Mapping modes of firm innovation: new indicators for South African STI policy

South African science, technology and innovation (STI) and industrial policy actors, and business or industry organisations, increasingly recognise the need for a contextually appropriate mix of policy interventions aiming to build and strengthen firms’ innovation capabilities, aligned with the priorities of the STI Decadal Plan (2022). New kinds of indicators can add value to inform design, implementation and monitoring of a policy mix. This policy brief draws on analysis of national business innovation datasets to identify and profile the distinctive South African spread of firms’ modes of innovation. The empirical analysis identifies four main innovation pathways, so that policy strategies and mechanisms are oriented to incentivise the full range of firm innovation capabilities: (1) strengthening the dynamic innovation capabilities of high capability firms operating on global or domestic markets, (2) building the innovation capabilities of moderate capability firms, for technology modification, (3) broadening the innovation capabilities of low capability firms to access and absorb technologies, and (4) supporting the conditions for non-innovating firms’ market entry and growing demand.