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Innovation investments and economic development in South Africa: an empirical analysis

Author

Listed:
  • Milanzi, Sayeed Aboobakr

    (School of Business and Leadership, University of South Africa, South Africa)

  • Mongale, Itumeleng Pleasure

    (School of Economics and Management, University of Limpopo, South Africa)

  • Muchara, Binganidzo

    (School of Business and Leadership, University of South Africa, South Africa)

Abstract

While innovation is vital to economic growth, African nations lag far behind in the development frontier than China. The paradox is that most developing countries' investment in innovation is proportionately far less than their developed counterparts. This article examines the contributions of innovation investments towards economic development in South Africa. We employed the autoregressive distributed lag (ARDL) bound testing and the Granger causality approach to analyse the annual time series data from 1990 to 2022 from the South African Reserve Bank. The findings revealed the positive impact of innovation investments (expenditures on ICT and R&D) on economic development in South Africa. The current study employed a relatively new ARDL bounds testing approach to analyse quantitative data to provide empirical evidence, which according to the literature, is not always evident and remains hard to quantify on the impact of innovation investments on economic development in South Africa. The study recommends that developing economies address the basics in the form of robust investment in human capital and upward investments in higher education.

Suggested Citation

  • Milanzi, Sayeed Aboobakr & Mongale, Itumeleng Pleasure & Muchara, Binganidzo, 2024. "Innovation investments and economic development in South Africa: an empirical analysis," Journal of Economic and Social Development, Clinical Journals Press, vol. 11(01), pages 01-14, March.
    • Handle: RePEc:ris:joeasd:0017
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    References listed on IDEAS

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    More about this item

    Keywords

    Innovation; Information; Communication and Technology; Research and Development; Economic Growth; South Africa;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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