ABSTRACT
The multinationals of the first unbundling have become the transnationals of the second unbundling. South Africa already operates as the trade and transport gateway for the region, much as China did in the 1990s for East Asian economies. Internationally, South Africa struggles to attract transnational headquarters, with increasing competition from offshore locations. Under the first unbundling, latecomers diversified the production of upstream components and tasks to maximize net value added in the production of whole manufactures. Fractionalization concerns the unbundling of production processes into finer stages of production. The global environment for industrial production and trade has changed markedly since about the end of the 1980s. Task-based production and trade may allow even the poorest countries to enter at a low rung of production ladders of sophisticated manufactures and even offices in the service sector. Fragmentation has meant that latecomers can join segments of the industrial bases of other countries into coherent global value chains.
