Industrial policy is a key avenue for the post-apartheid South African state to overcome the threats of social unrest and promote economic development. Although globalisation presents Third World countries with significant opportunities for sustained industrial development, it is critically important to underscore the impulses that undermine it through an examination of the manner in which technology is transferred from the industrialised to the developing countries. The indiscriminate adoption of a neo-liberal economic programme in South Africa has had a negative impact on sustainable growth and has given way to deindustrialisation and a rentier economy. This paper suggests that an endogenous approach — one that emphasises the unique factors of the spatial milieu in which economic activity occurs — paired to a recognition of the embeddedness of this milieu within larger structures is a more suitable paradigm for stirring sustainable growth. State intervention is not an impediment but a precondition for a flexible and responsive industrial policy in an increasingly globalised world economy.
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