Innovation investments and economic development in South Africa: an empirical analysis

Sayeed Aboobakr Milanzi (), Itumeleng Pleasure Mongale () and Binganidzo Muchara ()
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Sayeed Aboobakr Milanzi: School of Business and Leadership, University of South Africa, South Africa
Itumeleng Pleasure Mongale: School of Economics and Management, University of Limpopo, South Africa
Binganidzo Muchara: School of Business and Leadership, University of South Africa, South Africa

Journal of Economic and Social Development, 2024, vol. 11, issue 01, 01-14

Abstract: While innovation is vital to economic growth, African nations lag far behind in the development frontier than China. The paradox is that most developing countries' investment in innovation is proportionately far less than their developed counterparts. This article examines the contributions of innovation investments towards economic development in South Africa. We employed the autoregressive distributed lag (ARDL) bound testing and the Granger causality approach to analyse the annual time series data from 1990 to 2022 from the South African Reserve Bank. The findings revealed the positive impact of innovation investments (expenditures on ICT and R&D) on economic development in South Africa. The current study employed a relatively new ARDL bounds testing approach to analyse quantitative data to provide empirical evidence, which according to the literature, is not always evident and remains hard to quantify on the impact of innovation investments on economic development in South Africa. The study recommends that developing economies address the basics in the form of robust investment in human capital and upward investments in higher education.

Keywords: Innovation; Information; Communication and Technology; Research and Development; Economic Growth; South Africa (search for similar items in EconPapers)
JEL-codes: A11 (search for similar items in EconPapers)
Date: 2024
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