Creative destruction or simple reshuffling? Turnover among businesses and jobs in South Africa
Year: 2025
Type: article
Abstract: The concept of creative destruction emphasizes how the turnover of businesses and workers drives innovation, productivity gains and aggregate economic growth, even as individual firms and employees experience disruption. This article leverages administrative tax data for South Africa that measures flows rather than stocks, enabling a dynamic analysis of labour and firm adjustments. Our findings reveal unexpectedly high levels of churn in both jobs and business establishments, suggesting fluid rather than rigid markets. However, job and business creation mirror destruction, resulting in low net growth. Moreover, sectoral shifts over time have not increased the share of tradables, implying that structural transformation has stalled.
Source: ERSA Working Paper Series
DOI: 10.71587/kv955m26
Authors: Visagie, Justin, Turok, Ivan, Nell, Andrew
Institutions: Human Sciences Research Council, University of the Free State
Language: English
Topic: Firm Innovation and Growth
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W6940031393
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