Technological Innovation and Sustainability: Do Homegrown Innovations Foster Greater Ecological Sensitivity? Simulation‐Based Insights From South Africa

Abstract

ABSTRACT Environmental sustainability remains a critical challenge, particularly for economies with high resource dependence and energy‐intensive industries like South Africa. Technological innovation is often regarded as a pathway to ecological resilience, yet its effectiveness may be shaped by its origin—domestic or foreign. Understanding these distinctions is crucial, as different types of innovations may have varying impacts on sustainability, influencing the design of effective policy interventions. This study investigates the role of resident (domestic) and non‐resident (foreign) technological innovations in shaping ecological load (EL) capacity in South Africa, while also considering the impact of economic affluence and energy consumption. Using data from 1981 to 2021, the study applies dynamic simulations of autoregressive distributed lag (ARDL) models and Kernel‐based Regularized Least Squares. The results reveal that resident innovations significantly enhance EL, with a 1% increase in Patent Applications by Residents (PR) improving EL by 0.033% in the long run. Conversely, non‐resident innovations have an insignificant effect. Additionally, economic affluence exerts a negative impact, with a 1% increase in income reducing EL by 0.61%, while energy consumption also contributes to ecological strain. These findings indicate that homegrown innovations play a crucial role in strengthening ecological resilience, whereas reliance on foreign technologies may not effectively address local environmental challenges. Policymakers should prioritize investments in domestic research and development and support technology localization strategies to enhance the relevance of foreign innovations. Strengthening local innovation ecosystems and integrating sustainability‐driven technological policies are essential steps toward achieving long‐term ecological resilience.