This paper examines the accumulation of technological capabilities through interactive learning between foreign firms in South Africa and local businesses. It asks how collaborative learning can help develop technological capability and how it can be encouraged in South African industry.

The authors stress the role of trade policies in opening up the South African market, which has led to restructured industrial networks as firms improve or close down in the face of foreign competition. They conclude that the experience and capability of local multinational subsidiaries are key determinants of collaborative learning and that, although institutional support in South Africa is lacking, initiatives undertaken by individual firms can enhance learning among local businesses.