Libmonster ID: KE-1293
Author(s) of the publication: B. B. RUNOV

scientific and technical potential Keywords: innovationinvestment. Sub-Saharan Africa

The last decades of the 20th century and the beginning of the current century were marked by profound changes in the global economy system, which are based on fundamental shifts in the development of science and its technological applications, the onset of the information age, and the introduction of a fundamentally new innovative type of economic development and management. Sub-Saharan Africa has also begun to pay great attention to the reorganization of economic activities, taking into account modern advances in science and technology. The most important condition for the region's countries to adapt to global changes is to create a basis for developing domestic scientific and technical potential, training qualified personnel, commercializing and introducing local R & D results into production, as well as using innovation impulses and foreign investment coming from economically developed countries.

B. B. RUNOV

Candidate of Economic Sciences

Obstacles to the implementation of these areas of scientific, technical and economic development are the extreme underdevelopment of the production sector of the economy, insufficient effective demand for innovations from local firms and, as a result, the limited absorption capacity of the economy in relation to new knowledge and technologies. There is an urgent need for organizations (venture firms, funds) that can commercialize scientific and technical knowledge and information, introduce innovations, and take the risk of bringing knowledge to the development process.-

page 23

competitive product selection.

"CLUSTERING THE ECONOMY"

The most common type of such organizations is the Centers for Innovation and Enterprise Development (CIED) established by UNCTAD. In particular, they are designed to provide communication between production and universities, R & D institutes, advisory and venture capital firms. In Sub-Saharan Africa, such centres are currently active in Côte d'Ivoire, Ghana, Tanzania and Zimbabwe.1 The creation of such centers to some extent reflects current trends towards structural shifts in the direction of the so-called "clustering of the economy".

A cluster is usually understood as "a local concentration of horizontally and vertically connected independent firms and auxiliary organizations specializing in similar business areas"2. The purpose of forming such structures is to create conditions for the development of such high-tech industries as biotechnology, microelectronics, telecommunications, as well as for the introduction of innovations in various economic spheres, including traditional ones.

By organizing small businesses into clusters, they are able to solve such problems as financing, creating the necessary contingent of qualified cadres-

Table

Key features of some African production clusters

A country

Cluster

Number of merged firms

Size of firms (average number of employees)

Sales markets

Main issues

Ghana

Industrial cluster (mainly agricultural products) of Suame

9000

5 - 10

Domestic market and limited exports to Western countries. Africa

Insufficient use of scientific and technical developments

Kenya

Kamukunji Metalworking Cluster

2000

1 - 3

Inner market

Excessive number of microfirms, weak links with research centers, poor infrastructure

 

Flower growing Cluster

24 (large firms)

250 - 600

Domestic market and export to EU countries

Depletion of natural resources and environmental pollution

 

Nnewi Auto Parts Manufacturing Cluster

85

12

Domestic market and limited exports

Competition from Asian firms, insufficient government assistance

Nigeria

Cluster for building Otigba computers

5000

8

Domestic market and export to Western countries. Africa

Lack of capital (especially long-term), undeveloped infrastructure, inflated import duties

 

Mwenge Craft Production Cluster

2200

15 - 20

Domestic market and limited exports

Insufficient funding, lack of equipment, weak infrastructure support

 

Keko Furniture Cluster

-

2 - 130

Domestic market and limited exports

Weak infrastructure and technical support, lack of funding

Uganda

Fishing and fish processing cluster (oz. Victoria)

17 fish processing enterprises

20 - 35

Domestic market and limited exports (mainly to EU countries)

Reduced fish stocks, improved quality standards in EU countries

Mauritius

Textile cluster and clothing production

260

170

Domestic and international market

Rising labor costs, increased international competition, low productivity

 

Wine cluster

340

-

Domestic and international market

Weak marketing strategy, financial difficulties of small firms

SOUTH AFRICA

Textile Cluster and Clothing Manufacturing (West Cape Town)

327

103

Domestic and international market

Rising labor costs, increased international competition, insufficient use of innovation in the production process



Note: "- "no data available.

Source: World Bank. Knowledge, Technology and Cluster-Based Growth in Africa. WBI. Wash., 2008, p. 3.

page 24

moat, formation of sales markets, etc. In modern conditions, highly specialized small enterprises can stay afloat only by taking advantage of the so-called production concentration centers, which allow them to solve many tasks that are too difficult for individual enterprises. In turn, the increasingly complex structure of international production and trade forces them to focus on joint implementation in the global economy. Increased competition encourages higher labor productivity and product quality. The relationship between enterprises and local universities, cooperation between local and central authorities create conditions not only for the development of a particular cluster, but also for the growth of the national economy as a whole.

In developed countries, clusters have become the most important element of economic structures3. According to M. Porter, one of the founders of the theory of" clustering", among the main characteristics of this phenomenon is the geographical (territorial) community and similar production orientation of its constituent enterprises and organizations, which, in turn, is determined by the availability of appropriate infrastructure, natural resources, and service services, qualified personnel 4.

The concept of a cluster is also not entirely new in Africa. For example, a cluster for the production of textiles and clothing emerged-at the initiative and with the support of the Government-in the territory of the export-production zone of Mauritius back in the 1970s. Subsequently, it developed into one of the largest centers of the textile industry in Sub-Saharan Africa.

In the mid-1990s, a flower growing cluster was established in Kenya, also largely due to State support. Annual exports of these products-mainly to the United Kingdom and the Netherlands - have now exceeded 80 tons (up from 30 tons in 1995) and reached 23 billion Kenyan shillings ($300 million). Flower exports now account for about 1.5% of Kenya's GDP and over 8% of its total export revenues.5 However, the merger of companies with similar production orientation (mainly small, mostly family-owned) mostly occurs spontaneously, outside of government programs for implementing innovative projects.

At the initiative of the World Bank Institute (WBI), in the late XX - early XXI centuries, a number of countries in the region conducted research aimed at studying the possibilities of clustering, as well as the experience of existing clusters. The experts concluded that the creation of industrial clusters in African countries is becoming one of the most important areas of their economic development.

Local and foreign experts examined 11 clusters in 7 states of the Sub-Saharan region. Their main characteristics are summarized in the table.

The initial condition for creating a cluster is the availability of natural resources and their concentration in a specific location. This is especially important in cases of flower farming, fishing, wine production (clusters in Kenya, Uganda, South Africa, etc.), as well as the development of other resource-intensive industries.

Proximity to fairly large markets and the level of transport infrastructure (availability of roads, ports, airports, etc.) are of great importance.For example, the computer assembly cluster in Nigeria is located in the area of Lagos, the largest industrial center, port and former capital of the country. Local firms have access to relatively cheap imports of assembly units and technologies from China, Malaysia and other Asian countries.

An important condition for creating a cluster is also the availability of employees with initial production skills and entrepreneurial experience. Among the founders of clusters are merchants, artisans, and farmers who have gone from performing the simplest business operations to creating complex schemes for the production and sale of goods.

Despite the spontaneity of the emergence of most African clusters, in some cases the impetus for their creation came from the authorities who assisted in their formation. In addition to the textile cluster in Mauritius, the Mwenge cluster in Tanzania and the Suame cluster in Ghana were established at the initiative of the respective Governments.

However, when assessing the level of" clustering " in Sub-Saharan Africa, it should be noted that this process in the region is still only in the initial stage. As a rule, local clusters are conglomerates of small firms, mostly deprived of state support and, most importantly, developed links with sources of new knowledge and technologies - local universities, R & D centers, etc. As a result, the scale of commercialization of the results of scientific and technical research and the introduction of innovations in production remains negligible. Among the few exceptions is the Ghanaian Suame Cluster, which receives technical and advisory support from the University of Nam. Kwame Nkrumah; the Kenyan flower cluster, which uses the services of the National Horticultural Research Center; and the Ugandan fishing and fish processing cluster, which cooperates with a local university in the field of water resources research and training.

TECHNOLOGY PARKS AND INCUBATORS

Along with clusters, such forms of introduction and use of scientific and technological innovations as technology parks and incubators have also developed in Sub-Saharan Africa. However, in terms of their number, the region is still noticeably lagging behind other developing countries. Technoparks (this concept also includes some other entities such as science and technology parks, technopolises, research parks, technology zones, incubators, etc.) are aimed at bringing together scientists, inventors, technologists, designers, and manufacturers with

page 25

the goal of solving the problem of developing an innovation system.

Technopark is a new type of research firm that uses venture capital to implement scientific achievements and implement them in industrial practice, creating conditions for the formation of a new generation of African scientists and engineers, strengthening ties between firms and universities, and developing high technologies. On the one hand, technoparks play the role of "incubators" of personnel and innovative products, on the other hand, they become locomotives of economic growth, increasing the number of jobs, the level of income from export and taxation of new enterprises, and stimulating their competitiveness.

The creation of technology parks requires active assistance from both the national government and international organizations, which can be implemented, in particular, by financing the necessary infrastructure and providing legal services. Technoparks are characterized by a mixed (public-private) form of financing and investment. The Department of Higher Education, Science and Technology, established in 2006 within the framework of the African Development Bank, is partly responsible for this task. The "African Consolidated Plan of Action for Science and Technology", prepared in 2006, emphasizes the need to develop a regional scheme for allocating financial flows in this area.6

According to UNIDO, Sub-Saharan Africa already has technology parks in the field of precision engineering and new materials (4 parks in South Africa); in the field of agronomy and food production (South Africa, Senegal), biotechnology (South Africa, Zimbabwe), chemistry (Zimbabwe), electronics (South Africa, Zimbabwe), energy (South Africa, Senegal), health and pharmacology (South Africa, Senegal), information and telecommunications technology (South Africa, Senegal, Zimbabwe, Rwanda), and services (South Africa). Several technology parks, primarily in South Africa, operate in a number of scientific and technological areas.7

At the international level, a non - governmental organization, the International Association of Science Parks, which cooperates with the United Nations Economic and Social Council (ECOSOC), provides advisory and financial support to African technology parks. In 2008, the Association, which by that time brought together technoparks from 72 countries, was joined by the Innovation Center for High Technologies in Precision Engineering (South Africa), which, thus, became the first internationally recognized African science park8.

Another international organization created with the support of the World Bank is the African Incubator Network (AIN). This non-governmental association has more than 300 member firms from sub-Saharan Africa. The aim of the organization is to support incubators and small innovative enterprises by sharing knowledge and experience, holding seminars, consulting specialists and other activities aimed at helping local businesses develop, mainly in the field of ICT. The AIN Coordination Center is located in Johannesburg. In 2007, the network covered 10 countries: Angola, Ghana, Kenya, Mauritius, Mozambique, Nigeria, Rwanda, Senegal, South Africa, and Uganda. The association plans to develop a unified network of business incubators and other enterprises that provide various innovative services.9

In some countries of Sub-Saharan Africa, the creation of technology parks and incubators is becoming one of the main points of the economic recovery program. So, the Government of Nigeria has approved a project to organize science parks in 6 regions of the country. The total budget allocation for this purpose for the period up to 2020 will amount to 30 billion naira*, and 0.5 billion naira has already been allocated to encourage the start of this work. According to the Nigerian Minister of Science and Technology, G. Ekiuri, "the science parks program will focus on filling in the economic gaps and addressing national challenges in the area of science, technology and innovation infrastructure." 10

The Government of Mozambique intends to create 4 science parks in the areas of social services, health and infrastructure. They will also conduct research on agricultural technologies, energy, telecommunications, biotechnologies and building materials. The first park, which, thanks to financial assistance provided by India, has already been allocated $25 million (for the construction of laboratories, the purchase of computer equipment, the creation of an energy and water supply network), is planned to be organized near Maputo. It will focus on research in the field of ICT. It is also planned to establish a scientific center for combating malaria 11.

The introduction of new forms of economic activity into the practice of a number of Sub-Saharan African countries indicates their intention (however, it is unlikely to be feasible in the next few decades) to start moving away from the outdated model of "catch-up development" towards a new, innovative model of national economic development.


* 1 paire - $0.0066.

1 UNCTAD. The Least Developed Countries. Report 2007. Knowledge, Technological Learning and Innovation for Development. N.Y. - Geneva, 2007, p. 77.

2 OECD. Business Clusters. P., 2005, p. 9.

3 Ibid., p. 7.

4 World Bank. Knowledge, Technology and Cluster-Based Growth in Africa. Wash., 2008, p. 1.

5 Ibid., p. 37.

6 Africa's Science and Technology Consolidated Plan of Action. NEPAD Office of Science and Technology, Pretoria, 2006, p. 8.

7 Poverty Reduction through Productive Activities - www.unido.org.index.php

8 www/iaspsa.2008

9 Information for Development Programs. October 2007 - www.infodev.org

10 Vanguard. Lagos, 01.22.2008.

11 Science and Development Network. December 10, 2008.


© library.ke

Permanent link to this publication:

https://library.ke/m/articles/view/SUB-SAHARAN-AFRICA-NEW-FORMS-OF-BUSINESS-ORGANIZATION

Similar publications: LRepublic of Kenya LWorld Y G


Publisher:

Kioko KabuuContacts and other materials (articles, photo, files etc)

Author's official page at Libmonster: https://library.ke/Kabuu

Find other author's materials at: Libmonster (all the World)GoogleYandex

Permanent link for scientific papers (for citations):

B. B. RUNOV, SUB-SAHARAN AFRICA: NEW FORMS OF BUSINESS ORGANIZATION // Nairobi: Kenya (LIBRARY.KE). Updated: 19.06.2024. URL: https://library.ke/m/articles/view/SUB-SAHARAN-AFRICA-NEW-FORMS-OF-BUSINESS-ORGANIZATION (date of access: 09.02.2026).

Found source (search robot):


Publication author(s) - B. B. RUNOV:

B. B. RUNOV → other publications, search: Libmonster KenyaLibmonster WorldGoogleYandex

Comments:



Reviews of professional authors
Order by: 
Per page: 
 
  • There are no comments yet
Related topics
Publisher
Kioko Kabuu
Nairobi, Kenya
56 views rating
19.06.2024 (599 days ago)
0 subscribers
Rating
0 votes
Related Articles
consigliere
Catalog: Право 
8 hours ago · From Kenya Online
Who would win if Russia fought NATO?
9 hours ago · From Kenya Online
Biography of Jeffrey Epstein
Yesterday · From Kenya Online
AI forecast. Which countries will win more medals at the 2026 Olympic Games?
2 days ago · From Kenya Online
Opening of the 2026 Olympics in Italy
2 days ago · From Kenya Online
The 2026 Olympic Opening in Italy: A Nexus of Heritage and Innovation in the Global Sporting Arena
2 days ago · From Kenya Online
Performances at the Winter Olympic Games
3 days ago · From Kenya Online
Olympic gold or participation
3 days ago · From Kenya Online
Participation of African athletes in the Winter Olympics.
3 days ago · From Kenya Online
Health and winter sports
Catalog: Медицина 
4 days ago · From Kenya Online

New publications:

Popular with readers:

News from other countries:

LIBRARY.KE - Kenyan Digital Library

Create your author's collection of articles, books, author's works, biographies, photographic documents, files. Save forever your author's legacy in digital form. Click here to register as an author.
Library Partners

SUB-SAHARAN AFRICA: NEW FORMS OF BUSINESS ORGANIZATION
 

Editorial Contacts
Chat for Authors: KE LIVE: We are in social networks:

About · News · For Advertisers

Kenyan Digital Library ® All rights reserved.
2023-2026, LIBRARY.KE is a part of Libmonster, international library network (open map)
Preserving the Kenyan heritage


LIBMONSTER NETWORK ONE WORLD - ONE LIBRARY

US-Great Britain Sweden Serbia
Russia Belarus Ukraine Kazakhstan Moldova Tajikistan Estonia Russia-2 Belarus-2

Create and store your author's collection at Libmonster: articles, books, studies. Libmonster will spread your heritage all over the world (through a network of affiliates, partner libraries, search engines, social networks). You will be able to share a link to your profile with colleagues, students, readers and other interested parties, in order to acquaint them with your copyright heritage. Once you register, you have more than 100 tools at your disposal to build your own author collection. It's free: it was, it is, and it always will be.

Download app for Android