vertroudheid met die produktegnologie hulle persepsies van nuutheid, veiligheid, en integreerbaarheid van nuwe-tegnologieprodukte gunstig beinvloed. Tegnologievertroudheid verhoog hulle geneigdheid om nuwe-tegnologieprodukte aan te beveel en te koop. a a a a a a a a a a a a

Modeling Effects Of Incentives For Industry Competitiveness Using A System Dynamics Approach

Investment in state of the art machinery and tooling and in R&D is widely seen as a prerequisite for achieving industry competitiveness in the long term. Investment-based incentives that countries provide for these inputs are perceived as a way of supporting industry competitiveness. Despite this being a global phenomenon, there is no formal process to guide the offer of these incentives. The process of designing such incentives is often based on internalized judgment rather than on formal models making it difficult to assess such interventions objectively and to improve on them. Specific to South Africa, the offer of incentives to the automotive industry to support its competitiveness has had mixed results. In particular, investment in R&D has remained minimal. The paper presents a system dynamics model as a proposed instrument in formalizing the offer of incentives, applied to the South African governments offer of incentives to the automotive manufacturing sector. The model was developed from qualitative and quantitative information on how the incentives had been structured. Simulations of the model reveal that the incentives model, as a stand-alone intervention, had a significant and positive effect on industry investment, but had no specific policy lever to direct investment into R&D and subsequent innovative activities. By this measure, the incentives model has not been a strong policy framework for supporting long-term industry competitiveness.

Industrial policy, technology and the future of automotive manufacturing in South Africa

Using selective industrial policy, South Africa succeeded in re-integrating its previously protected automotive manufacturing industry into the global value chain. In the period 1995 to 2006, the industry experienced significant growth in both vehicle production and exports. Despite these successes, the future of automotive manufacturing in South Africa, as in most other developing countries, is not certain without continued government incentives. The paper presents an assessment of South Africas automotive industry support model in terms of sustaining domestic manufacturing, using a qualitative system dynamics model. A key finding is that the industrial policy did not sufficiently take into account systemic interdependencies and feedback effects within the industry that influence intended outcomes. Technology and innovation were not given prominence in the policy formulation and implementation process. It is concluded that to put South Africas automotive manufacturing industry on a sustainable growth path, the selective industrial policy has to be complemented with a technology policy.

Concurrent engineering and the automotive supplier industry in South Africa

The prevalence and primary characteristics of concurrent engineering between clients and suppliers in the South African automotive component manufacturing industry was investigated. The global trend towards Follow Source and Follow Design has had a detrimental effect on locally owned automotive supplier companies in developing countries such as South Africa. It was proposed that the effective use of concurrent engineering would facilitate the integration of locally owned automotive component suppliers in developing countries into the global supply chain. A literature survey into the automotive component supplier industry in both developed and developing countries showed that an understanding of the requirements and challenges facing the industry was essential for the successful implementation of concurrent engineering. A research questionnaire was developed and targeted at automotive component suppliers in the Eastern Cape province of South Africa. The questionnaire was focused on the key areas determined in the literature survey. These were; people and structure, tools for implementing concurrent engineering and the relationship between OEMs and suppliers. The research indicated that there was an association or tendency towards an association between: ldr Company size and the prevalence of e-procurement within organisations. This was assumed to be due to the fact that larger companies formed part of bigger supply chains. ldr Company size and companies which actively participated in R&D.