Boosting business competitiveness in Africa with IP and innovation

• Author: McLean Sibanda - Tom Peter Migun Ogada
• Position: Managing Director, Bigen Global Limited, Harare, Zimbabwe - Executive Director, African Centre for Technology Studies and Chairman of the Kenyan National Commission for Science, Technology and Innovation, Nairobi, Kenya

Estimates suggest that by 2050 Africa’s population will double, rising from 1.2 billion today to 2.4 billion, with over 60 percent of people under the age of 25. Such a large young population presents significant opportunities and challenges. On the one hand, with a higher proportion of economically active people, African countries could benefit from accelerated economic growth. On the other hand, low levels of industrialization in most African countries, and associated high youth unemployment, are of growing concern.

How can policymakers in Africa ensure inclusion of Africa’s youth in the global economy? What initiatives are needed to develop the requisite skills and expertise for Africa’s youth to participate in innovation and tomorrow’s knowledge-based economy? What should African governments do to accelerate the transition from natural resource-intensive to knowledge-based economies? And how can policymakers promote innovation through better understanding and greater use of intellectual property (IP) rights to boost the competitiveness of African businesses and put the continent’s economy on a sustainable footing?

Economic diversification is a priority for African countries, especially in sectors with the potential to create employment and produce high-value outputs.

Opportunities and challenges

Over the past two decades, countries in Africa have achieved rapid and sustained economic growth rates. Projections by the International Monetary Fund (IMF) and African Economic Outlook 2019 suggest that this trend will continue. Uganda, Benin, Kenya, Tanzania, Senegal, Ivory Coast, Ghana, Rwanda, Ethiopia and Libya are set to enjoy growth rates ranging from 6 percent to 11 percent. High demand for African exports and relatively easy access to finance as well as microeconomic reforms as well as improvements in the business environment are important drivers of this growth. The concern, however, is that the number of jobs available to the expanding working-age population – projected to be almost 1 billion by 2030 – has not kept pace with this economic growth. Data for 2017 show that unemployment rates (7.5 percent) in African countries are well above the global average (4.3 percent). Only 40 percent of the workforce is engaged in productive employment, of which 70 percent are in vulnerable employment.

Most employment opportunities (65 percent) arise within the agricultural sector, which represents over 15 percent of the continent’s GDP, followed by services, particularly financial services and telecommunications. Close to 80 percent of jobs are found in the informal sector. However, manufacturing – the sector with the greatest scope to add value to raw materials – accounts for just 6.5 percent of jobs. This is not surprising given the low levels of industrialization in African countries compared to the rest of the world.

Unemployment is a big issue in Africa, especially given the size of its young...