Patterns of Investing into Business R&D in South Africa

The paper explores the patterns of business investment in research and development (RD) using evidence from companies in South Africa, in comparison with indicators for a number of other countries. This study covers the period 2006–2016, the studied companies were grouped by the amount of RD expenditures (BERD), the number of reports on research performance for the first and last years of monitoring. A typical characteristic of private sector RD activities is the uneven distribution of resources in space and time. The major financial and other assets are concentrated within few large companies from a limited number of industries, while the majority of small and medium-sized enterprises invest in RD projects only sporadically, for a period of no more than two consequential years. Firms that perform RD for longer periods invest in RD incrementally and remain more persistent than enterprises performing less RD for shorter time periods. In view of the common nature of a number of patterns, these observations suggest different approaches to policies supporting RD performance in the business sector not only in South Africa, but also in other countries.

South Africa, R&D performance, BERD, concentration, persistence, volatility, business sector, policy