Rebalancing innovation policy mix to improve support for South Africa's manufacturing sector

Abstract

Innovation has long been established as a cornerstone of economic growth, and governments use a mixture of innovation policy instruments to achieve the economic and social goals of a country. South Africa's manufacturing sector has seen a contraction in 2015. The manufacturing sector is particularly driven by innovation, and this study examines how South Africa's innovation policy mix needs to be rebalanced in order to achieve growth in the sector. The study is approached using quantitative methods to characterise and compare South Africa's innovation policy mix to two comparator countries. Canada was chosen as an example of a developed country, and India as an example of an emerging nation. The effectiveness of South Africa's innovation policy mix is then evaluated using qualitative methods and the results applied to show how South Africa's innovation policy mix could be reconfigured to achieve economic growth. It was found that South Africa's policy mix is dominated by supply-side measures. India and Canada have applied a combination of supply-side and demand-side innovation policy measures to achieve goals that are comparable to South Africa's. It was also found that a chasm existed between policy instruments that support research and development efforts and the instruments that support market development. Rebalancing the innovation policy mix towards using more demand-side instruments and more generic rather than population targeted instruments could provide a remedy to this problem and improve the prospects for the sector.