This publication is a comprehensive assessment of the innovation system of South Africa, focusing on the role of government, and providing concrete recommendations on how to improve policies which impact on innovation performance, including R&D policies. Post-apartheid South Africa has succeeded in swiftly opening its economy to international trade and capital flows, and in stabilizing the economy while achieving reasonably good growth performance, mainly driven by productivity gains. However, important socio-economic problems persist, especially unemployment, poverty and the exclusion of a large fraction of the population from the formal economy. The country is now in the middle of two more specifically economic transitions: i) responding to globalization and ii) transforming the structure of the economy away from its former heavy dependence on primary resource production and associated commodity-based industries. In this context, enhancing innovation capabilities is key to a sustained improvement of living standards based on productivity-driven growth. This review assesses the national innovation system of South Africa from this perspective, identifying areas and means for improvement with an emphasis on the role of public research organizations and policies.--Publisher's description.