A Diagnostic of Business Environment, Industrial Policies, and Innovation in Africa

  • Belmondo Voufo Tanankem
  • Uchenna Rapuluchukwu Efobi
  • Vivian Nnetu
  • Uchechi Anaduaka
Living reference work entry
Part of the Sustainable Development book series (SD)

Abstract

Business environment and industrial policies are some externalities that explain the extent to which firms are competitive. However, competitiveness entails advanced skills, innovation, and technological progress, to mention a few. Following the awakening of African government to the importance of improving business environment and providing incentives to ensure the attraction and sustenance of foreign investors within their countries, there is the need to provide a diagnostics of this effort. In this paper, we do not review independent policies and public administration procedures that are prevalent within African countries, as this keeps evolving. However, in this study we provide a broad diagnostic of the prevailing issues and then proffer implications for policy attention for country and regional policy makers. We explore the extent to which business environment and industrial policies foster innovation in Africa. Using both conceptual descriptions, macro trends and firm-level analysis, we highlight the need for the adoption of industrial policies that considers sustainable development in Africa. For instance, innovation thrives in favorable business environment. Actions such as the reduction or outright tax exemptions for firms to engage in the development of infrastructural facility that can spur innovation should be encouraged. Also, subsidies can be applied by the government to reduce the burden on firms to finance subscriptions for ICT infrastructures. This study also highlights the need for the implementation of policies that ensure maximum protection of the environment, ecosystem, and other natural resources that sustains life should be encouraged.

Keywords

Africa Business environment Firm analysis Industrial policies Innovation 

JEL Classification

L25 L41 031 

References

  1. Acemoglu D, Johnson S, Robinson J (2004) Institutions as the fundamental cause of long-run growth. National Bureau of Economic Research, Working paper series 10481. http://www.nber.org/papers/w10481
  2. Aldaba RM (2014) The Philippine manufacturing industry roadmap: agenda for new industrial policy, high productivity jobs, and inclusive growth. Philippine Institute for Development Studies Discussion Paper, No. 2014-32. Retrieved from http://dirp3.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidsdps1432.pdf
  3. Altenburg T (2011) Can industrial policy work under neopatrimonial rule? Working Papers, Aug 2011, p 41Google Scholar
  4. Asongu SA, Nwachukwu JC (2016) The role of lifelong learning on political stability and non-violence: evidence from Africa. J Econ Stud 2016(43):1–141Google Scholar
  5. Brundtland Commission (1987) Report of the world commission on environment and development. United Nations, Washington, DCGoogle Scholar
  6. Collier P, Venables AJ (2007) Rethinking trade preferences: How Africa can diversify its exports. The World Economy 30(8):1326–1345Google Scholar
  7. Commander S, Svejnar J (2011) Business environment, exports, ownership, and firm performance, Review of Econ Stud 93(1):309–337Google Scholar
  8. Efobi UR (2015) Politicians’ attributes and institutional quality in Africa: a focus on corruption. J Econ Issues 49(3):787–813CrossRefGoogle Scholar
  9. Efobi UR, Tanankem B, Beecroft I (2016) Incentives and firms’ productivity: exploring multidimensional fiscal incentives in a developing country. OCP Policy Center Research Paper RP-16/03Google Scholar
  10. Ernst & Young (2013) Africa 2013 – getting down to business. s.l.: Ernst & Young, United KingdomGoogle Scholar
  11. Fosu A, Mlambo K, Oshikoya T (2001) Business environment and investment in Africa. J Afr Econ 10(2):1–142Google Scholar
  12. Ikeme J (2000) Sustainable development, globalisation, and Africa: plugging the holes, African economic analysis. Retrieved from http://www.afbis.com/analysis/Jekwu.html
  13. MakingItMagazine (2010) Industrial policy in Africa: what needs to be done. Industry for Development, 1 Dec 2010Google Scholar
  14. McArthur J, Teal F (2002) Corruption and firm performance in Africa. Centre for the study of African economies Working paper series, CSAE WPS/2002-10Google Scholar
  15. Naude W (2011) Entrepreneurship is not a binding constraint on growth and development in the poorest countries. World Dev 39(1):33–44CrossRefGoogle Scholar
  16. Oluwatobi S, Efobi UR, Olunrinola I, Alege P (2014) Innovation in Africa: why institutions matter. S Afr J Econ 83(3):390–410CrossRefGoogle Scholar
  17. Organization for Economic Co-operation and Development (2007) Innovation and growth rationale for an innovation strategy. Retrieved from http://www.oecd.org/science/inno/39374789.pdf
  18. Osabuohien E, Efobi UR, Gitau C (2014) Beyond the environmental kuznets curve in Africa: evidence from panel cointegration. J Environ Policy Plan 16(4):517–538CrossRefGoogle Scholar
  19. Osabuohien E, Efobi UR, Gitau C (2015) Environment challenges in Africa: further dimensions to the trade, MNCs, and energy debate. Manag Environ Qual Int J 26(1):118–137CrossRefGoogle Scholar
  20. Overseas Development Institute (2016) African countries spending to meet the Paris climate promises. Retrieved from https://www.odi.org/comment/10391-african-countries-spending-meet-paris-climate-promise
  21. Sandbrook R (1986) The state and economic stagnation in tropical Africa. World Dev 14(3):319–322CrossRefGoogle Scholar
  22. Schumpeter JA (1942) Capitalism, socialism, and democracy. Harper & Brothers, New York/LondonGoogle Scholar
  23. Seligmann PA, Andelman SJ (2012) Sustainability in Africa. Retrieved from http://www.esri.com/news/arcnews/fall12articles/sustainability-in-africa.html
  24. Soludo C, Ogbu O, Chang HJ (2004) The politics of trade and industrial policy in Africa: forced consensus? Africa World Press, TrentonGoogle Scholar
  25. Stiglitz J, Lin J, Monga C, Patel E (2013) Industrial policy in the African context. Policy research working papers, Sept 2013, pp 1–32Google Scholar
  26. The Economist (2013) Demography, growth, and inequality: age invaders. Retrieved from http://www.economist.com/news/briefing/21601248-generation-old-people-about-change-global-economy-they-will-not-all-do-so
  27. Topalova P, Khandelwal A (2010) Trade liberalization and firm productivity: the case of India. Rev Econ Stat. Retrieved from https://www0.gsb.columbia.edu/faculty/akhandelwal/papers/productivity_21.pdf
  28. Tyson L (1992) Who’s bashing whom? Trade conflict in high-technology industries. Institute for International Economics, Washington, DCGoogle Scholar
  29. United Nations International Strategy for Disaster Reduction (2011) Effective measures to build resilience in Africa to adapt to climate change, UN-ISDR Briefing Note 04. Retrieved from http://www.unisdr.org/files/24012_briefingnote04africa.pdf
  30. Weber M (1978) Economy and society. An outline of interpretative sociology, 2nd edn. Bedminster Press, New YorkGoogle Scholar
  31. World Bank (2016) World Development Indicators, Washington: World BankGoogle Scholar
  32. Xu LC (2011) The effects of business environments on development: Surveying new firm-level evidence. The World Bank Research Observer 26(2):310–340CrossRefGoogle Scholar
  33. Yulek MA (2014) Revisiting national economic planning and industrial policy: concepts, experiences and the ecosystem. In: Yulek M (ed) Economic planning and industrial policy in the globalizing economy, vol 13. Springer International Publishing, Berlin, pp 3–27Google Scholar
  34. Yulek MA (2016) Industrial policies and outcomes: a comparison of pre-liberalized Korean and Turkish economies. J Comp Asian Dev 15(1):1–22Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2017

Authors and Affiliations

  • Belmondo Voufo Tanankem
    • 1
  • Uchenna Rapuluchukwu Efobi
    • 2
  • Vivian Nnetu
    • 3
  • Uchechi Anaduaka
    • 3
  1. 1.Department of Analysis and Economic PoliciesMinistry of Economy, Planning and Regional DevelopmentYaoundéCameroon
  2. 2.School of BusinessCovenant UniversityOtaNigeria
  3. 3.Department of EconomicsUniversity of Nigeria NsukkaNsukkaNigeria

Personalised recommendations