SOUTH AFRICA’S

➤ BOTTOM LINE: Whether measured by R&D or new commercial inventions, a significant share of
innovative activity in South Africa occurs among firms, universities, and research institutes in the Gauteng
City-Region. The city-region’s two major global research universities are significant hubs of knowledge creation
and do a good job of collaborating with industry on joint research. Rates of new commercial inventions
in the Gauteng City-Region fall in the middle of global peers, but patenting activity has declined recently.
Entrepreneurship—an important innovation driver since new firms must offer the market some new product or
process to thrive—is much higher in the region than in South Africa, but falls in the middle of global peer countries.
Venture capital investment, one measure of the presence of high-growth entrepreneurs, is still quite low
comparatively. This assessment reveals that the Gauteng City-Region has many of the ingredients of a global
innovation hub, but must continue to invest in R&D, increase new commercial inventions, expand entrepreneurship,
and facilitate collaboration between government, firms, and universities to develop new products and
processes that help its businesses expand into new markets.
C. TALENT
WHY IT MATTERS: Human capital—the stock
of knowledge, skills, expertise, and capacities
embedded in the labor force—is of critical importance
to enhancing productivity, raising incomes, and driving
economic growth. 61 Producing, attracting, and
retaining educated workers; creating jobs for those
workers; and connecting those workers to employment
through efficient labor markets all matter for
regional competitiveness and ensuring broad-based
economic opportunity for a metropolitan area’s
population. 62
The Gauteng City-Region’s demographic dividend
and steady flows of in-migrants ensure a growing
supply of workers for the regional economy.
In an aging world, the Gauteng City-Region has the
advantage of being relatively young. The demographic
profile of the city-region suggests that it will have
a significant supply of workers over the next two
decades. Growth in the working-age population will
also result from migration to the city-region from the
rest of South Africa and the world. As of 2011 approximately
44 percent of the population was born outside
of the city-region; 10 percent of residents were born
outside of South Africa. Of these international inmigrants,
nearly half are between the prime working
ages of 20 and 35. 63
Figure 25. Workforce replacement rate coverage in 2034
1.7
1.7
1.6
1.6
1.0
1.0
Required cover: 1.0 time
0.6
BROOKINGS
Mexico City
Cape Town
Gauteng
City-Region
Istanbul
Santiago
Rio de Janeiro
Warsaw
METROPOLITAN
POLICY
PROGRAM
Source: Brookings analysis of Oxford Economics data.
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