Changing Swaziland’s Development Paradigm through the National System of Innovation
By Tengetile Hlophe and Thula Sizwe Dlamini
The past decades have highlighted the pivotal role of innovation in sustainable development. Championed by phrases such as “innovate or parish” in the business sector, and “innovation driven development” in national strategies, innovation emerged as the much needed injection to stimulate growth and development. Even the new global development imperatives such as the Sustainable Development Goals’ Goal 9 and Agenda 2063 clamour innovation led development.
Similarly, the physicist and Nobel laureate Abdus Salaam in his book “Notes on Science, Technology and Science Education in the Development of the South” observes that the mastery and utilisation of modern science and technology is what separates the rich from the poor countries. The successful economic and social development of any country is dependent on their capacity and ability to absorb, disseminate and utilize modern science, and technology in their development.
In Swaziland, His Majesty King Mswati III has, on numerous occasions, made the call for country to firm up its investment on innovation related activities.
Undoubtedly, innovation is a driver of social and economic change. Innovation presents opportunities for countries to improve industrial production, increase efficiency, empower communities, and accelerate overall economic growth. This has led countries to pay attention to the flows of resources, knowledge, and technology to cultivate, and enhance innovation capacities at national level.
However, the challenge for many developing countries, like Swaziland, has been the ability to create a conducive environment to spur innovation-led development. To illustrate, industrial performance in Swaziland has remained low over the years. The manufacturing sector declined from a growth rate of 2.2% in 2012 to 1.0% in 2015, while the tertiary sector decreased from 3.8% to 1.6% during the same period.
Whereas the revised National Development Strategy calls for the establishment of a science technology and innovation (STI) powered manufacturing sector, local industry in Swaziland is characterised by small and medium enterprises (SMEs) operating in low value-added activities , with a larger number of goods and services imported from South Africa. Making the situation perverse is the failure of past investments to inspire the kind of industrial output needed to create jobs, drive social development, and economic growth.
For example, while the country has focused its efforts on attracting Foreign Direct Investment, a 2012 study by World Bank research economists Michael Engman and Thomas Farole , reported that FDI in Swaziland had been unsuccessful in improving existing production capacity nor in expanding Greenfield investments in the domestic economy, raising questions on what more can Swaziland do to expand industrial output in the domestic economy?
A prerequisite to understanding what the country can do is really getting a clear picture of how science technology and innovation can be coordinated to bring about the much acclaimed benefits of STI in producing technologies that can enhance productivity growth, lead to the production of new industrial goods and services, and inspire large gains in economic development. A requirement to understanding the interplay between STI and economic development is understanding the national system of innovation (NSI). The NSI has become a familiar term, especially with the Ministry of ICT. This highlights the urgency for Swaziland to strengthen its NSI. So what is an NSI? How does it work, and what can Swaziland do to improve its NSI?
Frank Bartels and colleagues define the NSI as ‘the envelope of conforming policies as well as private and public organisations, their distributed institutional relations and their coherent social and capital formations, that determine the vector of technological change, learning and application in the national economy’. Also, Azar Jammine of the National Advisory Council of Innovation in South Africa observes that the NSI is a means through which a country creates, acquire, diffuse, and put into practice new knowledge. A healthy NSI is thus identified by its ability to convert knowledge to financial capital and financial capital to wealth, improved livelihoods, and industrial growth. This implies a clear understanding, of the actors, resources, laws, incentives, interaction, linkages, and needs of the national environment.
Yet the question remains: where do we begin? Countries that have understood their innovation systems have paid attention to their flows of knowledge and technology. Through investments in science, technology and innovation (STI), research and development (R&D), infrastructure, robust education systems (from primary to tertiary education), quality of public institutions, and institutional capacity; countries have provided a conducive environment to benefit from innovation. As a late comer, Swaziland can begin by learning from these countries.
In 2015 South Korea was the 11th largest national economy, while 50 years ago it had a GDP per capita of USD156, lower than the USD181 in Swaziland during the same period. In just under 50 years, South Korea has increased its GDP per capita to USD 27, 221 in 2015, while that of Swaziland increased to a measly USD 3,154 in the same period. The development of South Korea has largely been attributed to the strength and development of its NSI. South Korea has invested in strong STI and education policies and institutions. In 1973 South Korea built its first science town, Daedok, and established a university of science and research in 1971. South Korea has also increased R&D investment to 4.29% of GDP in 2014 compared to 2.13% in the world, and its development has relied on its human resource as the capital good.
Despite demographic differences, Swaziland can learn from South Korea’s development in the past 50 years. For instance, consistent and persistent enforcement of STI policies, establishment of appropriate institutions and supportive legislature, investment in human capital, knowledge systems, and infrastructure. This has driven the growth of South Korea’s industry and led the establishment of new industries in artificial intelligence, robotics, and advanced medicine.
Singapore is also a learning opportunity. Singapore also has no natural resources, and its population stood at 1.6 million in 1960 and depended on FDI, pretty much like Swaziland today. In 50 years Singapore has also emerged as a global technological power and business hub. Paying to its NSI, Singapore has adopted strategic polices and government intervention in STI development. For example, in the 1960s and 1970s when FDI was the main source of development, Singapore adopted policies to increase technology and knowledge transfer and adoption from multinational companies (MNCs), the country further attracted the establishment of MNC R&D centres in Singapore. Through extensive investment in skill development (vocational education and training) and R&D Singaporean industry rose from learning and copying foreign technologies to producing it.
Developing countries are also adopting the NSI approach to direct and channel technological learning. South Africa, Egypt, and Nigeria are some countries that have adopted the NSI in their development. South Africa has been able to create university-industry linkages and the country is providing institutions and legislature that supports technology transfer, investment in R&D, funds innovation, and the commercialisation of research.
NSI assist policymakers to identify the gaps in policy, and in institutions that hinder innovation. Understanding the NIS leads to the adoption of policies, economic programmes, and initiatives that provide a conducive environment for innovation. This ultimately leads to the production of a highly skilled labour force, new industries, increased employment, and improved social well-being.
Understanding the NSI could pave the road for the next 50 years of Swaziland’s development. The National Development Strategy and Poverty Reduction Strategy acknowledge the use of scientific knowledge, technology and innovation in improving social wellbeing and economic development. For instance, through innovation driven manufacturing and agricultural research systems that improve the productivity of rural agriculture. This requires an understanding of the needs in human resource, technology, and institutions that support the capacities and capabilities of the country to drive innovation. This could be in the form of policies that fund R&D activities, incentives for innovative firms, procurement of technology, and protection of intellectual property.
Swaziland can capitalise on some identifiable strengths in its innovation system. First, the ballooning youth population (otherwise known as a youth bulge) is an opportunity to inculcate an innovative culture among the country’s citizens. Second, the Royal Science and Technology Park provides a platform for tinkering with different technologies to produce innovations and engage in R&D activities, as well as creating those much needed university-industry linkages in the economy. Third, efficiency in the education budget could increase funding for quality science technology engineering and maths (STEM) education, improve technical vocational education and training (TVET), and improve funding for university R&D and infrastructure development. Fourth, strengthening standards, competition and intellectual property laws could spur competition and quality production processes in industry. Lastly, Alec Ross in his book “Industries of the future” points out that women empowerment is a fundamental indicator of an innovation culture. Demographic statistics show that there are 52% more women than men in Swaziland; while the enrolment of this group in primary and tertiary education is also high, statistics show that it is very low in sciences and engineering. This presents an opportunity for the country to channel more women towards STEM careers.
As well, research has shown that economic growth alone cannot lead to poverty reduction. Therefore, addressing the needs of the people will be best understood in the NSI. Building the relevant STI institutions to improve the absorptive capabilities and capacities of the poor to tinker with technology, use, and adopt technologies and innovations that will improve their standard of living is the first point of call. Why? Because the national system of innovation is paramount to addressing Swaziland’s development challenges, through the creation and operationalisation of an efficient ecosystem of science technology and innovation.
About the authors: Tengetile Hlophe is an Associate Researcher and Thula Sizwe Dlamini is the Executive Director at the Swaziland Economic Policy Analysis and Research Centre. They can be reached at firstname.lastname@example.org and email@example.com. They write in their personal capacity.