Can SA move to the next phase of economic development? PDF Print E-mail
Thursday, 27 August 2009 08:26
scienceball_optA science and technology perspective

The global competitiveness of a nation will always be an important indicator for economic policy-makers in determining the way forward for sustainable economic growth. 

Competitiveness tells you much about the innovativeness, efficiency of products and processes, level of skilled labour, efficiency of infrastructure (including education and training institutions), and so forth of a nation.
 
The World Economic Forum (WEF) identifies three major phases any country has to go through in the continuous development of the economy. In the first, factor-driven phase, a country has to develop a base of available labour and natural resources.

This is followed by a second phase where the labour and natural resources are developed for utilisation in an efficiency-driven product and production environment. Important factors in the second phase are, for example, higher education and training and the efficient use of appropriate technologies.
The third phase of development is an innovation-driven stage where competitiveness is built on the successful global commercialisation of new technologies and new products/services.

It is not surprising that the continuous measurement of the competitiveness of nations attracts attention from policy-makers around the globe.

The WEF rates South Africa in the second phase of economic development, thus we are in the process of developing an efficient product and process environment.

The question is: how well are we doing in mastering this second phase?

The 2009 edition of the World Competitiveness Yearbook, published by the IMD World Competitiveness Center in Switzerland, ranks South Africa 48 out of 57 countries on competitiveness – not something of which to be proud. We were ranked 53 in 2008, coming from position 37 five years ago (thus a very negative trend).

A very disturbing fact is that South Africa is ranked in position 54 out of the 57 countries for infrastructure efficiency. Over the last five years, our ranking for infrastructure varied between positions 49 and 55.

Infrastructure includes basic infrastructure (such as water resources and energy infrastructure); technology infrastructure (such as mobile telephone costs and internet bandwidth speed); scientific infrastructure (such as total expenditure on research and development and science in schools); health and environment (such as healthy life expectancy and quality of life); and education (such as the educational system and qualified engineers).

Looking at the chosen examples of factors, we do not have to wonder why our ranking is so low. The total ranking of South Africa by IMD is in line with the competitiveness ranking done by the WEF in its 2009 Africa Competitiveness Report, which pointed to “an inadequately educated workforce” as the most problematic factor for doing business with South Africa.

Much is said in the media about the inefficiency of the current school educational system in South Africa, particularly in the fields of science and mathematics. This low efficiency directly impacts on the successful education of engineers and scientists at our universities.

On top of this, South African universities face a serious shortage of skilled academics and researchers, as well as a shortage of research funding.

Again, we can thus ask the question: how well are we mastering the second phase of economic development? How long will it take to enter the third phase, where our economic growth will be innovation-driven and our competitiveness position increase substantially?

Perhaps the future is not that bleak. According to the South African Innovation Survey, done by the Human Sciences Research Council, more than half of South African companies engage in innovative activities, developing and improving products and processes. This compares very well with the average level of innovativeness of countries in Europe.

Although the type of innovation in South African companies points more to so-called incremental innovation – where improvements of existing technologies, products and processes are characteristic – it is still an indication that our scarce skilled labour resources are quite productive.

South African companies seem to be successful in developing business strategies whereby the utilisation of the scarce skilled labour and limited R&D funding, in combination with the utilisation of efficient local and global knowledge networks, deliver the required innovations to sustain their business.

But South Africa needs much more of these if it wants to improve its competitive position on a global ranking scale and if it wants to progress to the third phase of economic development.

It is clear from the findings of the regular global competitiveness surveys in which areas we should focus our improvement efforts.

From a science and technology point of view, the message is very clear: get in place our infrastructure in terms of educational systems! This is the minimum requirement for innovation and the sustainable development of our economy, but also for our future quality of life.

Tinus Pretorius

Professor Pretorius is the chairperson of the Graduate School of Technology Management at the University of Pretoria and also teaches Technology Management. As professional engineer, he spent many years in industry on projects in the nuclear, defence and other industries before joining the university on a full-time basis. He is active on research in the field of technology and innovation and is also an active member of several international professional organisations.
 

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