Global market access in the Internet era: South Africa’s wood furniture industry

Abstract

The importance of global connectivity for Third World producers has recently come under intense academic scrutiny in the value chain literature in development studies. However, global value chain analysis seldom mentions the importance of the Internet in facilitating and enhancing the access of Third World manufacturers to developed country markets. This paper attempts to bridge this gap in the literature by exploring the link between Internet connectivity and access to global markets, and uses the South African wood furniture sector as a case study. E-commerce technologies are becoming increasingly important for South African wood furniture producers as they are integrated into global value chains and exposed to the demands of more sophisticated markets. Failure to adopt e-commerce technologies on the part of wood furniture producers could lead to them becoming increasingly marginalized from the international markets that they wish to supply. The paper articulates a number of policy recommendations to promote greater diffusion of e-commerce technologies in the wood furniture sector.

The Strategic Relevance of Technology-Related Variables to the Competitiveness of Small - To Medium-Sized Furniture Manufacturers

“…Furniture accounted for 3.5% of the total manufacturing employment and 2.7% of the total manufacturing exports for SA between 1995 and 1999 [5]. Exports in furniture sales grew from less than 5% in 1992 to over 40% in 1999, which exceeded the export/sales ratio in the South African manufacturing sector as a whole.…”

“…Moodley [5] postulates that small furniture businesses are important from a development perspective, owing to their potential for economic growth, job creation, and black economic empowerment.…”

An integrated approach for developing a technology strategy framework for small- to medium-sized furniture manufacturers to improve competitiveness

“…The SM/FMs must also be able to recognise the effect of a technology acquisition on the complete value chain. No new technology application will operate in isolation, and so the technologies that are suitable for specific areas of the value chain with the most impact on the business strategy must be selected [34,5,2].…”

“…Investments in people and machinery should be made, along with an emphasis on a renewed focus on automation, product design, and quality. The premise that technology acquisition and implementation may lead the industry to greater competitiveness underlies these suggestions [5,1,6].…”

“…However, research by the Resourcebased Industries Enterprise and Industrial Development Division (EIDD) and the Department of Trade and Industry (DTI) [3], Dunne [4], Moodley [5], and Kaplinsky et al [2] indicates that the industry has not kept up to date with technology development and global skills. The industry has also not adopted new methods of production or work organisation to improve productivity, quality, efficiency, innovation, and product design [3,4,5,2]. These findings concur with the evaluation by the Swedish International Development Cooperation Agency (Sida) [6], that:…”