ABSTRACT
South Africa’s future security and well-being will largely depend on restructuring and revitalising it’s stagnating economy in a manner which addresses the needs of the majority of its people. In his influential work, The Competitive Advantage of Nations, Michael Porter (1990) concludes that the success of an economy lies in the productivity in which a nation’s resources are employed. High productivity bestows a “competitive advantage” on domestically based firms, enabling them to outperform their foreign rivals in international markets. At the heart of sustained productivity is the notion of the economy, continually upgrading itself. A nation’s firms “must relentlessly improve productivity in existing industries by raising product quality, adding desirable features, improving product technology, or boosting efficiency” (Porter, 1990:6). This upgrading constitutes innovation and investment. Given the severity of the economic crisis which faces South Africa, the belated recognition of the long term significance of investment and productivity is not surprising.
