Human capital and regional value chains in Southern Africa’s automotive sector: A pathway to industrial competitiveness

This study examines the impact of human capital on regional automotive value chains, emphasizing tier‑specific and exporter–importer differences in human‑capital effects, and recognizing that skill needs differ across production tiers (raw materials, components, and assembly) and between firms oriented to exports and those dependent on imported inputs. Using a sample of 15 countries from 2000 to 2022, the empirical analysis of the augmented gravity models (PPML and IV-PPML) underscores the crucial role of human capital in enhancing intra-Southern African exports of automotive components (Tier 1-3). Furthermore, the results demonstrate that importing countries in the region become self-sufficient in the production and export of complex Tier 1 and 2 automotive components when they improve their skills, knowledge, and human capital. While this reflects desirable forward/upgrading at the national level, it also introduces a structural tension with RVC integration if multiple countries simultaneously internalize the same automotive components. This means that regional trade in those segments can contract, fragmenting previously integrated supplier networks and reducing the scale advantages that underpin competitive component production. To strengthen regional automotive integration, governments should incorporate sustainable automotive technologies into educational and training programs. Although the region has basic skills in manufacturing, repairing, and servicing vehicles, expanding these to meet large-scale production and export needs will require targeted upskilling through Technical and Vocational Education and Training (TVET) programs focused on precision engineering, advanced manufacturing, and electric vehicle (EV) assembly.