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Research and development in the services sector of an emerging economy: The case of South Africa

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  • Michael Kahn
  • Lidwine Hounwanou

Abstract

The South African government is seeking to shift the economy from being efficiency driven toward being more knowledge-intensive. Noting that the economy is dominated by services we examine research and development (R&D) and innovation in the sector using data from the national R&D and innovation surveys, and interviews with 18 local transnational firms. We establish the nature and size of R&D activities in the sector, and the extent to which practice is similar to that in industrialized countries. It is found that R&D in information and communications technologies (ICTs), especially software development dominates R&D in banking, insurance and retail firms. This competence results from prior investment in home-grown ICT solutions during the sanctions years. We identify three issues for policy: first, the need further to quantify R&D in the extended value chains around the commissioning firm; secondly, the new R&D tax incentive risks marginalizing the services sector; thirdly, the extent to which the better-paying services sector is attracting talent away from research careers in science, engineering and technology. Copyright , Beech Tree Publishing.

Suggested Citation

  • Michael Kahn & Lidwine Hounwanou, 2008. "Research and development in the services sector of an emerging economy: The case of South Africa," Science and Public Policy, Oxford University Press, vol. 35(7), pages 515-526, August.
    • Handle: RePEc:oup:scippl:v:35:y:2008:i:7:p:515-526
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    File URL: http://hdl.handle.net/10.3152/030234208X346771
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    Cited by:

    1. Silvia Cruz & Sônia Paulino & Faïz Gallouj, 2015. "Public Service Innovation: Solid Waste Sector from the Perspective of Clean Development Mechanism Landfill Projects," Post-Print halshs-01247615, HAL.
    2. Lindile L Ndabeni & Christian M Rogerson & Irma Booyens, 2016. "Innovation and Local Economic Development Policy in the global South: New South African perspectives," Local Economy, London South Bank University, vol. 31(1-2), pages 299-311, February.
    3. Irma Booyens, 2016. "Global–local trajectories for regional competitiveness: Tourism innovation in the Western Cape," Local Economy, London South Bank University, vol. 31(1-2), pages 142-157, February.

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