Novel idea
'Innovation policy' should be at the heart of South Africa's G20 policy agenda
In July 2024, President Ramaphosa addressed parliament with a bold promise: his administration would place inclusive economic growth at the top of the national agenda. It was a message of hope for a country weighed down by persistent challenges – high unemployment, crippling government debt, and grinding inequality. Yet, the real question, as always, is how. How can South Africa break free from a cycle of stagnation and chart a path to sustained growth?
The answers are not new. The National Development Plan (NDP), adopted more than a decade ago, outlined a sensible roadmap for the country’s future. Yet South Africans today earn, on average, the same as they did in 2012, when the plan was introduced. That is because the plan was paid little more than lip service. More recently, Operation Vulindlela, a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms, has tackled urgent issues like electricity supply and logistics bottlenecks. But while these efforts are necessary, they are not sufficient. Stabilising electricity or fixing railways may nudge the economy towards 1 or even 2% growth per capita – better than the current malaise, but far from what is needed to lift millions out of poverty. To address South Africa’s social and economic challenges at their root, we should aim higher: 3% or more sustained per capita growth. Achieving that will require something more fundamental – a strategy that fosters and sustains innovation.
We can learn from the past. The Industrial Revolution, often viewed as a sudden burst of technological breakthroughs, was, in fact, the result of a much deeper cultural shift. It was a period when knowledge, learning and scientific inquiry were elevated as societal priorities. Education was expanded. Institutions were built to support collaboration between scientists, inventors and entrepreneurs. It was this cultural and institutional foundation, rather than any single invention, that propelled economic growth to unprecedented levels in eighteenth-century England. Once established, this culture of progress spread, transforming Europe, North America, Japan, and eventually much of the world.
South Africa, as host of the G20 meetings in 2025, has a unique opportunity to lead a global conversation on creating a homegrown culture of progress. What I call ‘innovation policy’ is key to achieving that.
South Africa’s current innovation landscape tells a story of unfulfilled potential. The country spends just 0.62% of its GDP on research and development (R&D), far below the 1.5% target outlined in the NDP. This is not merely a missed target; it represents a missed opportunity. Investing in R&D is not an abstract goal; it is a proven driver of economic diversification and growth. For a small, open economy like South Africa’s, innovation in high-value sectors is essential. We cannot rely indefinitely on mineral exports or low-value manufacturing. Instead, we should leverage our existing strengths – such as expertise in mining and automotive manufacturing – to build competitive advantages in emerging industries like renewable energy storage, green hydrogen, and electric vehicles.
We have done so before. In 2008, the government-supported Joule electric vehicle project demonstrated the potential for locally developed, high-tech innovation. While the Joule ultimately failed for financial reasons, it offered a glimpse of what is possible with the right mix of public and private sector involvement. One thing we can do today, for example, is to encourage the National Research Foundation to more strategically invest in projects with clear commercial and export potential.
Or what about gamifying innovation? Throughout history, prizes have been offered to incentive innovation in an area of (industrial) importance. The invention of the marine chronometer in the eighteenth century, for instance, solved the critical problem of determining longitude at sea, with profound economic benefits. South Africa could offer similar prizes for solutions to pressing challenges, such as scalable solar-powered water purification systems or sustainable ways to repurpose mining waste. These are not just technical problems; solving them could unlock new industries and create jobs.
Innovation is about people – equipping them with the right skills and creating environments where ideas can flourish. Education is, therefore, central to any innovation agenda. Historically, regions with dense networks of knowledge elites – people with access to cutting-edge information and skills – have grown faster and adopted new technologies more effectively. In eighteenth-century France, for example, the spread of Encyclopédie subscribers correlated with industrial growth. South Africa should aim to attract such knowledge elites, not just from within its borders but from around the world. An obvious low-hanging fruit is a streamlined visa programme for top scientists, engineers and entrepreneurs who could bring invaluable expertise to the country.
At the same time, South Africa cannot afford to neglect the broader talent pipeline. Budding scientists and entrepreneurs from places like Mamelodi or Mitchell’s Plain must have the same opportunities as those from wealthier suburbs. Much has been written about South Africa’s education crisis, but one often overlooked solution is competition. Historical evidence shows that competition can improve outcomes, even in education. For example, Protestant missions in colonial Africa consistently outperformed their Catholic counterparts, largely because they faced more competition. Introducing a voucher system in South Africa’s public schools could replicate this dynamic, incentivising better performance and giving students more choices.
Education and research need ecosystems to thrive. This is where infrastructure comes in. In the nineteenth century, railways transformed entire economies by reducing trade costs and connecting remote regions to markets. Today, broadband is the new railway. Expanding high-speed internet access, especially in underserved rural and township areas, is essential for integrating more South Africans into the digital economy. Innovative models like pay-as-you-go fibre, pioneered by companies like Fibertime, demonstrate that affordable connectivity is possible.
The final puzzle piece is creating the right institutional and regulatory environment. Entrepreneurs need room to take risks without being stifled by excessive regulation. Labour laws that entangle rather than empower must be reformed. Universities, which have historically been incubators of innovation, should play a more active role in commercialising research. Expanding initiatives like the university-technology fund could help bridge the gap between academic discoveries and market-ready products.
South Africa’s G20 presidency offers a chance to champion this vision on a global stage. By making innovation policy the heart of its agenda, South Africa can inspire not only its citizens but also other developing nations to embrace the transformative power of ideas. The world will be watching. Let us show them what is possible.
An edited version of this article was published on News24. Support more such writing by signing up for a paid subscription. The images were created with Midjourney v6.
Sometimes I wish I knew what inclusive growth in the context of SA means. To survive and thrive, the mainstream agricultural, mining and construction sectors, long time ago, they motivated both the colonial and apartheid masters to create a “dual economy” that would exclude black people in the bantustans from achieving prosperity, from competing with white people and from playing a role in our economy except being cheap labour.
Thirty years later, you can drive through rural EC, it’s barren because private capital can only invest in consumerism rather than the creation of real wealth building assets. To this day, most black people exist on the periphery of our plutocracy and its development agenda.
Barriers for black people to engage in business are almost insurmountable. Government ANC or GNU is doing little to nothing to invest in the things in the basic things that we all need to live well and prosper: food, shelter, energy, water, infrastructure, social equity and environmental wellbeing.
So as far as I’m concerned, inclusive growth is something of a misnomer. Before we start talking about a sustainable inclusive economy we need to address all those unsustainable things including policies that stand in the way of being included rather than being others.
Remember political democracy without economic democracy is not possible.
Hi Johan,
As always - thank you so much for sharing such optimistic, inspiring insights. First and foremost, as South Africans, we need to step into our power - by knowing that we can!
As a public servant, I have come to understand that difficult task of "doing" in the age of social media, where everything that is done (action) is subjected to scrutiny. This often seems to support a leading narrative that it is safer to not do anything. Resulting in endless speculation (noise).
I'm interested to unpack one of your recommendations a bit further to explore nuances and underlying (perhaps hidden or uncomfortable) assumptions. See: "Expanding high-speed internet access, especially in underserved rural and township areas, is essential for integrating more South Africans into the digital economy. Innovative models like pay-as-you-go fibre, pioneered by companies like Fibertime, demonstrate that affordable connectivity is possible."
In imaging what rollout would look like, the following considerations emerge.
What about the unintended consequences of connectivity, such as access to gambling and pornography? Here, the chronology of interventions comes up. When we propose increased connectivity, would it perhaps be sensible to look at societal factors, and to take an intentional approach to developing community "social fabric" to see if we can cultivate more responsible Internet usage by addressing connectivity-enabled addictions more head-on? Here, I would imagine that policy makers can responsibly enable through two levers; firstly by regulation marketing. If increased connectivity will lead to increased marketing, then policy needs to be in place to ensure that low income households are not subjected to marketing of products and services that degrade social fabric. Secondly, through education - when increasing connectivity, we need to also increase knowledge of how to use the Internet more effectively, and responsibly.
These are just a few ideas that came up for me that I wanted to get your feedback on.
Thanks.