Fostering Technology Absorption in Southern African Enterprises

DIRECTIONS IN DEVELOPMENT
Private Sector Development
Fostering Technology Absorption
in Southern African EnterprisesFostering Technology Absorption in
Southern African EnterprisesFostering Technology
Absorption in Southern
African Enterprises© 2011 The International Bank for Reconstruction and Development / The World Bank
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ISBN: 978-0-8213-8818-1
eISBN: 978-0-8213-8886-0
DOI: 10.1596/978-0-8213-8818-1
Library of Congress Cataloging-in-Publication Data
Fostering technology absorption in southern African enterprises :a document of the World
Bank.
p. cm.
“This study was carried out by a team jointly led by Itzhak Goldberg (consultant) and Smita
Kuriakose (economist, the World Bank) and comprised of David E. Kaplan (professor,
University of Cape Town), Krista Tuomi (lecturer, American University), Reza Daniels
(lecturer, University of Cape Town) and Peter Draper (senior research fellow, SAIIA).”
Includes bibliographical references and index.
ISBN 978-0-8213-8818-1 — ISBN 978-0-8213-8886-0 (electronic)
1. Technology transfer—Africa, southern. 2. Technological innovations—Africa, southern.
3. Investments, Foreign—Africa, 4. Africa, southern—Economic policy. I.
Goldberg, Itzhak. II. Kuriakose, Smita. III. World Bank.
HC900.Z9T44 2011
338.968—dc23
2011022855
Cover photo: michaeljung/Shutterstock.com
Cover design: Quantum ThinkContents
Acknowledgments xi
About the Authors xiii
Abbreviations xvii
Overview 1
The Relevance of Technology Absorption to
Southern Africa 2
Channels of and Constraints to Technology
Absorption 4
Policy Options for Greater Technology Absorption 6
Note 18
References
Chapter 1 Technology Absorption and Its Determinants 19
Smita Kuriakose, Chunlin Zhang, and
Itzhak Goldberg
Technology Absorption and Catch-up
Growth 21
v vi Contents
The Relevance of Technology Absorption to
Southern Africa 22
The Determinants of Technology Absorption:
A Conceptual Framework 29
The Empirical Methodology of This Book 39
Annex 43
Notes 58
References 59
Chapter 2 Channels of and Constraints to Technology
Absorption 65
Smita Kuriakose, David Kaplan, and Krista Tuomi
South Africa: Auto Component Sector 66
South Africa: Capital Goods Sector 72 Chemical Sector 79
South Africa: Software and Information and
Communication Technology Sector 84
South Africa: National Innovation Survey and
Enterprise Survey 88
Namibia: Agroprocessing Sector 93
Mauritius: Manufacturing Industries 100
Lesotho: Textile Sector 110
Conclusion 115
Annex 2A: Data Supporting the Case Study
Analyses 119
Annex 2B: Survey Instrument 124
Annex 2C: Empirical Analysis Using the NIS
and the ES Data 137
Notes 153
References 155
Chapter 3 Policy Options for Greater Technology
Absorption 159
Chunlin Zhang, Itzhak Goldberg,
David Kaplan, and Smita Kuriakose
Getting the Basics Right 162
Increasing Skill Supply 164
Supporting Learning through Trade 175Contents vii
Taking Proactive Actions to Increase FDI
Spillover 179
Building Absorptive Capacity through R&D and
Industry-Research Collaboration 188
Conclusion: Designing Locally Tailored
Action Plans 196
Annex 197
Notes 198
References 199
Boxes
O.1 A Brief History of Innovation Policy in OECD Countries 7
3.1 160
Figures
O.1 Unit Labor Costs in Selected Industries, 1996–2007 3
1.1 Technology Absorption and Economic Growth 22
1.2 , 1996–2007 24
1.3 Trends in Labor Productivity and Capital: Labor
Ratio in the South African Manufacturing Sector,
1970–2008 26
1.4 Skill Development: An Analytical Framework 37
1A.1 South Africa’s Exports of Low-, Medium-, and
High-Technology Goods, 2001–09 45
1A.2 South Africa’ Medium-, and
High-T, Dollar Value, 2001–09 46
1A.3 South Africa’s Imports of Low-, Medium-, and
High-Technology Goods, 2001–09 46
1A.4 South Africa’ Medium-, and
High-T, Dollar Value, 2001–09 47
1A.5 Mauritius’s Exports of Low-, Medium-, and
High-Technology Goods, 2001–08 48
1A.6 Mauritius’ Medium-, and
High-T, Dollar Value, 2001–08 48
1A.7 Mauritius’s Imports of Low-, Medium-, and
High-Technology Goods, 2001–08 49
1A.8 Mauritius’ Medium-, and
High-T, Dollar Value, 2001–08 50
1A.9 Namibia’s Exports of Low-, Medium-, and
High-Technology Goods, 2001–08 51viii Contents
1A.10 Namibia’s Exports of Low-, Medium-, and
High-Technology Goods, Dollar Value, 2001–08 51
1A.11 Namibia’s Imports of Low-, Medium-, and
High-T, 2001–08 52
1A.12 Namibia’ Medium-, and
High-Technology Goods, Dollar Value, 2001–08 52
1A.13 Lesotho’s Exports of Low-, Medium-, and
High-T, 2001–08 53
1A.14 Lesotho’ Medium-, and
High-Technology Goods, Dollar Value, 2001–08 53
1A.15 Lesotho’s Imports of Low-, Medium-, and
High-T, 2001–08 54
1A.16 Lesotho’ Medium-, and
High-Technology Goods, Dollar Value, 2001–08 55
2.1 Top Constraints: Foreign-Owned versus Domestic
Firms, South African Auto Component Sector 70
2.2 Top Constraints: Exporters versus Nonexporters,
South African A71
2.3 Preferred Method of Technology Acquisition,
Mauritius 104
2.4 Clothing Manufacturers’ Reasons for Investing
in Lesotho 111
2.5 Training Investment by Lesotho Clothing Manufacturers 114
3.1 Capacity and Output of the Postsecondary Public
Education System, South Africa, 1999–2009 166
Tables
O.1 Direct Instruments for Supporting Business R&D 17
1.1 Composition of Global Manufacturing Value
Added, 2005 23
1.2 Firm Characteristics 42
1A.1 Technological Classification of Merchandise Trade 44
1A.2 FDI Comparative Overview of Four Countries 55
1A.3 Stock and Flow Contrast with Comparator
Countries, 2009 58
2.1 South African ICT Exports 85
2A.1 South Africa’s Top 10 Automotive Component
Export Destinations, by Country, 2004–08 119
2A.2 South Africa’s Automotive Component Export
Destinations, by Region, 2004–08 119