Innovation Theory in the Age of the Knowledge Economy

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 (A review of The Evolution of the South African System of Innovation Since 1916 [Cambridge Scholars Publishing, 2009] by Mario Scerri)

  It is quite intriguing to follow how the birth of an African nation -South Africa- intersects with the evolution of what has the marks of a multi-disciplinary economic theory, in this case, the theory of innovation. This is precisely what happens in Mario Scerri’s The Evolution of the South African System of Innovation Since 1916 (2009), in which there are detailed accounts of virtually all the major historical phases of South African politics, ideological configuration and industrial development up to the emergence of the knowledge economy. Some of these phases include the segregationist period, the apartheid regime and the current democratic era. These eras are not Scerri’s sole concern even though they receive extensive explication. Rather he tracks the evolution of South Africa’s national systems of innovation in terms of their ruptures and continuities. Scerri defines national systems of innovation “as networks of institutions within the borders established by nation states which determine the economy’s ability to develop and to absorb innovation” (p.3). He also points out that “a system of innovation may be identified by its topography of diverse “knowledge stocks”, mapping of concentrations of power, of the distribution of knowledge and of the relationships between the various power/knowledge nodes” (p.37).

 Jan Smut, a South African prime minister during the segregationist period, is a particularly curious figure. He was a scientist with a modern outlook who wanted South Africa to take its place in the ranks of the industrialised nations of the world but he believed in the anti-modernist doctrine of white supremacy in which racial others were to be brutally exploited even if they happened to be in the majority. Alongside this glaring contradiction, he also believed in the gains of science and technology as indispensable ingredients of the march towards modernity. And so his contradictory beliefs, more or less, shaped the emergence of the first framework for the country’s system of innovation. It was a framework that was both modern and anti-modern and which in the long run proved to be quite unsustainable. In order to aid South Africa’s technological drive, a key institution, the Council for Scientific and Industrial Research (CSIR), was established in 1945. However this institution was marred almost from the very beginning by its inability to provide adequate advisory inputs as a result of a counter-productive bureaucratic culture and also an absence of a vital human sciences component in its mandate.

When the apartheid regime came into power in 1948, it merely consolidated the inherent contradictions in Jan Smut’s framework. Blacks were stripped of their lands and denied equitable labour rights. In a nutshell, apartheid consecrated their various forms of institutional oppression for the benefit of white economic and political powers. As the momentum for political change grew in other parts of the world in the wake of democratisation and widespread decolonisation in continents such as Asia and Africa, South Africa gradually assumed a pariah status culminating in her expulsion from the Commonwealth. The international anti-apartheid movement waxed stronger while within South Africa itself, the Sharpeville massacre and later the Soweto revolts of 1976 drew even greater opposition to apartheid. In many respects, South Africa became thoroughly ostracised even though it was able to develop a military-industrial complex to counter its mounting siege mentality. The military-industrial complex was limited in its ability to generate the extent and volume of technological spillovers necessary to have a truly decisive impact on the national system of innovation because of its basically sectoral configuration.

 From the perspective above, apartheid became unsustainable as blacks had been so economically disenfranchised to be able to create supportive internal markets for the economy. On the international front, South Africa’s already glaring isolation increased. From a capitalist point of view, apartheid had become a failure. Between 1991 and 1994, there was a hiatus in national economic planning as the apartheid regime was engrossed in negotiating its exit with representatives of the African National Congress.

 The ANC assumed political power in 1994 and two years later adopted a neoliberal approach to national development which some observers argue did not constitute a radical change in terms of strategic economic planning. Scerri attributes this shortcoming to a lack of technical decision-making capacity. Here, Scerri makes perhaps his most important argument in claiming that a well-conceived interventionist approach is required to transform the fundamental structure of the national economy in order to address the following; a] redress the abuses and excesses of apartheid; b] protect the economy from the rapacious effects of neoliberal dynamics and ideology; c] mitigate the drawbacks of incessant waves obsolescence experienced by human capital within the context of the knowledge economy. Indeed technological innovations have not only undermined the traditional preoccupations of classical economists but also radically altered the landscape of human capital formation. In this regard, Scerri argues, “the accelerating demand for skills in a context where the obsolescence rate of human capital is unprecedented in history fundamentally affects the homogeneity of labour and has a significant impact on the traditional power relations between labour and capital. This effect, which tends to fragment organised labour, tends to be more pronounced in those economies that are increasingly based on the development of broad based human capital” (p.42). In this way not only are  economists forced to think differently, nations are also compelled to act differently.

 Scerri’s language is particularly exciting for avoiding pedantic economic jargon. Instead, he employs what could be deemed storytelling devices to track the birth of a nation and its interconnections with a paradigmatic rupture in neoclassical economics that ushered in innovation theory. It is indeed a study of considerable power and distinction.

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 Sanya Osha is a research fellow at the Tshwane University of Technology, South Africa.

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