ABSTRACT
9.2. TECHNOLOGICAL CHANGE AND INDUSTRIAL MIGRATION
CHAPTER NINE: FACTORS AFFECTING INDUSTRIAL MIGRATION - SOME KEY FINDINGS
econormc dislocations of some kind. For instance, an important aspect of the Marxian theory of economic development and institutional change is the idea that economic efficiency, innovation rate and ul~atelyproductivity levels are the key factors that decide the outcome of the competition between different forms of organisation of economic activity (Gomulka, 1990)
The aimof this thesis is not merely to repeat the previous finding in trying to investigate what technological changes have occurred in various industries. The idea of company technological growth has been an attractive concept for some time. Itis not surprising therefore, that much has been published about this subject. The focus rather, is on impact assessment.
For this thesis, it is a simple matter to define technological change in terms of changes in the characteristic of an abstract technology. This applies to growth both through technology replacement and substitution. Though the topic of automation is a wide field on its own, and warrants separate research, technological expansion is understood to mean company growth by input from outside the company. This can be in the form of new machinery that is able to vastly increase production without an increase in the number of employment opportunities.
However, this interest does not mean that the whole external growth problemhas received systematic and closely reasoned treatment in the available literature. Most organisations that may be characterised as growth companies are, as a result of their continuous efforts towards technological innovations, replacing old machinery and reducing the number of jobs at the same time.
The Pinetown survey, for instance, found that technological replacements that were taking place in many of the sampled industries, was one reason for job losses. Though technological innovations are expected to create more efficiency and increase productivity in many industries, this thesis found that they are, in actual fact, job killers.
This study also found that, prior to the closure of coalmines in Dundee and Hlobane, there were no efforts by the mining industry in the area to engage in technological innovations, as a way of adding value to the local coal industry. All their activities were directed towards 'rejuvenating' the outdated production activities and of supplying coal to their conventional
markets. The lack of these activities meant regression, loss of· market share and less financial capacity to provide for future investments.
The most extreme and, at the same time the most complete, forms of external development is in the form of take-overs or acquisitions. This was the case with Mooi River Textiles, when it was taken over by Da Gama Textiles. The take-over of Mooi River Textiles, a company that formerly exercised its company functions independently, is a straightforward external development that led to job loses. This phenomenon was also predicted by Hovers (1973:3) as having a devastating effect on the local economy. Instead of the production of the company increasing and the market share enlarging, Da Gama decided to close down the Mooi River operation, because the original objective of the takeover was not to increase production, but to killthe competitors.
Closures, such as those of Mooi River Textiles and the mining operations in the Coal Rim area of Dundee, have become a depressingly commonplace feature of industrial life in small towns.
Millions of people, especially those in the regions away from major cities, are affected directly or indirectly as a consequence of such closures. However, it needs to be stated that the experience of closure is not new, as it has been felt by regions throughout the world as a recurrent feature of the capitalist economy. As new technologies and new investment patterns lead to closures, outdated technologies and less profitable plants are being closed down.
Whereas in the past closures were followed by the introduction of new technology and new innovative plans and new jobs, nowadays, closures and job losses are no longer counter-acted by new plant openings and job gains.
This study found that the closure of Mooi River Textiles unleashed two types of multiplier effects to the area:
• All businesses that were supplying equipment and material, together with those parts of the public sector responsible for services such as fuel, water, transport and maintenance disappeared.
• The purchasing power of local consumers was drastically reduced and the revenue base of the local authority was heavily impacted. One can conclude that the closure of one firm has also threatened the jobs of the others who are employed by the related industries. The local economy has been significantly undermined.
The full effect of large-scale closure is therefore not experienced by the regions, but by localities, where they occur. Though the effect of the closure of this company may not have been felt across the region, the localities of Mooi River, Escourt and Howick felt the impact.
In addition, knock-on effects of major closure such as this one have spread to all areas in the neighbouring localities.
Such closures have destroyed the economic and social fabric of Mooi River to such an extent that the areahas been condemned to a slow and lingering decline. The principal victim, aside from the individual workers and their families has been the community at large. In places such as Durban, the closure of a single large plant may not be felt the same as those in small towns.
The size and the degree to which the local economy is dependent on the single industry determine the extent of the impact. However, the resilience of the retail and financial sector has had to offset the effects of the decline of the manufacturing sector to some extent.
Itis therefore appropriate to conclude that the closure as it happened in Mooi River is not only a temporary setback, which may rectify itself once the market has rectified itself, but is part of a fundamental change with long term consequences. Industrial restructuring, the movement of capital from one sector to the other, is taking place at the expense of communities in small towns. The closure of Mooi River Textiles and the massive loss of jobs in the textile industry were accompanied by major shifts in location preference of that industry. As a result, the Mooi River local authority has failed to attract this industry back in the area
This study also found that closures, as experienced in Mooi River, threatened not only the position of the industry in the area, but also the prospect for new jobs. A low level of demand, as a consequence of high unemployment, has diminished the market for new disposable mcome.