Contribution of support schemes to innovativeness in the South African automotive component industry

The contribution of government support schemes to foster innovativeness in the automotive component manufacturing industry was investigated in the developing country context. South Africa´s national, provincial and local governments have various support schemes to benefit the domestic automotive industry. This industry has experienced a significant growth in foreign direct investment (FDI) since 1995, mainly due to the introduction of the Motor Industry Development Programme (MIDP). By using the data from the South African part of the International Automotive Supplier Research, the contribution of the MIDP and the subsidies of the Sector Education and Training Authorities (SETA) to the innovativeness of the automotive component manufacturers was evaluated. The research indicates that there was a correlation between the MIDP and innovation in logistics and in organising external relationships, but no correlation between innovation and the subsidies by the SETA.