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.