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Human capital development and innovation for industrialization in Africa

17 November, 2023
Human capital development and innovation for industrialization in Africa

Addis Ababa, 17 November 2023 - The pursuit of sustainable industrial development in Africa, particularly in the age of Industry 4.0, demands a nuanced strategy that harmonizes technological innovation and human capital development.

Researchers at the Africa Economic Conference 2023 in Addis Ababa, Ethiopia, deliberated on this imperative, sharing insights into the transformative potential of Industry 4.0 for sustainable economic progress on the continent.

During the dedicated session, young researchers presented papers highlighting the critical role of policies in fostering technological innovation and human capital development. One paper, titled "Enhancing Industrial Productivity and Competitiveness in Africa: A focus on Technological Innovation and Human Capital Development," underscored the need for a holistic approach. The study, conducted by Segun Subair Awode and Musa Olanrewaju Oduola, analyzed data from 32 African nations spanning 1996 to 2021. It revealed a nuanced relationship between technological innovation, human capital development, industrial productivity, and competitiveness across the continent. While technological innovation exhibited a negative impact on industrial productivity, human capital development emerged as a robust positive influence. However, the study emphasized the symbiotic relationship between technological innovation and human capital development, generating a positive synergistic impact on industrial productivity.

While presenting the paper, Awode emphasized that the formulation and implementation of policies supporting technological innovation and human capital development are imperative for sustainable industrial development in Africa. He highlighted the need for concerted efforts to facilitate technology transfer partnerships with developed countries and multinational corporations to introduce cutting-edge technologies to local industries. "In the era of Industrial 4.0, we need a strategy that harmonizes technological innovation and human capital development for driving the industrial process in Africa," remarked Awode. He stressed the importance of investing in human capital development and establishing mechanisms for retaining talent.

To address human capital development, Awode advocated for a revamp of educational curricula to align with industry needs, placing a strong emphasis on practical skills training. He also called for investment in technical skills and vocational training programmes to address the shortage of skilled workers and retain talent on the continent.

However, Moctar Seydou, National Economist at the UN Development Programme (UNDP), suggested an Africa-centric focus to enhance the paper's relevance to the continent. Despite this critique, the paper provided valuable insights into the intricate dynamics of technological innovation, human capital and industrial development in Africa.

In another paper presented at the session, Micheal Efah Asamoah explored the relationship between foreign direct investment (FDI) and real sector growth in Africa, mediated by human capital. The study identified significant thresholds in the FDI-real sector growth relationship, emphasizing the importance of sector-specific policies for human capital development.

The session also featured a paper by Akim Almouksit and Wissal Sahel, focusing on structural change and the National Initiative for Human Development in Morocco. The study provided subnational insights, revealing that the human development programme positively affects productivity growth, particularly through structural change.

Lorenzo Mancini, a Senior Economist at the UNDP, commended the authors for their comprehensive approach, acknowledging the significance of subnational insights. However, he challenged the papers’ recommendations, calling for deeper research.