Industrialisation requires innovation and, despite increased investment into science, technology and innovation, as well as the implementation of policies designed to encourage innovation, South Africa’s innovation activities remain constrained. This was the warning of Trade and Industrial Policy Strategies executive director Saul Levin during a recent forum, where policymakers, industry leaders, nongovernment organisations and academics gathered to discuss innovation and industrialisation in light of the technological changes associated with the Fourth Industrial Revolution (4IR).

Levin opened the conference, stating that innovation was critical for industrial policy and industrial development, while also being a key aspect of technology upgrades and ultimately economic growth.

“Hopefully, the new Cabinet of Ministers [announced by President Cyril Ramaphosa on May 29] will increase resources [for] research and development,” he stated.

Further, European Union (EU) ambassador to South Africa Marcus Cornaro pointed out that South Africa had managed to turn around sharp declines in foreign investment since 2014, but that there was still a long way to go towards meeting Ramaphosa’s R100-billion investment target in the coming years.

He said that a trusting and efficient relationship between countries was vital to driving innovation. The EU currently exported high-tech equipment to South Africa, which Cornaro noted was underpinned by about 20 policy dialogues in areas such as natural resources, science and technology, climate change, education and digital skills, human rights, peace and security, biodiversity and water management issues. This meant that South Africa was not isolated in terms of industrial and innovation policy.

Levin delivered a speech on behalf of Thandi Pele of the Department of Trade and Industry (DTI), arguing that innovation, if not managed correctly, could be the root cause of the trade wars the world was witnessing.

According to Pele, the trade wars could be linked to contestation for mastery of 4IR, where there was the risk of a ‘winner takes all’ attitude.

“One can rightly or wrongly argue that the Huawei/Google debacle is one such example and this should give us food for thought, or a clearer perspective, of the interface between innovation, industrialisation and the high stakes thereof,” she said.

However, Pele also acknowledged that the South African economy was not operating in isolation to the rest of the world and that the survival of industries was often linked to their ability to innovate and respond to a changing world.

“The needs and requirements of consumers in the local and global markets are becoming more complex and diversified. Therefore, in approaching industrialisation, social partners have to give special consideration to and focus on levers and polices that build human and industrial capital.

“The overarching aim is to achieve and build a globally competitive knowledge economy with products and services that are responsive to the needs of the local and global markets.”

Pele added that the challenge for industrial policy remained the development of an economy that continuously grew its ability to produce more complex and higher value-added products with greater efficiency.