Are African micro- and small enterprises misunderstood Unpacking the relationship between work organisation, capability development and innovation

Abstract

Mainstream studies on innovation consider innovation processes as necessarily driven by expenditures on formal R&D and the input of engineers and scientists with third-level degrees. This bias in the literature has led to the view that micro-and small enterprises (MSEs), which constitute the majority of Africa's enterprise base, are non-innovative. Building on an existing critique largely emerging from developing countries, this study provides evidence that, despite their lack of formal R&D expenditures, MSEs in Nigeria, South Africa, Tanzania and Uganda are in fact active innovators. The paper argues that the mainstream literature fails to capture important dynamics and practices that are central to innovation in MSEs. Arguing that the way work activity is organised is closely linked to learning, capability development and, ultimately, innovation, the paper unpacks the relationships between these three processes with evidence from MSEs in the four African countries. The empirical findings demonstrate that an important basis for the innovativeness of African MSEs is the adaptability of employees and their ability to learn on the job and to make use of their own ideas in solving the problems they face in work.

The effects of digital transformation on innovation and productivity: Firm-level evidence of South African manufacturing micro and small enterprises

“…While there is evidence that MSEs including informal economy businesses are creative and can contribute to the generation of new products (Wunsch-Vincent and Kraemer-Mbula, 2016), there have been few quantitative studies focusing on the determinants and effects of innovation on MSEs in South Africa. The few exceptions (Booyens, 2011;Booyens et al, 2013;Kraemer-Mbula et al, 2019) are largely descriptive and none of them has focused on manufacturing activities. In part, this reflects the lack of data as the national innovation surveys carried out in South Africa and other African countries are limited to registered firms.…”

Front-end Innovation and Top Income Inequality: Evidence from Emerging Markets

“…However, in contrast to developed countries, time-series data on FEI and income inequality is limited. The data constraint is because traditional measures of innovation such as R&D expenditure and patents are less likely to be observable in small firms (Acemoglu et al, 2006 ) and emerging markets (Gorodnichenko & Schnitzer, 2013 ; Kraemer-Mbula et al, 2019 ). Moreover, governments across middle Africa do not prioritize the collection of innovation data.…”

“… 14 Radical technological change in developing countries is mainly captured by new firm creation, and not intellectual property like patents (Kraemer-Mbula et al, 2019 ; Srholec, 2011 ). …”

“… 18 Radical technological change is captured by new firms entering the market rather than intellectual property like patents. Moreover, Intellectual property development is discouraged in emerging markets due to institutional factors like poor legal rights (Quatraro & Vivarelli, 2015 ; Srholec, 2011 ; Kraemer-Mbula et al, 2019 ). Developing countries with low entrepreneurial human capital and a poor business environment will not benefit significantly from spillover effects (Gorg & Greenaway, 2004 ).…”