Technological Capability and Industrialisation in Africa

This paper focuses on the direct and indirect role of technological capability in the industrial development of Africa. First, we propose a unified analytical framework to study technological capability in Africa. The unified analytical framework measures technological capability along four dimensions: technology precondition, technology infrastructure, technology imports, and technology effort. We characterise these four dimensions, and also operationalise them using hard data. In contrast to the conventional view, we document strong heterogeneities in the levels of technological capabilities among countries in Africa. Second, we employ a spatial econometric model to examine how industrial development in an African country depends on the country's technological capability, and the technological capability and industrial development of other African countries. Our results show strong evidence of technological and industrial development interdependence among countries on the continent. Importantly, we find that the channel through which this interdependence is propagated is intra-regional trade. Our result holds important implications for the need to promote regional value chains in Africa and the active role AfCFTA must play in this regard.