A shift is underway to move innovation from research spaces into factories, jobs and businesses, as government and industry leaders push for a stronger link between technology, industrial growth and small business development.
The focus is no longer only on policy design, but on whether innovation can deliver measurable economic results, particularly for small businesses and startups expected to play a central role in future growth.
This emerged at the inaugural Policy Dialogue on Industrialisation through Innovation in Ekurhuleni, where policymakers said the main challenge is turning research into industrial production at scale.
The two-day event also featured participation from 20 exhibitors showcasing innovation, manufacturing solutions and technology-driven products linked to industrial development.
Science, Technology and Innovation Minister Prof. Blade Nzimande said innovation must be directly linked to industrial development.
“If you are industrialising without innovating, what exactly are you doing?” he said.
The dialogue was hosted by the Departments of Science, Technology and Innovation and Trade, Industry and Competition together with the National Advisory Council on Innovation (NACI) and the OR Tambo Special Economic Zone.
SMEs placed at the centre of industrial transformation
Small and medium enterprises (SMEs) and startups were identified as key drivers of innovation-led industrialisation and future job creation.
The policy direction points to science and innovation parks within Special Economic Zones (SEZs) as a major support tool. These are expected to give SMEs access to shared laboratories, testing facilities and industrial infrastructure that are often too costly to access individually, helping them move from ideas into production.
The strategy also highlights targeted financing and stronger commercialisation support, including linking SMEs to development finance institutions to help turn prototypes into market-ready products.
SMEs are expected to adopt new technologies such as artificial intelligence, robotics and biotechnology in order to remain competitive, shifting from low-tech operations to higher-value production.
Improved policy coherence between industrial, trade, skills and infrastructure systems is also expected to reduce fragmentation and make it easier for small businesses to access funding, training and market opportunities.
At the same time, regional integration through SADC and the African Continental Free Trade Area (AfCFTA) could open access to larger markets, allowing SMEs to scale beyond domestic limitations.
However, implementation and access at scale remain key concerns raised during the discussions.
From research to industrial output and policy pressure
Trade, Industry and Competition Minister Parks Tau said innovation must move beyond research institutions and translate into real economic activity.
“Innovation drives productivity, competitiveness and technological advancement. Industrialisation creates jobs, expands productive capacity and unlocks new opportunities for economic participation,” Tau said.
He said stronger partnerships are needed between government, business, labour and academia.
“No single institution can achieve this transformation alone. We need partnerships that turn ideas into industries and industries into jobs,” he said.
Tau added that investment must prioritise advanced manufacturing, green energy, digital industries and mineral processing.
Nzimande also added that innovation and industrialisation must operate as a single system, warning that reliance on imported technology continues to slow local industrial development. He noted that research and development spending remains at 0.61% of GDP, below the 1.5% target for 2030.
He also stressed the importance of regional cooperation for long-term growth.
“We may grow innovation here, but in isolation it will not take us anywhere,” he said.
Manufacturing decline and regional industrial opportunity
Nomhle Ngwenya of the National Advisory Council on Innovation (NACI) said South Africa’s manufacturing base has weakened significantly over the past decades.
Manufacturing’s contribution to GDP has dropped from about 23% in the 1990s to below 10% today, with more than 300,000 jobs lost.
She warned that weak production capacity increases dependence on raw material exports instead of value-added manufacturing.
“The lesson is clear. If you do not build production capacity, you remain a supplier of raw materials instead of a manufacturing economy,” she said.
Ngwenya pointed to the African Continental Free Trade Area (AfCFTA), which connects a market of 1.3 billion people with a combined GDP of about $3.4 trillion, as a major opportunity for industrial expansion.
However, she stressed that this depends on stronger production systems, infrastructure and regional value chains.
The policy direction is expected to shift focus from planning to execution, with SMEs positioned as central participants in industrial growth, innovation systems and African trade networks.
