Positioning the South African Economy for New Industries: Policy Lessons from East Asia

The South African system of innovation in the post-apartheid dispensation remains in the apartheid trajectory – small and exclusive. Lock-in and path dependency are common in innovation and economic systems and, as a result, they reproduce the past. The development of new industries remains a challenge; manufacturing's contribution to gross domestic product (GDP) has declined significantly over the years. South Africa adopted the concept of a national system of innovation (NSI) to distribute socio-economic benefits widely. Opportunities for ruptures and discontinuities, which could have enabled disruption, have come and are now gone. The emergence of the fourth industrial revolution (4IR) offers yet another opportunity; however, it is likely to be missed unless there is development and implementation of a suite of targeted policies for new industries. The common theme among countries that successfully adopted the NSI concept is active and bold policies, with directed investment towards selecting new industries for competitiveness. This study reviews the policy of countries that succeeded in adopting the NSI concept since the 1980s to offer lessons on how to position the South African economy towards new industries. The research develops and proposes a framework for launching new industries. Implications for policy are also presented.