The innovation systems literature has provided a useful framework to analyse the linkages of firms and other organisations with both domestic and foreign actors. Although the concept of innovation systems was originally developed at the national level (Freeman, 1982; Nelson & Winter, 1982; Lundvall, 1985; Nelson, 1988, etc), the literature has expanded rapidly over the years. Since its origins innovation systems have been defined at different levels. National, regional, local, sectoral and technological systems of innovation now constituted alternative units of analysis to better understand the processes of creation, diffusion and use of knowledge. These different views, rather than conflicting, tend to complement each other and depend on the attributed boundaries to the system subject of analysis. This paper proposes that the reciprocal interaction between regional economic poles within the developing regions can be studied by employing systems of innovation perspective. The application of the systems of innovation perspective serves as a window to explore the quality of interactions in economic, education, productive activities and institutions. The importance of the regional dimension in stimulating the innovation capability and competitiveness of firms and regions has been examined by many authors (Asheim et al., 2003: Cooke, 2003, Wolfe, 2003, Malmberg and Maskell, 2002). The regional dimension is acquiring more relevance as the interactions between actors within the region become more intense. In the context of Africa, for example, the emergence of South Africa as an economic outlier in the region has created new challenges both opportunities and dangers for the rest of Africa. This paper suggests that a systems’ of innovation perspective might be useful to examine how South Africa, as a regional pole in Africa, interacts with the region by sharing knowledge, learning and capacity building. The system of innovation perspective is likely to expose the type of connections and interactions that take place: active or passive (Viotti, 2001). If the interactions take place on the basis of static comparative advantage where the economies in the region transact what they already produce, then the relationship is likely to be non‐dynamic and non‐transformative (passive). If the interaction takes place with economic linkages where the interaction promotes learning, innovative productive exchange, facilitate value added manufactures and service exchanges, then the relationship is likely to be transformative and is more likely to include developmental features (active). South Africa's economy, as a major player in sub‐Saharan Africa, is often seen as a potential growth engine for the continent. South Africa’s growth is believed to have a significant impact on the growth of other African countries, particularly its most immediate Southern African neighbours. Increasing trade partnerships, political collaboration, business linkages and mobility of people, point in this direction. However, the degree of penetration and the nature of the impact have not yet been largely examined in the literature, partly due perhaps to the complexity and wide range of factors that can be taken into consideration. South Africa is not only the largest economy in Africa but also the most technologically advanced. The innovation system in South Africa has evolved extensively, especially since the mid 1990s. In a relatively short period of time, South Africa has managed to frame numerous policies and institutions to accelerate domestic innovation and technology development as well as improve the absorption of imported technologies. Unfortunately this is not the case for most African countries, where adequate systems of innovation are still at an early stage of development. Therefore, the impact of South Africa’s innovation system in other African countries needs to be taken into consideration. Technologies cross national boundaries through many channels, ranging from traded products to information provided by foreign buyers and suppliers, mobility of skilled labour, informal contacts and different forms of investment abroad. Growing trade relationships and investment portfolio of South Africa in the rest of Africa could thus have an effect on the financial and technological linkages with its African partners. In a similar fashion, South Africa’s leadership role in African political partnerships and economics agreements could serve as a platform for collaboration in the establishment and harmonization of innovation systems. Nevertheless, despite the great support that South Africa has received from the international community (mainly from industrialised countries), the ‘emerging power’ of South Africa in an African context has raised voices of scepticism in the acceptance of its leadership in the continent. The extent of the impact during the last decades needs to be carefully measured according to South Africa’s particular history. During the pre‐1994 apartheid South Africa’s economic and political presence in Africa (and the rest of the world) was limited by a period of sanctions. Therefore “real” impact can only be examined after the mid 1990’s. This chapter tackles with these issues, examining a variety of factors related to South African economic and innovation systems as well as their dynamics, detecting opportunities and major future threats for other African economies. In the view of increasing socio‐economic interactions within developing regions, this issue requires particular attention in research studies.
