213 © Springer International Publishing AG, part of Springer Nature 2019 S. O. Oloruntoba, M. Muchie (eds.), Innovation, Regional Integration, and Development in Africa, Advances in African Economic, Social and Political Development, https://doi.org/10.1007/978-3-319-92180-8_14 Regional Integration and Knowledge Flows: Effect on Manufacturing Productivity in Southern Africa Alexis Habiyaremye Introduction The tacit nature of technological knowledge often renders face-to-face interactions a necessity for technology to diffuse because knowledge circulates best locally (Kesidou and Szirmai 2008). It is through those interactions that tacit knowledge can be translated into explicit, usable new knowledge. This explains why geographic proximity is important for technological learning by facilitating direct interactions and knowledge diffusion. Thanks to its impressive diamond deposits and its geo- graphical proximity with the South African economy, Botswana is thus well poised to beneft from mastering and applying technologies that already exist in its south- ern neighbour. Botswana’s geographic and economic proximity with South Africa is thus one of its most important winning cards for a successful technological catch- up and long term-growth. The argument that Botswana can derive many productivity and growth advan- tages from its interactions with South Africa is also rooted in the various theories of international knowledge fows and their implications for economic performance of the recipient. These theories stress the importance of knowledge as a weightless production factor that can diffuse across national borders through various channels, such as trade and investment fows that embody technological knowledge as well as management knowhow and practices (Barba Navaretti and Soloaga 2001). Grounded in the endogenous growth literature, they emphasise two mechanisms of interna- tional technological knowledge transfer: transmission of ideas that can be traded independently from goods and the trade in intermediate inputs and capital goods that incorporate new ideas, known as ‘the lab-equipment model’ (Rivera-Batiz and A. Habiyaremye (*) Human Sciences Research Council, Cape Town, South Africa e-mail: habiyaremye@merit.unu.edu