Innovation in Africa: Nature and Evidence

According to the Oslo Manual, innovation can be defined as “the implementation of a new or significantly improved product (good or service), or process, a new marketing method or a new organisational method in business practices, workplace organisations or external relations” (OECD, 2005, p. 46). For today’s middle-income countries in Africa, innovation is essential to sustain growth and promote the transition to high-income status. This paper begins by providing a summary of theoretical elements of the relationship between innovation and growth. It then does an in-depth review of the region’s innovation performance during the last three decades. In doing so it distinguishes between residents and non-residents, and outcomes at different income levels. Based on this analysis, and the broader literature on middle-income traps, policy recommendations to promote innovation are drawn.