Unemployment in Nigeria: The significance of optimizing benefits of innovation

Fisayo Fagbemi, John Oluwasegun Ajibike and Teniola Abosede Adesanya

African Journal of Science, Technology, Innovation and Development, 2025, vol. 17, issue 3, 336-346

Abstract: Reflections on the problems facing the labour market in Nigeria and the need to proffer solutions to the high unemployment rate in the country call for an assessment of the possible relationship between innovation and unemployment between 1990 and 2020. Hence, this study examines whether innovation is a key determinant of unemployment, and the role it plays in the face of increasing unemployment rates. Autoregressive Distributed Lag (ARDL) bounds testing to cointegration approach and Vector Error Correction Mechanism (VECM) for the exploration of long-run causal association are the major techniques employed in the study. The results indicate that the explanatory variable, which is process innovation, measured by patent applications, residents, is adversely associated with the dependent variable (unemployment rate) in the long run as well as in the short run, suggesting a decreasing effect. In addition, it is observed that increased innovation drive is necessitated by the high unemployment rate in the economy, suggesting a one-way causal relationship, whereby unemployment promotes innovation efforts. The study, therefore, establishes that unemployment is one of the developmental problems facing Nigeria, thereby supporting the view that innovation remains a key factor required to address the alarming unemployment situation, as the country's unemployment rate has reached 33.3% based on the NBS report, 2021.

Date: 2025
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DOI: 10.1080/20421338.2025.2461820

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