Are African Countries Learning At All?
Developing
countries, usually considered ‘latecomers’ in development, can create learning
opportunities for themselves through channels of knowledge diffusion and
technology transfer such as international trade and foreign direct investment.
Now that foreign
investment promotion has become central to the industrial policies of most African
economies, it is important to evaluate how much of the positive trends in FDI inflows
are associated with local learning and improvements in local ways of doing
things. Put differently, is FDI to Africa delivering on its ‘promise’ to
promote local learning relationships?
Also,
against the backdrop of the recently adopted sustainable development goals (SDGs)
and the dire need for manufacturing-driven structural transformation in Africa,
it is imperative to examine what role existing foreign capital plays in
stimulating learning and enhancing domestic capacity.
In
a recent paper,
we provide a narrative on the role of FDI in promoting collaborative learning
in an African context. Based on the assumption that firm-to-firm learning is
not automatic, we examine how absorptive capacity impacts on firm-level
learning and productivity in manufacturing – a crucial engine of growth and
industrial development.
We conceptualize a learning
economy as one in which the ability to attain new competencies is essential
for the performance of firms, regions, countries and economic success of
individuals. This requires an exploitation of the science, technology and innovation (STI) as well as the learning by doing, using and interacting (DUI) modes of learning.
For instance, the learning experience
of China and Taiwan demonstrates how developing countries can catch-up, leapfrog
and build domestic capacity by combining the DUI mode of learning with international trade and foreign direct
investment.
Juxtaposing
findings from a firm-level survey of Nigerian manufacturing firms with those
from other firm-level studies within African contexts, we find that linkages between host country firms
and foreign firms are necessary for effective technological learning to
transpire and for firms to take on productive approaches.
Although
African development policy claims the existence of frameworks for collaborative
learning between foreign-owned and local firms, this is far from realities on
the ground.
Overall,
the paper
argues that building domestic
absorptive capacity is central to creating a local learning economy in Africa. It
also recognizes the need for more firm-level studies on the effects of MNCs’
presence on learning and capacity building in African environments.
Moving
ahead, African governments should prioritize the creation of learning effects from
FDI with the same tenacity with which they drive investment promotion.
The discussion continues…
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