Surviving in the BRICS: the struggle of South African business in coping with new partners and investors

Abstract

The purpose of this paper is to improve our understanding of how South African economic actors react to the gradual entry of non-South African BRICS firms in their established business areas. Throughout the twentieth century, South Africa's trade and investment activities were conducted overwhelmingly with Western countries. However, the end of apartheid coincided with significant shifts as new players had a wider and growing presence. South Africa entering the BRICS alliance is symbolic of the change. Ease of entry into the South African economy has increased greatly. South African businesses in key subsectors in the mining and capital equipment industry have had to adapt to new players, and find space in new structures, value chains and initiatives. This paper presents the results of this research activity from the perspective of the South African political economy. Practice-oriented research investigated how six local companies forge new partnerships and how well South African firms adapt and cope with an altered and often unstable environment. It assumed that entrepreneurial activity is not autonomous but takes place within a larger organisational framework. Entrepreneurial activity facilitates the effective exploitation of particular niches and relationships with service providers. KEYWORDS South Africa; BRICS; mining management; entrepreneurship; Chinese business relations; niche management a transmission belt for global forces to the rest of the continent'. This is key to grasping where the South African economy is positioned in the grand discussion over BRICS. After exploring the diverse interests and strategies of players from the individual BRICS nations, Carmody (2013) notes that South African interests in fact bolster Chinese big businesses' activities in Africa with impacts that remain unclear. The purpose of this paper is to improve our understanding of how South African economic actors react to the gradual entry of non-South African BRICS firms in their established business areas. Carmody does not define the particular role of South African companies in the BRICS process (Draper and Qobo 2015). In addition, it is not clear how governments politically engaging in BRICS would promote more value-added exports and attract investment in minerals beneficiation or processing at source as would be desirable (Kaplan 2015). Instead, increased competition from BRICS firms, mainly with those from India and China, has become a practical challenge for many firms, notably in manufacturing (Kaplan 2015; Manufacturing Circle 2017). An understanding of how to engage economically with non-South African BRICS actors is pertinent for policy makers and private firms (Qobo 2010; Draper and Qobo 2015). In her criticism of suspect state-business relations, Catherine Grant Makokera (2015, 127) advances the argument earlier made by Qobo (2010) on the '.. .need for the public and private sectors in South Africa to work together in order to develop further the economic diplomacy of the country. There is a clear potential to mu...