Industrial innovation in a technology colony

Empirical data obtained from the South African National Innovation Survey for the period 1998-2000 shows that South Africa is a type of technological colony whose industries are dependent on foreign technology for the improvement of its products and processes. The survey found that 52% of South African firms in the manufacturing sector had technological innovations in the period 1998-2000. This figure is surprisingly high-it is the same as the European average and higher than that of many developed countries in Europe such as Italy, Norway and France. South African firms achieved this outcome with relatively few resources. The innovation expenditure in South Africa as a percentage of sales in manufacturing in 2000 was 2.6%, which is low in comparison to the European mean of 3.7%. An unexpected conclusion is that South African innovating firms are able to produce innovation outcomes that are comparable to European levels with innovation efforts that are lower than those of their counterparts. South African innovators are unique in many respects, providing some preliminary and partial explanations for this ´input-output paradox´. The sources of information for innovations as well as types of partners used by firms indicate a tendency to imitate rather than invent. The implications this has for industrial development and policymaking are discussed and some guidelines for policymaking are presented.