Beyond technological determinism: Lower technological intensity and innovation in developing country firms

Helena Barnard, Rutgers Business School, The State University of New Jersey

This study investigates the relationship between innovation and categories of technological intensity in South Africa, a middle-income developing country. The likelihood of firms being innovators is correlated with their industry’s technological intensity, i.e. extent of R&D spending, but different types of innovation investment dominate in different categories – marketing for services, embodied technology for the less “knowledge-intensive” categories, and training for medium technology manufacturing. When focusing only on innovator firms, innovators’ level of investment in innovation is determined by firms’ outward orientation and absorptive capacity, not technological intensity. The lower the technological intensity of an industry, the more directly does innovation offer economic benefits for the firm, and potentially the economy at large.

Date: 16 February 2006