Scott D. Taylor
Scholars and practitioners once commonly linked “African culture” to a distinctive “African capitalism” that was at odds with genuine capitalism and the demands of modern business. Yet contemporary Africa has undergone a transformation in thinking about business, accumulation, and capitalism itself. Business cultures have evolved as a result of numerous factors, both exogenous and endogenous, including education, religion, migration, and technology. Consequently, a capitalist ethos has taken hold within both state and society. The success and visibility of an emergent class of African big business reveals that business and profit are culturally acceptable, as most celebrate and others seek to emulate these large firms. Existing theories of African capitalism are ill-equipped to explain these changes, in part because they are too rooted in anachronistic interpretations of African business culture, and culture in general. African business cultures increasingly are as diverse as any across the globe, and at their core is a growing capacity for reproduction, as capitalists.
Keun Lee, Calestous Juma, and John Mathews
This chapter examines how innovation capabilities can help Africa achieve sustainable development. In particular, it explores how learning mechanisms and channels of access to foreign knowledge can augment domestic capabilities as part of innovation. The discussion begins by considering the potential of innovation to enable sustainability in its economic, social, and environmental dimensions. The chapter then focuses on Africa’s latecomer advantages and the feasibility and necessity of adopting an alternative growth paradigm. It also compares three different types of failures—market failure, system failure, and capability failure—and argues that the capability failure is more unique to Africa and developing countries and presents a barrier to innovation. The chapter concludes by describing specific policy strategies for building up the innovation capabilities of African countries.
Laura Alfaro and Maggie Xiaoyang Chen
This chapter examines the patterns and determinants underlying the global economic geography of multinational corporations (MNCs), focusing in particular on location fundamentals and agglomeration economies. The discussion builds on three broad strands of literature: the first, in the area of international trade, explores the role of location fundamentals in MNCs’ decisions to invest abroad; the second, in the field of regional and urban economics, studies the importance of Marshallian agglomeration forces in domestic economic geography; and the third assesses the advantage of proximity between customers and suppliers. A spatially continuous index of pairwise-industry agglomeration is developed using a unique worldwide establishment data set, WorldBase, that shows detailed location, ownership, and operation information for plants in more than 100 countries. The results suggest that location fundamentals, including market access and comparative advantage, and agglomeration economies such as capital-good market externality and technology diffusion, play an important role in MNCs’ economic geography.
Hak K. Pyo
This chapter provides both theoretical and empirical reviews on productivity and economic development. Its starting point is the surveys on literature that stress the importance of productivity enhancement to fill the so-called twin gaps of development. The first part of the chapter reviews the concept papers of productivity, such as labor productivity and total factor productivity, and the measurement issues in productivity and growth accounting. The second part of the chapter reviews theoretical models on the relationship between productivity and economic growth and development. The third part of the chapter reviews empirical studies on productivity-development linkage and recent country-specific case studies on how productivity enhancement has contributed to economic growth and income distribution. The roles of human capital, institutions, intangible capital, and natural capital are emphasized in enhancing productivity in many underdeveloped and developing countries.
This chapter explores the interrelationships between the growth of value added, employment, and labour productivity at the sub-sector level in the manufacturing sector, with a focus on large countries. Structural change in eighteen manufacturing industries (classified into early, middle and late industries) is estimated using GDP per capita as the independent variable and one of the following three—value added per capita, employment-population ratio (EP ratio), and labour productivity—as the dependent variable. The results reveal three key challenges that must be addressed during manufacturing development in order to create manufacturing jobs, increase the wage level, and sustain the manufacturing employment or slow its pace of decline. One is to develop the wearing apparel industry (including fur and leather products and footwear), and another is to determine which industries are likely to maintain the given level of employment or slow pace of employment decline.