TMCD economists have been examining discarded car-wheels, sampling the latest fashions and blitzing their taste buds with red-hot chili sauce – all in the name of researching business innovation in Africa. 

The research team undertook a survey of innovation in formal and informal businesses in Ghana, the results of which are published in a new report: Innovation in Low Income Countries. 

The study found evidence that:

• Business innovation is thriving in Ghana - without the benefit of science labs, R&D geeks or management consultants.
• Firms are forced to innovate to survive so they deploy both technical and managerial innovations. (But financial restraints mean these mostly take the form of low cost measures).
• Innovation enables small businesses to survive and excel.

And these innovations are significant drivers of business success.  

The study’s leader, TMCD’S Professor Xiaolan Fu says:

“We found numerous examples of African entrepreneurs finding ingenious new ways to turn a profit. Their talent for remodeling old car-wheels into cook-stoves, designing amazing fashions from local textiles, or making delicious food products from the most humble ingredients - to name just a few examples - is much more than just a local curiosity.”  

But the report, which was discussed by 100 academics, policy-makers and business leaders at a two-day workshop following a launch at a conference in Accra, says that businesses in low income countries like Ghana have limited capacity to absorb innovation because they face huge constraints on skills and finance. And they have not benefited as much as they should have from international knowledge transfer because of their lack of openness to the international innovation system and their absence from international collaboration.

The launch conference, which aimed to make an impact in Ghana by disseminating and debating the research there, heard Ghana’s Minister of Environment, Science, Technology and Innovation Mr Akwasi Oppong Fosu urge the Ghanaian government to:

“continue to track progress in innovation across the economic sectors and more importantly, analyse the constraint and issues that needed to be addressed to enhance innovation in the country”.

The study concludes that local innovation has the potential to be an important means for developing the economies of low-income countries. It says governments and donors should support and nurture native talent for innovation in developing countries just as much as governments in the developed world nurture the high tech innovations (like broadband and touch-screens) that we all know are driving advanced economies forward. They should also help local entrepreneurs to learn about and adopt innovation from abroad. Watch TMCD’S video about the study.