Topic 3 Summary

In conclusion and aligned with DST (2012) and DST (2008) as well NPC (2012), taking into consideration the context of South African market failures, the provision of training levies as part of the IT SETA program are a means of mobilising additional resources for skills development.

5.2.4. Topic 3 Summary

All the firms studied experience the weakness in South African NSI firstly through its skills deficiencies that create bottlenecks in knowledge flow. This will ensure that the parent HQs remain cautious in investments in R&D and innovation activities and skills. The three firms do not invest in R&D and innovations because of the negative projections and disabling factors in the South African context. The argument here is that South Africa host country characteristics and business factors influence the directions, priorities and intensity of investment in SD. All firms are looking to maximise their short-term profit and shareholder value with IBM HQs having the most intense focus on pleasing investors.

There are contextual causes that determine whether the MNES invest in South African R&D and innovation activities. Mosia (2012) and Samuel (2013) point out that the main cause of lack of investment in R&D is the FDI behaviour of maximising profits on short term and South African characteristics of poor

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education, infrastructure and property rights. The situation may change if business government consultants will design policies.

All the firms studied behave in a certain way outside their borders when they invest in CSI or CSR projects. Several South African characteristics shape this behaviour and one of them is the ICT skills deficiencies. Therefore, the firms studied invest in general education and general technical education outside their borders using CSI and this investment contributes to a better business environment for them and for SA as a whole. The researcher focused on a number of factors/variables/ dimensions that contribute to the firms’ efficient investment in skills of South African people’s competitiveness. The following table uses the same three types of measurement for the four qualitative variables similar with the previous two tables with four different variables: transfer of technology, innovative capacity and R&D, CSI function and the transformational process related to investment in skills outside the firms’ borders and at the level of South African society.

The first variable represents the way the transfer of technology outside the firms’

borders takes place. The second variable represents the development of the innovation capacity that Porter (1999) defines by the number of IPs launched in a period and its link to R&D intensity. The third variable represents the CSI pool of projects implemented by the firms studied and the fourth variable represents the level of transformation from a white dominant to a fair representation of the demographics by applying South African legislation.

All these variables contribute to an investment in skills development with efficient results for the firms studied and for South Africa as a host country. No studied firm innovate but Cisco SA and IBM SA enhance the culture of innovation through supporting innovation competitions and emerging entrepreneurs (Cisco and IBM website).

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Table 7. Qualitative variable table for topic 3 with the evaluation of the four dimensions

Level/variable Transfer of

Figure 6. Cases comparison – Topic 3 4

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The graph above represents the link between the four dimensions discussed and the value of the qualitative measured variables. The outcome points towards Cisco SA that has a better rating in transfer of technology because its focus is to train students in top technologies and not to transfer medium or low technical knowledge or in general education as the other two firms do. IBM SA works with universities in technical education but not in core ICT research. DiData is more involved in investment in skills development for social projects and its links with universities are not so active.

The South African government incentives for skills development offer all these firms opportunities to save part of their investment in SD in an on-going basis and IBM SA and DiData make intense use of them while Cisco SA offers niche certification and training to many firms, including IBM SA and DiData, being MICT SETA approved. If MICT SETA does not apply for special Cisco training, the firms pay for it because it is an investment in skills for their immediate business needs.

Transformation is an important socio political dimension that branches studied should apply to their workforce composition for the alignment to new South African laws and for social cohesion. Cisco SA participants revealed a higher level of transformation activities at their firm, which has the ambition to achieve the South African government targets despite the small pool of black skilled engineers available. The other two branches studied showed lower transformation.

In January 2015 IBM global leadership promised to invest in SA R&D and high technical education seven hundreds millions rands over ten years period that should create a different perspective on how IBM SA influence South African economic development. The researcher added to the graph an estimated outcome of this investment represented by a purple interrupted line.

127 5.3. Chapter 5 Summary

The way parent MNEs perceive SA as the host country, and the SA NSI system characteristics are major determinants of the direction, priorities and intensity of investment in SD for all three firms.

The empirical findings are in line with the literature research on the topic of investment in SD. However, less alignment exists in government plans or ministerial reports regarding who should do the bulk of R&D and innovation in SA (DST, 2012; DST, 2008; NPC, 2012). One of the experts who participated to the interview says that MNEs in the IT sector do not create jobs [or many jobs]

and another one says that their role is to transfer technology, but for this transfer to take place, South African Government must create technological capabilities.

128 CHAPTER 6 - CONCLUSIONS

6.1. Introduction

The goal of this research study was to find, under the topic of innovation studies, the answer to the research question of how the subsidiaries of ICT MNEs, part of the South African National System of Innovation (NSI), invest in skills. This chapter reaffirms the thesis statement regarding the way in which ICT innovative firms based in South Africa invest in SD and discusses the issues resulting from the findings based on the researcher’s reasoning and on the evidence accumulated, followed by the conclusions reached by the research.

This chapter concludes by considering the findings of the analysis of the factors, conditions, processes and behaviours that shape the activity of inward investment in SD under the boundaries set by the research question. All through the history of economic development, a strong link between innovation and skills dimensions was the main factor of economic growth, and this study focuses on how the SA context shapes the link between the two dimensions.

Innovation is uncertain, contextual and path dependent, hence, South African NSI offers a different context for innovation activities, including ICT sector innovations, compared with other countries. Recently the intensity of innovation activities showed slow progress or stagnation and the South African government commissioned many academic advisory or recommendation papers in order to determine why this happens. Some of these papers comment on the involvement of business in R&D and innovation activities and underline the importance of this contribution for achieving a higher number of innovations. An example is DST (2012) which pays special attention to the role of FDIs and local businesses in R&D and innovation activities, calling them the main contributors. The firms studied, part of South African business sector and South African NSI, are branches of global enterprises or MNEs, with many innovations in the rapid technologically changing ICT sector.

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On one hand, this research study focused on the way these innovative firms invest in SD at firm’s microeconomic level and on the other hand, focused on how the SA context influences the investment in SD activity at macroeconomic level.

This chapter contains the synthesis of the empirical study, implications of the study, limitations, recommendations for further research and the conclusions.

6.2. Synthesis of the empirical study findings as answers to the research