An Evolutionary Analysis of Transformative Change in LDCs: the cases of Kenya and Rwanda

Jan Fagerberg, Erika Kraemer-Mbula and Edward Lorenz
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Erika Kraemer-Mbula: DST/NRF/Newton Fund Trilateral Chair in Transformative Innovation, the Fourth Industrial Revolution and Sustainable Development, College of Business and Economics, University of Johannesburg
Edward Lorenz: College of Business and Economics, University of Johannesburg and Aalborg University Business School, Aalborg University

No 20210623, Working Papers on Innovation Studies from Centre for Technology, Innovation and Culture, University of Oslo

Abstract: This paper draws on insights from evolutionary economics to enrich our understanding of the prospects for development in low-income countries. Drawing on analysis Freeman and Perez (1988) of the basis for changes in technological economic paradigms, the paper argues that the current process of digitalization in combination with developments in renewable energy are providing a ‘window of opportunity’ for accelerated economic growth and catch-up in low-income countries. The argument is illustrated with reference to the cases of Kenya and Rwanda both which stand out for their governments’ foresight in pursuing policies designed to promote a transformation based on the opportunities offered by the revolutionary changes in technology from the early to mid-2000s. Transformative change requires innovations in business models, in products and process and in modes of marketing and distribution. Drawing on innovation systems theory, the paper considers to what extent the problems firms face in Kenya and Rwanda in accessing resources in terms of needed knowledge, skills and finance have constrained the development of their innovation capabilities. The paper concludes by assessing the policies governments have enacted in attempting to respond to these constraints.

Pages: 25 pages
Date: 2021-06
New Economics Papers: this item is included in nep-ene, nep-hme and nep-ino
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Citations: View citations in EconPapers (1)

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