Abstract:
Technological innovation drives development, and for developing countries it presents an unique opportunity to not only catch-up to technology leaders in the developed world, but also to leapfrog technology and gain a dominant position in certain markets (Lee & Mathews, 2013). It therefore makes logical sense that emerging should develop the capacity to generate knowledge and innovate. In the South African context, the Bio-economy strategy strives to achieve this goal, but thus far innovation seems to be lacking with few products that are adopted in the market. This is evident in the local molecular diagnostic industry where the reagents that are a big cost component of clinical diagnostic tests and research and analytical services are predominantly imported at high cost by local users.
The objective of this research was to assess what the challenges are to localised manufacturing of molecular diagnostic reagents, and it achieved this through use of a exploratory case study methodology guided by the Technological Innovations Systems framework of analysis. The study also looked at the localisation strategy that should be followed to maximise socio-economic spillover and the role that government should play through policy intervention.
The findings of this research indicate that the inaccessibility of sufficient funding, lack of regulation of imports, and lack of government support for local firms restricts the ability of domestic firms to compete within the local market. Alternatives exist in the export market where there is potential for high earnings, provided that firms leverage their competitive advantage to create an unique value proposition. Government would have to intervene by providing required funding, protection of the local market, coordinate and facilitate collaboration and assist firms in capability building in order to compete in the export market.
