B o o s t i n g P r o d u c t i v i t y i n S u b - Sa h a r a n A f r i ca
BOX 1.1 Building upon the World Bank’s Productivity Research Agenda This report is part of the World Bank Group’s programmatic agenda on productivity and part of the regional studies program of the Bank’s Office of the Chief Economist of the Africa Region (AFRCE). It complements other research projects conducted or already published in the region as well as the output from the Productivity Project, an initiative of the Vice Presidency for Equitable Growth, Finance and Institutions. The Productivity Project seeks to bring frontier thinking on the measurement and determinants of productivity, grounded in the developing-country context, to global policy makers. Among its reports are the six described below. The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-Up (Cirera and Maloney 2017) documents the small investments in innovation undertaken by low- and middle-income country firms and governments even though the returns from these investments are potentially high. Underlying this “innovation paradox,” the evidence suggests, is the lack of complementary physical and human capital—in particular, firm managerial capabilities—needed to reap the returns to innovation investments. Countries need to build firms’ capabilities and embrace an expanded concept of the National Innovation System (NIS), incorporating a broader range of market and systemic failures.a Productivity Revisited: Shifting Paradigms in Analysis and Policy (Cusolito and Maloney 2018) presents a “second wave” of thinking in productivity analysis and its implications for productivity policies. It tests these hypotheses across select middle-income countries (for instance, Chile, Colombia, and Malaysia). It provides a more accurate calculation of distortions and examines more rigorously their importance as the primary barrier to productivity growth. It recommends a more comprehensive analysis of firm performance that includes efficiency, quality upgrading, and demand expansion. The authors advocate an integrated approach to productivity analysis that accounts for the need to (a) reduce distortions, (b) create human capital capable of identifying opportunities offered to follower countries, and (c) upgrade firm capabilities. High-Growth Firms: Facts, Fiction, and Policy Options for Emerging Economies (Grover Goswami, Medvedev, and Olafsen 2019) examines whether targeting high-potential firms can enable more economic dynamism. It presents evidence on the occurrence, features, and determinants of high-growth firms
in B razil, Côte d’Ivoire, Ethiopia, Hungary, India, Indonesia, Mexico, South Africa, Thailand, Tunisia, and Turkey. Its findings reveal that high-growth firms are powerful engines of job and output growth. They also create positive spillovers for other businesses along the value chain. H ar ve s t ing Pr os pe r it y: Tec h n ol og y a n d Productivity Growth in Agriculture (Fuglie et al. 2019) uses recent impact evaluations to examine the constraints to farmers’ adoption of technology and dissemination of productivity-enhancing technologies. It also discusses recent developments in agriculture value chains and the emergence of new institutional arrangements to include smallholder farms in these value chains. Industrializing for Jobs in Africa? (Abreha et al., forthcoming) addresses (a) the lack of industrialization in postindependence Sub-Saharan Africa and some countries’ patterns of deindustrialization; (b) the prospects for the region’s countries to undergo industrialization through participation in regional or global manufacturing value chains over the next two decades; and (c) industrial policy tools that might foster country participation in the right regional or global manufacturing value chains. The authors’ analysis is conducted at three levels of aggregation: country level, country groups defined by resource abundance, and income groups and natural trade groupings. Inclusive Digital Africa (Begazo-Gomez, Blimpo, and Dutz (forthcoming) addresses why digital technology (DT) is important for Africa’s development. It focuses on understanding the current drivers of DT adoption by individuals, households, and enterprises, as well as the linkages between DT adoption and business-driven productivity growth, output, and aggregate jobs expansion as a contribution to poverty reduction and inclusion outcomes in Africa today. More specifically, it addresses the extent to which (a) barriers impede DT adoption in Africa; (b) DT adoption by existing and new enterprises (firms and farms, both formal and informal), as well as by people who are or could be working in these enterprises, can generate productivity gains and aggregate output and jobs expansion; and (c) these gains can have greater impact on poverty reduction and inclusion outcomes. a. The NIS refers to the institutions, human capital, and interactions between them that facilitate the creation and diffusion of knowledge. They focus on policies that not only foster research and development (R&D) investments but also upgrade firm capabilities. In addition to addressing barriers to knowledge capital accumulation, an NIS should also consider barriers to the accumulation of all types of capital—barriers such as business climate, bankruptcy laws, poor product and factor regulation, and so on (Maloney 2017).
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