NACI Resources Studies, etc SA Innovation 2004

This publication is not a policy document. It is intended to contribute the latest
available reliable and valid information to the crucial debate about the value placed in our economy on knowledge and its appropriate use through innovation by the public and private sectors. It is a potentially valuable resource to enrich discussion and to assist South Africa to make better choices in the future. 

Innovation, and organisational changes associated with it, is a key determinant of
economic growth over the long term. In the past, economic growth was thought to
depend on inputs, such as labour and capital investment. Recent studies of economic growth show, however, that innovation and technology determine any economy’s long-term growth prospects (NACI/NSTF, 2001).

The NACI/NSTF growth and innovation study of 2001 investigated the interactions
between science and technology and economic growth in our setting. Figure 1.1
depicts the percentage contribution to South Africa’s gross domestic product (GDP)
by labour, capital investment, and technology efficiency over the past two decades.
This study showed that, whereas in the 1970s growth in real GDP was attributed to
capital and labour contributions, recent economic growth in South Africa could be
attributed more to technological contributions than to those of labour and capital
(NACI/NSTF, 2001).