Digital Infrastructure, Technological Innovation, and the Development of South Africa’s Creative Economy: Evidence from an ARDL Analysis

Abstract

In South Africa, the culture and creative industry still faces structural constraints and rapid technological change. While digital infrastructure has opened new paths for creative production, distribution, and commercialisation, the extent to which digital connectivity and innovation translate into tangible, measurable performance in the creative economy remains a question. In this paper, the study investigates the short- and long-run relationships among technological innovation, telecommunications infrastructure, digital services intensity, and the performance of South Africa’s creative economy over the period 1999–2023 using an Autoregressive Distributed Lag (ARDL) model. The study uses patent applications as an indicator of formal innovation, as well as of fixed telecommunications infrastructure, digital services exports, and overall economic activity. The negative and marginally significant long-run association of digital services exports is also observed, while overall GDP is insignificant. The error-correction mechanism is negative and statistically significant, although its small magnitude suggests a slow recovery toward the long-run equilibrium. The study’s results show that the development of the creative economy is not only about increasing overall digital connectivity but also about innovation capacity and technological infrastructure within the creative innovation ecosystem. The study further observes that technological access alone is insufficient to achieve sector-level benefits and that it must be accompanied by stronger innovation support, commercialisation capabilities, and institutional support for creative companies. From a policy perspective, the findings call for greater attention to intellectual property development, innovation capabilities, digital production capacity, and infrastructure to help creative companies translate their technology into business. The study provides time-series evidence on the link between technological innovation, digital infrastructure, and creative economy performance in an African emerging-market context, and it offers policy-relevant insights for developing innovation-led creative sector development in South Africa amid uneven digital and economic development.