Local economic development is dependent on human, natural and capital resources as well as on trade, monetary and fiscal policies. However, ultimately the availability of effective employees remains the crucial requirement for identifying and implementing economic development. The paper argues that employees with low skills could significantly reduce the gross geographical product of provinces and thus compromise South Africa's industrial policy and economic growth and even prevent integrated local economic development. The loss of revenue due to shortage of effective employees is used as an indicator for local integrated local economic development. An indicator is designed for an industrial policy for South Africa in order to monitor performance of sectoral poles of economic development and incentives are proposed for monitoring and reducing the shortage of effective employees in the country.