TY - JOUR
T1 - Innovation and entrepreneurship for sustainable development
T2 - Lessons from Ethiopia
AU - Shkabatur, Jennifer
AU - Bar-El, Raphael
AU - Schwartz, Dafna
N1 - Funding Information:
The focus on spatial regional planning is supported by various international institutions, such as the World Bank, through its Country Partnership Framework (CPF), which attaches high importance to the support for an increasingly spatially inclusive approach toward development ( World Bank, 2021a , 2021b ), the European Union through its Emergency Trust Fund for Africa ( European Commission, 2021 ), and the United Nations Development Programme (UNDP) through its participation in the Developing Regional States (DRS) program ( UNDP, 2021 ).
Funding Information:
This study was funded by the United Nations Development Programme (UNDP) as part of the activities of its Inclusive Growth and Sustainable Development Unit of the Country Office in Ethiopia. The unit provided all expenses for the three researchers involved in this project and covered all internal support of local transportation, secretarial work, and organization of workshops and meetings. We are grateful to UNDP for recognizing the importance of innovation for development, spearheading and supporting this assessment, connecting us to all relevant stakeholders in the Ethiopian innovation ecosystem, and setting up various arrangements that enabled the implementation of our methodology. We are also thankful to the Embassy of the State of Israel in Ethiopia, which provided ongoing support, and the international development partners—KOICA, JICA, USAID, and the Ethiopian Kaizen Institute—for providing continuous and generous support for the development of innovation policies in Ethiopia. This assessment would not have been possible without the valuable inputs, contributions, and feedback from participants in the Ethiopian innovation ecosystem: innovation champions at the Ministry of Innovation and Technology; Ministry of Science and Higher Education; Ministry of Agriculture; Ministry of Youth, Women, and Children; Federal TVET Agency; and the Federal Jobs Creation Commission; regional government authorities (innovation & technology bureaus, agencies, and directorates from Amhara; Gambella; Harar; Hawassa, Somali Region; SNNPR; Tigray; Addis Ababa; and Dire Dawa); private sector innovation champions (Entrepreneurship Development Center; Chamber of Commerce; Bankers’ Association; Coffee Industry Association; Leather Industry Association; Enat Bank; Development Bank of Ethiopia; xHub Addis; BlueMoon; and iCog); and finally, the academia representatives (Addis Ababa University, Ethiopian Biotechnology Institute, and Ethiopian Biodiversity Institute).
Publisher Copyright:
© 2021 Elsevier Ltd
PY - 2022/6/1
Y1 - 2022/6/1
N2 - This study explores whether and how innovation policy concepts can be adapted to address the needs of low-income developing countries and how they can advance their sustainable development objectives, such as economic growth, increased productivity, entrepreneurship, and job creation. We devise a conceptual approach for ensuring the advancement of innovation and entrepreneurship in low-income countries, design and test a methodology for implementing the conceptual approach, and utilize the case of Ethiopia for demonstration. The Ethiopian case is noteworthy due to a combination of various factors—high economic and demographic growth over the past years, acute need for job creation and focus on marginalized and vulnerable groups in society, need for regional and spatial planning focus, and relatively weak performance in innovation. Considering the challenging conditions in Ethiopia, we assess the conditions for innovation and entrepreneurship promotion in low-income countries. Moreover, we test the performance of seven ecosystem factors (finance, human capital, infrastructure, information, academy, government services, and culture) through key informant interviews, focus-group discussions, and questionnaires involving all ecosystem actors: government, academic and research institutions, and business leaders. Each factor is evaluated using 91 variables. Two aspects are evaluated for each variable on a 1–5 scale: the perceived importance of the variable for innovation advancement, and the current availability of the variable in Ethiopia. The gap between the two scores indicates the “frustration” level of the respondents. The findings indicate a challenging economic situation and low innovation level, but simultaneously high potential for growth—based on a growing market, significant GDP growth, and considerable government commitment and efforts. The ecosystem analysis results show that respondents attributed high importance to all ecosystem factors, but expressed frustration due to the low availability of the factors, as well as their weak interaction within the ecosystem—low coordination between government, industry, and academia; insufficient coordination within government; and low interaction among businesses. Based on the analysis results, several directions for innovation and entrepreneurship policy guidelines are derived. 1. Adoption and adaptation. The innovation policy of low-income developing countries should not focus on new knowledge creation. The policy should instead support the adoption and adaptation of incremental innovations, which may have a significant multiplier effect, thereby generating jobs, affecting a numerous consumers and enterprises, and enhancing economic growth. 2. Impact innovation. The innovation strategy of low-income countries should aim to generate an impact on broad segments of the economy. Priority should be given to innovation types in sectors that can lead to major economic impacts and boost productivity and employment—for example, in agriculture, traditional industry, and small and medium-sized enterprises (SMEs). 3. Demand-oriented innovation. Demand-oriented innovation, rather than supply-oriented innovation, focuses on market needs. Instead of encouraging technology push, the innovation policy should focus on market pull, respond to people's unmet needs, and support privatization. 4. Spatial innovation. Innovation policies in a low-income country should adopt the concept of “concentrated dispersal” of innovation activities, thereby providing special grants or funds to SMEs in specific regions or supporting impact investments in priority regions. 5. Government coordination. The innovation capabilities of ecosystem actors are strengthened through mutual learning processes and by facilitating interactions among stakeholders in the innovation community. Therefore, supporting innovation, particularly in a low-income country, necessitates a governmental coordination platform that would set up development priorities, strengthen coordination and collaboration among the ecosystem factors, and provide appropriate regulations, infrastructure, and financial and legal services.
AB - This study explores whether and how innovation policy concepts can be adapted to address the needs of low-income developing countries and how they can advance their sustainable development objectives, such as economic growth, increased productivity, entrepreneurship, and job creation. We devise a conceptual approach for ensuring the advancement of innovation and entrepreneurship in low-income countries, design and test a methodology for implementing the conceptual approach, and utilize the case of Ethiopia for demonstration. The Ethiopian case is noteworthy due to a combination of various factors—high economic and demographic growth over the past years, acute need for job creation and focus on marginalized and vulnerable groups in society, need for regional and spatial planning focus, and relatively weak performance in innovation. Considering the challenging conditions in Ethiopia, we assess the conditions for innovation and entrepreneurship promotion in low-income countries. Moreover, we test the performance of seven ecosystem factors (finance, human capital, infrastructure, information, academy, government services, and culture) through key informant interviews, focus-group discussions, and questionnaires involving all ecosystem actors: government, academic and research institutions, and business leaders. Each factor is evaluated using 91 variables. Two aspects are evaluated for each variable on a 1–5 scale: the perceived importance of the variable for innovation advancement, and the current availability of the variable in Ethiopia. The gap between the two scores indicates the “frustration” level of the respondents. The findings indicate a challenging economic situation and low innovation level, but simultaneously high potential for growth—based on a growing market, significant GDP growth, and considerable government commitment and efforts. The ecosystem analysis results show that respondents attributed high importance to all ecosystem factors, but expressed frustration due to the low availability of the factors, as well as their weak interaction within the ecosystem—low coordination between government, industry, and academia; insufficient coordination within government; and low interaction among businesses. Based on the analysis results, several directions for innovation and entrepreneurship policy guidelines are derived. 1. Adoption and adaptation. The innovation policy of low-income developing countries should not focus on new knowledge creation. The policy should instead support the adoption and adaptation of incremental innovations, which may have a significant multiplier effect, thereby generating jobs, affecting a numerous consumers and enterprises, and enhancing economic growth. 2. Impact innovation. The innovation strategy of low-income countries should aim to generate an impact on broad segments of the economy. Priority should be given to innovation types in sectors that can lead to major economic impacts and boost productivity and employment—for example, in agriculture, traditional industry, and small and medium-sized enterprises (SMEs). 3. Demand-oriented innovation. Demand-oriented innovation, rather than supply-oriented innovation, focuses on market needs. Instead of encouraging technology push, the innovation policy should focus on market pull, respond to people's unmet needs, and support privatization. 4. Spatial innovation. Innovation policies in a low-income country should adopt the concept of “concentrated dispersal” of innovation activities, thereby providing special grants or funds to SMEs in specific regions or supporting impact investments in priority regions. 5. Government coordination. The innovation capabilities of ecosystem actors are strengthened through mutual learning processes and by facilitating interactions among stakeholders in the innovation community. Therefore, supporting innovation, particularly in a low-income country, necessitates a governmental coordination platform that would set up development priorities, strengthen coordination and collaboration among the ecosystem factors, and provide appropriate regulations, infrastructure, and financial and legal services.
KW - Ecosystem
KW - Ethiopia
KW - Innovation
KW - Low-income countries
KW - Policy planning
KW - Regional planning
UR - http://www.scopus.com/inward/record.url?scp=85108550881&partnerID=8YFLogxK
U2 - 10.1016/j.progress.2021.100599
DO - 10.1016/j.progress.2021.100599
M3 - Article
AN - SCOPUS:85108550881
VL - 160
JO - Progress in Planning
JF - Progress in Planning
SN - 0305-9006
M1 - 100599
ER -