The Midrand area: An emerging high‐technology cluster?

Abstract

This article takes a close look at art emerging high‐technology cluster in a developing country ‐ Midrand in South Africa ‐ to develop a deeper understanding of its nature, why it emerged and the problems it faces. Midrand lies within the Gauteng province, which has a disproportionately large share of South Africa's private and public demand, as well as factor inputs for high‐technology sectors. The cluster is growing rapidly and includes a large contingent of high‐tech multinationals and blue‐chip local firms. The cluster is not, however, based on research and development but rather on head office, warehousing and distribution functions, and manufacturing. Its success is built on a central location, high visibility, a positive high‐tech image, good quality of life, a visionary town council, good investment returns, low operating costs and a lack of local competition. Its weaknesses are that it has not been built on a solid foundation of high‐tech infrastructure and lacks high‐tech dynamism, rendering its locational advantage somewhat fragile.

Notes

Economist, Development Policy Research Unit (DPRU), University of Cape Town. This research formed part of a larger study of high‐tech clusters in developing countries for which funding was provided by the International Development Research Centre, Ottawa, Canada. The author is indebted to Saul Levin for his assistance, and to the group of SDI researchers at the DPRU for their comments and suggestions. Thanks to Nick Lin‐denberg of the ITS GIS lab at UCT for much help with producing the maps.