South African National Survey of Research and Experimental Development: manufacturing sector R&D at a glance, 2014/15-2018/19. Fact sheet 34

Key Points

Manufacturing sector R&D spending reached R3.166 billion in 2018/19, accounting for 22% of total business R&D.
Structural shifts in the South African economy have resulted in a decline from 17.5% to less than 15% of GDP.
COVID-19 exacerbated challenges, emphasizing the importance of innovation and agile business models.
The government's Industrial Policy Action Plan aims to enhance manufacturing competitiveness through significant support.

Abstract

South Africa has experienced a steady decline in the manufacturing sector over the last few years. It is common knowledge that manufacturing can raise productivity and boost a country's R&D spend. In South Africa manufacturing now accounts for less than 15% of GDP, down from 17.5% in 2000. Examining R&D spend, we observe that the manufacturing sector's share of total business R&D spend in 2018/19 was R3.166 billion (22%). The decline of manufacturing signals structural shifts in the South African economy, with accompanying job losses. COVID-19 has compounded the situation, underscoring the need for resilient, agile business models and new products and services for changing conditions. Government's policy response includes the Department of Trade, Industry and Competition's Industrial Policy Action Plan with a multi billion rand manufacturing and competitiveness enhancement programme (MCEP). This will provide much needed support.

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