Business & Economy

Monday, 13 November 2017 13:45

Innovation a Crucial Driver for Prosperity and Growth

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Innovation a Crucial Driver for Prosperity and Growth

From a productivity standpoint, South Africa is falling behind leaders in technology

JOHANNESBURG, South Africa, November 13, 2017/APO Group/ -- 

Innovation is a crucial driver that continually creates new competitive advantages as well as opportunities for prosperity and growth. In South Africa, like in other countries, we are facing both opportunities as well as challenges. This was said by the Chief Director of Innovation and Technology at the Department of Trade and Industry (the dti), Ms.s Nkuli Shinga, in Pretoria.

Shinga was speaking at the World Bank presentation of the 10th edition of South Africa Economic Update, which offered a review of the country’s recent economic and social development, and its outlook in the context of global economic prospects. It focused on the role of innovation in fostering economic growth, creating jobs and reducing poverty.

“As policymakers and implementers, we have an opportunity and the responsibility to take on a more active role in steering innovation to address socio-economic challenges. Most importantly, we must understand that innovation does not necessarily refer to high-tech that requires intensive capital and human development inputs. But we can look at how to achieve simple innovative solutions to address development challenges and productivity growth,” said Shinga.

She added that the Update indicates that South Africa’s private sector is one of the most dynamic and diversified on the African continent and government has put in place a sophisticated system to support entrepreneurship, technology absorption and innovation in the private sector.

According to World Bank’s Lead Economist, Mr. John Gabriel Goddard, the Update found South Africa lagging behind its emerging market peers and global technological and knowledge leaders. Reviewing the country’s innovation strengths and weaknesses, the Update underlines the large untapped potential for innovation.

“From a productivity standpoint, South Africa is falling behind leaders in technology. South Africa is today much less productive than it was and diverged in productivity from main technological leaders, whereas private expenditure in research and development contracted. A critical contributing factor to this deterioration is the insufficient innovation efforts from private companies, in absolute terms and in comparison with peers in the last decade. These developments highlight the pressing need to focus on innovation policy as an actionable tool for economic and social progress”, said Goddard

He said innovation could only raise South Africa’s competitiveness and allow breaking into new markets and creating jobs, boosting productivity in existing industries. Fundamentally, innovation can help the country diversify from its traditional commodity-based economic model which did not lead to the reduction of inequalities in the last decades.

Furthermore, given the country’s medium level of economic sophistication and diversification, there is a wide scope for adapting foreign technologies and turning private Research and Development into a more powerful driver of economic growth. Moreover, innovation can improve the lives of millions of people, particularly poor people by improving goods and services.

“To realise this potential, South Africa ‘s innovation strengths need to be integrated more effectively with the rest of the economy. Innovation can only have a strong economic and social impact if commercialised and brought to a large number of beneficiaries. Harness innovation potential through improving investment climate for Small Medium Enterprises (SMEs), facilitating trade, strengthening competition in information and communication technologies, filling the skills gap through skilled migration notably making public support to innovation more effective,” added Goddard.

Click on the link to access the report

Distributed by APO Group on behalf of The Department of Trade and Industry, South Africa.

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