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Regulatory authorities in developing economies not only face challenges regarding their own capabilities, but also have to grapple with heterogeneous levels of technological and innovation capabilities in firms. This paper draws from a firm-level analysis of internally created knowledge, externally sourced knowledge and firm heterogeneity among medical device manufacturers in South Africa to consider the corresponding evolution, development and deployment of regulatory capabilities in firms in their efforts to comply with the country’s health and allied products regulatory authority requirements. From this consideration, the paper explores possible broader adjustments in the country’s medical device sectoral system of innovation which would promote, nurture and embed the desired regulatory capabilities in firms to enable medical device firms to be locally and globally competitive and to contribute optimally to the country’s health sector objectives.

This thesis concerns the influence of healthcare systems regulation on firm-level capabilities and affordable healthcare technologies. Regulatory change is highly contentious, critics arguing that regulatory changes interfere with the efficiency of the market, and advocates arguing that well designed regulatory changes make markets more efficient and ensure market outcomes are more equitable. To date, very few studies analyze the influence of regulatory change on the medical device industry, and its ability to manufacture and supply affordable healthcare technologies. To respond to this gap, this research employs the Sectoral Systems of Innovation (SSI) approach as a theoretical framework to analyze the influence of regulatory changes on industrial capabilities in medical device industries and affordable healthcare technologies in South Africa and the United Kingdom. A mixed-method approach, focusing on three cases of regulatory change, emphasised documentary analysis and questionnaire-guided interviews to collect primary and secondary data from different sources in the healthcare systems of the two study countries. Regulatory changes facilitated some firms to create new strategies and innovative capabilities. Regulatory changes enabled some firms to develop close collaborative linkages with external providers in search of competitive advantage and improved market positioning. One reactive regulatory change, in particular, illustrated negative influence on innovative capabilities. Smaller firms were at a particular disadvantage in adapting to regulatory change. In the South Africa case, the more stringent regulatory requirements made it hard for domestic suppliers to enter the supply chain and led to joint ventures mainly with multinational corporations. The thesis argues, with empirical evidence, that a more enabling and discriminating regulation that takes into consideration of firms’ technological capabilities can achieve inte

This report emanates from a study commissioned by the Institute for Economic Justice (IEJ), a South African-based think tank. It was carried out between August 2021 and September 2022. With the IEJ, the researchers sought to answer the following main research question: "How best can African countries harness and deploy lessons from the Covid-19 pandemic and from other relevant local manufacturing experience, to develop and enhance sustainable capabilities for local manufacturing of medical health products?" The Covid-19 pandemic has revealed that fractures in global pharmaceutical and medical value chains can affect any country; what differs is how countries respond through harnessing or repurposing available capabilities. The main issues emerging from this study point to the need for deliberate, holistic, agile and consistent policies that can stimulate and sustain local production of products for the medical sector. There is the need for dedicated investment to generate the required range and levels of competencies, capabilities, and skills for different points of the value chain, including abilities to scale up. There is also the need for leadership capabilities, which will limit the fragmentation that can be caused by external influences or agendas driven from outside the countries or continent. External resources – financial, policy, and intellectual – are still required, but what is key are local structures and strategies for deployment of those resources. With poorly structured, poorly resourced and poorly functioning local structures, there will be limited prospects for sustainable local manufacturing, as has been the case. The findings and analysis revealed that Africa urgently needs to broaden and deepen its medical health technology manufacturing capabilities if it is to enhance local health security, become pandemic and epidemic ready, and contribute to global health security. In addition, there is great

Regulatory authorities in developing economies not only face challenges regarding their own capabilities, but also have to grapple with heterogeneous levels of technological and innovation capabilities in firms. This paper draws from a firm-level analysis of internally created knowledge, externally sourced knowledge and firm heterogeneity among medical device manufacturers in South Africa to consider the corresponding evolution, development and deployment of regulatory capabilities in firms in their efforts to comply with the country’s health and allied products regulatory authority requirements. From this consideration, the paper explores possible broader adjustments in the country’s medical device sectoral system of innovation which would promote, nurture and embed the desired regulatory capabilities in firms to enable medical device firms to be locally and globally competitive and to contribute optimally to the country’s health sector objectives.

This thesis concerns the influence of healthcare systems regulation on firm-level capabilities and affordable healthcare technologies. Regulatory change is highly contentious, critics arguing that regulatory changes interfere with the efficiency of the market, and advocates arguing that well designed regulatory changes make markets more efficient and ensure market outcomes are more equitable. To date, very few studies analyze the influence of regulatory change on the medical device industry, and its ability to manufacture and supply affordable healthcare technologies. To respond to this gap, this research employs the Sectoral Systems of Innovation (SSI) approach as a theoretical framework to analyze the influence of regulatory changes on industrial capabilities in medical device industries and affordable healthcare technologies in South Africa and the United Kingdom. A mixed-method approach, focusing on three cases of regulatory change, emphasised documentary analysis and questionnaire-guided interviews to collect primary and secondary data from different sources in the healthcare systems of the two study countries. Regulatory changes facilitated some firms to create new strategies and innovative capabilities. Regulatory changes enabled some firms to develop close collaborative linkages with external providers in search of competitive advantage and improved market positioning. One reactive regulatory change, in particular, illustrated negative influence on innovative capabilities. Smaller firms were at a particular disadvantage in adapting to regulatory change. In the South Africa case, the more stringent regulatory requirements made it hard for domestic suppliers to enter the supply chain and led to joint ventures mainly with multinational corporations. The thesis argues, with empirical evidence, that a more enabling and discriminating regulation that takes into consideration of firms’ technological capabilities can achieve inte