Release Date: 15 November, 2016

Managing innovation in Africa: Creating a growing knowledge-based economy for Africa, in Africa

It is well documented that investing in science and technology-driven innovation is one of the means of driving economic growth in Africa. A knowledge-based economy is the bedrock of creativity and innovation which feeds into wealth creation.

It is well documented that investing in science and technology-driven innovation is one of the means of driving economic growth in Africa.  A knowledge-based economy is the bedrock of creativity and innovation which feeds into wealth creation.

And, while many countries around the world increasingly rely on knowledge for competitive advantage, most African economies are still based largely on natural resources. As the world moves towards knowledge-based growth, it is critical for Africa, as part of the global economy, not to be left behind. 

According to the NEPAD African Innovation Outlook II survey of 2014, African governments are increasing their understanding of the geopolitics of science, technological advances and innovation in the global knowledge economy, and they are beginning to embrace Science, Technology and Innovation (STI) policies and processes for African development.

The survey also notes that African leaders are gaining a deeper understanding of the link between STI and poverty reduction and job creation, on the one hand, and sustainable economic growth on the other.  “Policy must balance competing domestic social and economic needs at the same time as considering the realities of globalisation,” the report says.

Dr Diran Soumonni, a senior lecturer in Innovation Management and Policy at Wits Business School (WBS) agrees. “Innovation should be seen in a holistic light, striking a balance between striving for competitiveness and addressing the other, intangible imperatives peculiar to each context. There is growing recognition among firms and government agencies in Africa that intense investment in knowledge resources is pivotal to economic sustainability while ensuring positive social outcomes.”

Many African economies have enjoyed growth rates above the global average, particularly in the first decade of the 2000s, but this growth was largely fuelled by mineral extraction and agriculture for meeting the demand for raw materials by China and India in particular. More recently, mobile phone technologies (one of the biggest innovations to come out of Africa is mobile money transfer) and other technological innovations have the potential to address pressing social needs, such as healthcare and education.

Fortunately for emerging economies, innovation does not necessarily have to hinge on massive investment in research and development (R&D) at this point, Soumonni notes.  He acknowledges that R&D-driven is the most prestigious of innovation, but insists that building capabilities and engaging in what is sometimes called secondary or imitative innovation is a more fundamental basis for original, science-based innovation. “Being competitive often means being able to leverage knowledge from other more advanced economies,” he says.

South Africa’s own global competitiveness has turned the corner lately, which is largely due to improvements in information and communications technology (ICT) innovation. South Africa rose seven places from 56 to 49 out of 140 countries in 2015, and jumped two places to 47 in 2016, according to the World Economic Forum’s 2016-2017 Global Competitiveness Report.  

Sustained competitiveness requires a culture of life-long learning, notes a World Bank report:  “A knowledge-based  economy  relies  primarily  on  the  use  of  ideas  rather than  physical  abilities  and  on  the  application  of  technology  rather  than the  transformation  of  raw  materials  or  the  exploitation  of  cheap  labour. The global knowledge economy is transforming the demands of the labour market throughout the world. It is also placing new demands on citizens, who need more skills and knowledge to be able to function in their day-to-day lives.”

As a knowledge-based resource, innovation requires a systematic approach through a deeper understanding of the process, which is why many tertiary institutions around the world are beginning to offer further education in innovation studies. 

“It is only by tracking science and technology and understanding the role they have played in global socio-economic development that we can learn to manage the process into the future,” says Soumonni. “The most rapidly growing economies in the world, such as the so-called ‘Asian Tigers’, have shown us that investing in, and leveraging knowledge in well-targeted areas leads to sustained growth and competitiveness and positive social outcomes. South Africa, right now, has all the right ingredients to compete globally in innovation.”

Dr Diran Soumonni is a Senior Lecturer in Innovation Management and Policy at the Wits Business School. He is the Programme Director for the Masters of Management in the field of Innovation Studies at WBS. Diran obtained his PhD in Public Policy from the Georgia Institute of Technology in Atlanta, Georgia, USA, where he focused on both innovation studies and energy policy.

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