Green markets of the future: An economic opportunity also for newly industrializing countries and South Africa?

Competences for green technologies in Newly Industrializing Countries (NICs) are becoming increasingly urgent from a global perspective. These technologies open up the opportunity for reducing emissions and modernizing the infrastructure, and the prospect of exporting them can add an incentive for NICs to push in that direction. The paper analyses whether or not NICs have already obtained some of the competences necessary to exploit these opportunities. It uses innovation indicators for publications, patents, and trade. The results indicate that some of the NICs, among them South Africa, have already started to develop the necessary build up of competences, but others are unlikely to benefit from the economic opportunities. The wide range of results for different green technologies within South Africa underlines the need to perform such analysis on a disaggregated level. Furthermore, the green technology development is embedded in the overall performance of the South African innovation system, and depends on its improvements. A widening of the policy focus from a narrow definition of R&D institutions towards both the demand side and environmental regulation is necessary. Strengthening environmental regulation in South Africa must not be seen as a trade-off between environmental protection and economic development, but as an instrument of demand side driven innovation policy in one of the fastest growing technology sectors.