South Africa's exports of high-technology products: a comparative perspective and some policy priorities

South Africa's overall performance in high-technology products as measured by global export shares and registered patents has been weak in comparison to other developing countries and in comparison to other commodity producers. However, a number of high-technology South African companies in a variety of fields are succeeding in global markets. The reconciliation of the existence of successful high-technology firms with poor overall performance principally rests in the constrained supply of quality high-level skills. Access to quality high-level skills is the most important source of success for South Africa's high-technology firms and, at the same time, the limited supply of such skills is the major constraint on the development of existing firms and even more so on the entry of new firms. The limited access to early-stage capital and the lack of marketing channels and expertise are further constraints. Policies should accordingly focus on the improvement of the supply of skills, rather than on the recasting of existing technology policies or the allocation of additional resources to spur innovation.