Abstract
Service innovation drives economic growth and structural change by stimulating the development of new sectors and productivity improvements in existing sectors. Resource based sectors are the main contributors to South Africa’s North West province’s economic output This paper illustrates how such a region can use industrial cluster formation and focused export promotion as a strategy to enhance service innovation. Four service clusters were identified within the above mentioned province through structural path analysis and power of pull methods. An export market selection model is applied to the identified service industrial clusters to reveal realistic export opportunities associated with each cluster. Finally, trade multipliers are used to show the spill-over benefits given an increase in the clusters’ exports. Policymakers can use these results to inform actions that may assist in the development of these services clusters to strengthen the province’s competitive advantage and diversify its output.
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