Authors Moses Owidhi
This blog is based on highlights and discussions held during the ‘Intellectual Property, Innovation and Entrepreneurship as drivers for Economic Development in Africa’ webinar – AfricaLics Webinar Series 06, held on 7th July 2022. The keynote speaker of the webinar was Dr. Mclean Sibanda who is an innovation and entrepreneurship expert, with a wealth of experience on innovation ecosystems.
Key messages
- Intellectual property, innovation and entrepreneurship are critical components of economic development.
- Lack of investment in R&D and a low emphasis on opportunity entrepreneurship has resulted in low levels of innovation in many African countries.
- Most African countries have informal economies dominated by small and medium enterprises that do not make much use of technology or produce innovations.
- To harness the gains made in intellectual property and innovation, African countries need to develop their own roadmaps for effective use of these systems to change the structure of their economies.
- With the right investments in intellectual property, innovation, and entrepreneurship, Africa can unleash its potential for economic growth and development.
- Low levels of spending on R&D as a percentage of GDP is a major challenge facing Africa.
- The lack of data on R&D investment in certain parts of Africa is hindering efforts to make informed decisions on R&D investments.
- The power of innovation to foster economic development and business competitiveness is not being fully realized in Africa.
- Investing in research infrastructure and human capital development is essential for unlocking the potential of R&D investment in Africa.
- African countries can learn from the experiences of other countries that have successfully leveraged R&D investment to drive economic development, such as the Asian Tigers.
Introduction
Intellectual property, innovation and entrepreneurship are critical components of economic development – Africa has a lot to gain from investing in these areas. Intellectual property refers to creations of the mind such as inventions, literary & artistic works, designs and symbols used in commerce. Innovation, on the other hand, refers to the process of creating new products, services, or processes that add value to society. Entrepreneurship involves identifying opportunities and creating businesses to meet market needs. The relationship between these concepts is symbiotic, with each supporting the other. Intellectual property protects the rights of innovators and entrepreneurs, giving them an incentive to invest in R&D and bring their creations to market. Innovation, in turn, drives economic growth, creating new markets and opportunities for entrepreneurs. Entrepreneurship provides the impetus for innovation by identifying market needs and bringing new products and services to meet those needs.
However, in many African countries, there is a lack of investment in R&D and a low emphasis on opportunity entrepreneurship. As a result, there are low levels of innovation, as evidenced by low patent outputs. Most African countries have informal economies dominated by small and medium enterprises that do not make much use of technology or produce innovations. Most of these SMEs are necessity entrepreneurs given the low levels of industrialization and the low scalability of their businesses. To address this, African countries need to shift their thinking towards innovation and opportunity entrepreneurship. They can learn from the examples of South Korea, China, India among others, which have effectively used intellectual property and innovation systems as drivers of economic development. This has been possible through deliberate and long-term economic planning, investment in aligning the education system with economic planning, R&D investment, effective use of the intellectual property system and strategic technology transfer.
R&D investment – Africa in context
R&D investment is widely recognized as a critical component for economic development and growth. In fact, it is often referred to as the key driver of innovation, which is essential for fostering economic development and business competitiveness. Unfortunately, most African countries have not been able to fully harness the power of R&D investment due to various challenges. One of the biggest challenges facing Africa when it comes to R&D investment is the low level of spending on research and development as a percentage of Gross Domestic Product (GDP). According to United Nations Educational, Scientific and Cultural Organization (UNESCO), most African countries spend less than 0.5% of their GDP on R&D, with many countries spending even less than 0.1%. This is a far cry from the global average of 1.7% , it pales in comparison to the R&D spending of many developed countries. Another challenge facing Africa is the paucity of data on R&D investment in certain parts of the continent. This lack of data makes it difficult for policymakers and investors to make informed decisions on R&D investments, which further exacerbates the problem. Furthermore, the technical assistance that African countries receive is often unstructured and not targeted at addressing specific challenges. As a result, the impact of these interventions is often limited, and often do not lead to sustained improvements in R&D investment and innovation.
The consequence of these challenges is that the power of innovation to foster economic development and business competitiveness is not being fully realized in Africa. The African continent contributes less than 1% of global R&D investment, despite having a population of over one billion people. To address these challenges, African countries need to prioritize R&D investment as a critical component of their economic development strategies. This includes creating an enabling environment for private sector investment in R&D, developing targeted interventions that address specific challenges and investing in research infrastructure & human capital development. African countries can learn from the experiences of other countries that have successfully leveraged R&D investment to drive economic development, such as the Asian Tigers. These countries invested heavily in R&D, aligned their education systems with their economic development strategies and effectively utilized intellectual property and innovation systems to drive economic growth and competitiveness.
Patent Filings – African in context
Patent filings have been a key indicator of innovation and technological progress around the world. However, in the African context, patent filings have been low and declining in recent years. Africa’s contribution to PCT (Patent Cooperation Treaty) applications has been on a downward trend, with the continent contributing less than 1% of global patent applications.
The decline in patent filings in Africa can be attributed to a number of factors, including the high cost of filing, and maintaining patents, limited access to financing for research and development (R&D), and inadequate infrastructure and institutional support for innovation. These challenges have made it difficult for African innovators and entrepreneurs to protect their intellectual property and bring new products and services to market.
Furthermore, the low number of patent filings in Africa is also a reflection of the limited R&D investment on the continent. African countries spend less than 0.5% of their GDP on R&D, compared to the global average of around 2.2%. This low level of investment has resulted in a lack of capacity for innovation, as well as limited access to the knowledge and technology needed to support innovation and entrepreneurship.
There is a need for African countries to address these challenges and create an enabling environment for innovation and R&D. This includes investing in research infrastructure and developing human capital to support innovation and entrepreneurship. It also requires improving access to financing and developing institutional frameworks to support intellectual property protection and enforcement. Countries that have successfully leveraged R&D investment to drive economic development, such as South Korea, China, and India, provide important lessons for African countries. These countries have demonstrated the importance of deliberate and long-term economic planning, investment in R&D, and effective use of the intellectual property system to foster innovation and competitiveness.
Lessons from South Korea
One key lesson from South Korea is the importance of linking economic and education planning and the role of government intervention in promoting overall social and economic development. The country’s government played a significant role in shaping the education system and investing in R&D, creating an enabling environment for innovation and entrepreneurship to flourish.
Another lesson is the importance of building a high-quality education system, starting from a sound foundation of high-quality schooling. This laid the groundwork for the development of a high-quality higher education system, which played a critical role in supporting economic development. In addition, South Korea recognized the role of higher education in economic development, particularly in the production of human capital for growth and development. The country invested in research and innovation and focused on technology capture, transfer, and development. This allowed the country to create a pool of highly skilled workers who were able to support its economic development goals.
Another important lesson from South Korea is the need to ensure that higher education meets the labor market needs of a knowledge based economy. There was a large divergence between the skills base of university graduates and the needs of employers, which was addressed through closer collaboration between universities and the private sector. Finally, South Korea also acquired licenses for intellectual property (IP) and technologies to supplement local innovations. This helped to support its economic development goals by providing access to cutting-edge technologies and expertise.
The case of South Africa
South Africa provides an interesting case study of the evolution of intellectual property and innovation ecosystems since 1994. There have been shifts in the country’s intellectual property outputs, with an emphasis on the role of publicly financed R&D in driving IP outputs. There are emerging pockets of excellence based on these outputs, with some trends in commercialization of IP emanating from publicly financed R&D.
Conclusion
African countries need to develop their own roadmaps for effective use of the intellectual property and innovation systems to change the structure of their economies. This requires a deliberate medium to long term approach that considers their own circumstances and context. With the right investments in intellectual property, innovation, and entrepreneurship, Africa can unleash its potential for economic growth and development.
R&D investment is critical for Africa’s economic development and competitiveness. Despite the challenges, African countries can unlock the potential of R&D investment by prioritizing it as a critical component of their economic development strategies, investing in research infrastructure and human capital development, and learning from the experiences of other successful countries.
The decline in patent filings in Africa highlights the need for greater investment in R&D and innovation. African countries must create an enabling environment that supports innovation and entrepreneurship, including improving access to financing, developing institutional frameworks for intellectual property protection and investing in research infrastructure and human capital development. By doing so, African countries can unlock the potential of their innovators and entrepreneurs, drive economic development, and achieve sustainable growth.
The experience of South Korea provides important lessons for African countries looking to promote economic development through education and R&D. These include the importance of linking economic and education planning, investing in a high-quality education system, recognizing the role of higher education in economic development, ensuring that education meets the needs of the labor market, and supplementing local innovations with licensed IP and technologies. By following these lessons, African countries can create an enabling environment for innovation and entrepreneurship, promote economic development, and achieve sustainable growth.
About the speaker
Dr. Mclean Sibanda is an accomplished C-suite executive, patent attorney, engineer and internationally respected innovation and intellectual property promoter with a 25-year career in engineering, infrastructure, intellectual property, innovation, entrepreneurship, and related fields. He is an avid believer that entrepreneurship is about building the future, and his humble beginnings provided a sound foundation for his passion for entrepreneurship.