Specific challenges that the country faces:

A relatively small domestic market, and the long distance from wealthy export markets.
The volatility and recent appreciation of the exchange rate.
High prices and poor quality transport and telecommunications infrastructure.
An historic legacy of underdevelopment in skills and technology.
High levels of industrial concentration associated with large price mark-ups, particularly with respect to intermediate products.
Fixed investment by both the public and private sector has been too low to sustain high growth and employment rates.

…But on the plus side* SA has established manufacturing and, in some pockets, technological capacity; * public spending to drive fixed investment is growing over the coming decade; and * domestic demand is growing.

Critical interventions government will make are:

A review of industrial financing in line with the principles above. Industrial financing has too often been captured by resource-based projects that do not contribute to development.
Trade policy must follow industrial policy, and especially the Customised Sector Programmes (CSPs).
Ensuring that government investment does more to stimulate local production.
Ensuring that BEE and women’s empowerment programmes must be accelerated and linked more closely to growth and employment.
Support for high-tech activities, including world-class manufacturing, improved standards and quality assurance, and intellectual property rights.
A strengthened competition policy.
Improving the effectiveness of small business institutions.
Support for regional industrialisation.
A supportive infrastructure, skills development, technology development and macro policies.
A policy for engaging with the rest of the continent.

Sectors government will support include:

Downstream industries – metals, machinery, plastics and possibly white goods
Advanced manufacturing (in line with the analysis that these are the growth areas in world trade) – automotives, other transport, aerospace and electronics
Labour-intensive sectors – both potentially viable industries and industries that are major employers but that require major restructuring to survive. (No examples are given.) These sectors also include services – Business Process Outsourcing (BPO) and project management for construction and mining.
In addition, two new CSP-type processes will be initiated:
investigate opportunities for greater labour intensity in existing sectors and to develop CSPs for labour absorption service sectors, particularly non-tradable services.
identify new high potential sectors in terms of value addition and employment opportunities.