Windows of digital innovation in South Africa: digital capabilities for product, process, and service development

The chapter explores the transformative role of digitalisation in South Africa's manufacturing sectors, focusing on how companies are developing capabilities to seize digital innovation opportunities. The chapter introduces a 'digital capability matrix', which categorises firm-level capabilities into basic, intermediate, and advanced levels across functional areas, illustrating how these capabilities intersect to enable digital innovation. Case studies from South Africa's automotive, mining equipment, and engineering services sectors demonstrate the practical application of this matrix. The chapter highlights the heterogeneous adoption of digital technologies across sectors and companies, with significant variation in capability levels. It stresses the importance of foundational capabilities for engaging with advanced digital technologies. Additionally, the authors argue that manufacturing remains a critical engine of economic development in the digital age, as it fosters the development of essential digital skills, organisational capabilities, and business models. They emphasise that sustained industrialisation, supported by digitalisation, is key for emerging economies to harness the full potential of technological advancements.