Measurement of innovation in the informal sector in Africa: the importance to industrial policy

ABSTRACT

Innovation is key to industrialization in Africa and must be aligned with industrial policy. A challenge for African countries is to design and implement innovation and industrial policies that take into account the unique structural nature of African economies, in which the informal sector is prevalent. This paper argues that a measurement programme focused on innovation in the context of local economic development is imperative for setting industrial and innovation policy in Africa. Policies tend to speak and respond to those phenomena that have been subjected to measurement programmes. Is there space for designing new measures of innovation in Africa that include the informal sector? We propose a novel methodology and framework for measuring informal sector innovation, based on a local innovation and production systems approach. We end the paper with a proposal for using the evidence gathered from this methodology and a continental strategy that lends itself to direct policy intervention that has local economic development and upgrading of value chains as a goal.

KEYWORDS:

• Innovation and development
• measurement of innovation
• developing economy
• innovation policy
• industrial policy
• informal sector

Acknowledgements

The authors gratefully acknowledge the financial support of the Department of Science and Innovation, Republic of South Africa.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 They use the term ‘informal economy’, but, from the context, it is clear that they mean ‘informal sector’ in our terminology.