The article examines changes in the South African national system of innovation (NSI) since the onset of democracy in 1994. In particular, the recently completed 2001/02 Survey of Research and Experimental Development (R&D) is used to quantify the shifts in R&D activity for the major business, government and higher education players. The major flows of R&D expenditure are found to be within rather than between firms. Interaction between higher education and firms is encouraged by agency funding and is increasing from a relatively low base. The NSI itself has remained stable over the transition to democracy, with small shifts in research emphasis and no apparent major loss of capacity. There are, however, warning signs that the lack of availability of high-level skills may limit its further growth. There is evidence that the NSI has the potential to respond to the designated thrusts of the national R&D strategy.
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