Enabling Inclusive Technological Change through Transformative Policies: Frugal innovations from medical device manufacturing firms in South Africa

The lack of appropriate and affordable medical devices to serve the needs of developing countries is a global health concern; a need felt even more acutely during the COVID-19 pandemic. In recent years, the growing medical device manufacturing sector in South Africa has drawn policy attention, with some studies highlighting its significant potential to contribute to South Africa’s National Development Plan 2030. The prompt deployment of funding and home-grown technologies by the South African government during the pandemic to address medical device and diagnostics shortage through local manufacturing reaffirms the country’s capabilities. This study explores firm-level innovation processes through a fresh lens. It adapts the heuristics of an ‘institutional triad’ to highlight the institutions, interactions, and tensions between the three stages of innovation – generation, production, and diffusion – which are influenced by different policy domains. Further, it explores the ways in which the harmonisation of policies can enable South Africa’s medical device manufacturing sector to reconcile the twin objectives of industrial growth and social development, including lowering its own healthcare cost. Empirical evidence from three case studies demonstrates that, despite facing many constraints and challenges to innovate, some small and medium enterprises (SMEs) engaged in medical device manufacturing in South Africa have high levels of innovation capabilities and have successfully brought various frugal innovations to market. Frugal innovations in this study are fundamentally new products – they are not adaptations or stripped-down versions of products initially developed for Western markets. The evidence suggests varying levels of involvement of the state in the three case studies presented. However, much more proactive support, particularly to innovative SMEs, would be needed to enable more inclusive technological change where both economic and social goals can simultaneously be achieved.