Do high-tech multinational corporations with local subsidiary companies generate innovations in South Africa? A critical analysis of evidence from the Business Innovation Survey (2005-2007)

Presenter: Dr Nazeem Mustapha, Chief Research Specialist, Centre for Science, Technology and Innovation Indicators (CeSTII), HSRC

Date: 06 April 2017  | Time:  12h30 – 14h00  | Venues: Pretoria, Durban, Cape Town

There are several pathways through which technological diffusion routinely takes place—in the movement of highly skilled professionals and high-tech machinery, or through the trade in intellectual property—and there is a strong consensus among economists that diffusion has the potential to generate economic growth. More specific to the prevailing belief is the idea that high-tech multinational corporations (MNC) actively promote diffusion in local markets through the actions of their subsidiary firm(s) inside a country, which, in turn, results in greater innovative capability of local firms and people. However, in developing countries the evidence that this belief actually holds in practice is slim, and critical questions therefore need to be asked as to why this is so.

Do MNC invest in local environments in order to conduct R&D activities locally?

Do MNC engage in local innovative practices? Or, are MNC simply releasing or ‘dumping’ high-tech products onto local markets?
Are the types of behaviour that MNC exhibit in developing countries creative/constructive or exploitative?

This seminar will present results from an econometric analysis that examined a series of six hypotheses concerning whether MNC subsidiaries are likely to produce more innovations in South Africa in relation to their ‘indigenous’ South African counterparts.

For more information about the CeSTII seminar series on Innovation and Development, contact Gerard Ralphs (gralphs@hsrc.ac.za).

Kindly RSVP by 5 April February 2017

The HSRC seminar series is funded by the Department of Science and Technology (DST). The views and opinions expressed therein  as well as findings and statements of the seminar series do not necessarily represent the views of DST.

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