Encouraging innovation for productivity growth in Africa

Abstract

Innovation is the main driver of economic growth but the capacity to innovate is quite low in most African countries, both in the private and in the public sector. Thus the ability to adopt new technologies and adapt them to local conditions will be crucial first step to increase productivity, which is a precondition for growth and decent employment. The empirical analysis shows that the importance of secondary school enrolment, economic incentives, access to technology through imports, infrastructure and not least a functioning innovation system are likely to increase technological progress that results in labour productivity growth. Each country must develop an innovation strategy based on its specific reality and situation. The private sector should be involved in designing the innovation strategy. For most African countries, improvements in the educational system, the initiation of interactions between the private sector and research institutions, the provision of risk capital for innovative firms and the improvement of infrastructure for quality controls should feature high on the agenda.