Innovation, investment, and skills needs, and resilience during the COVID-19 pandemic : lessons from a survey of small and medium-sized enterprises in Algeria

Abstract

In 2020, Algeria’s GDP fell by 6% due to the pandemic and low oil prices but rebounded by 3.5% in 2021. High oil and gas prices, partly due to the Ukraine conflict, have benefited Algeria, though challenges from COVID-19, supply chain issues, and climate change persist. Inflation rose to 9.2% in 2022, straining households. The IMF forecasts 3.4% GDP growth for Algeria in 2023, slowing to 2% in the medium term. Key issues include limited economic diversification, weak competitiveness, and insufficient job creation.

A 2021 survey by the Economic Commission for Africa (ECA) involving 985 business enterprises in Algeria highlighted that innovation and digitalization are critical for economic resilience and growth. The survey found that companies generally pay little attention to innovation, which is closely linked to their digitalization efforts. Enhancing innovation and digital skills is essential for job creation, particularly for women and skilled workers, and for strengthening the private sector’s role in economic diversification. These insights are crucial for formulating effective public policies to address Algeria’s economic vulnerabilities and promote sustainable growth.