Patterns of Investing into Business R&D in South Africa

Abstract

T he paper explores the patterns of business investment in research and development (R&D) using evidence from companies in South Africa in comparison with indicators for a number of other countries. This study covers the period 2006-2016, the studied companies were grouped by the amount of R&D expenditures (BERD), the number of reports on research performance for the first and last years of monitoring. A typical characteristic of private sector R&D activities is the uneven distribution of resources in space and time. The major financial and other assets are concentrated within few large companies Кeywords: R&D performance; BERD; concentration; persistence; volatility; business sector; policy; South Africa from a limited number of industries, while the majority of small and medium-sized enterprises invest in R&D projects only sporadically, for a period of no more than two consequential years. Firms that perform R&D for longer periods invest in R&D incrementally and remain more persistent than enterprises performing less R&D for shorter time periods. In view of the common nature of a number of several patterns, these observations suggest different approaches to policies supporting R&D performance in the business sector not only in South Africa, but also in other countries.

A bibliometric analysis of the Journal of Transport and Supply Chain Management

“…The effort and time spent on drafting a publication is not considered to impact the brand, the image or the bottom line of organisations in these two sectors. A further contributing factor, in the case of the private sector, is the decline in the spending of business enterprise on R&D (BERD) (see Molotja et al 2019). The ratio of BERD to gross domestic expenditure on R&D (GERD) in South Africa has declined to almost 40% since 2009-2010.…”

Role of global economic policy uncertainty on firms participation in innovation and new product introductions: an empirical study in African SMEs

“…As African SMEs are already plagued by a series of challenges, their decision to undertake risky innovative projects is further hampered, especially at times when global uncertainty is high. For starters, while larger firms do have the financial and human capital to integrate a large-scale R&D project (Molotja, Parker, & Mudavanhu, 2019) as part of their marketing strategy, SMEs on the other hand are required to partner with other larger firms. Especially at a time, when high global uncertainty is detected, these collaborative partnerships of African SMEs, especially those with other international organisations and subsequently, their licencing agreements could be significantly impacted, thereby putting their innovation activities on hold.…”