Innovation is a key driver of economic progress and benefits people. consumers, businesses and the economy as a whole. How does she fill this role, how does it contribute to economic growth and how can it be promote ?
What is innovation?
In economic terms, innovation describes the development and implementation of ideas and technologies that improve goods and services or make their production more efficient.
A classic example of innovation is the invention of the steam engine in the 18th century. century, which enabled mass production in factories and revolutionized transport with the railroads. More recently, information technologies have transformed the modes companies’ production processes and the sales channels for their goods and services, while paving the way for new markets and business models.
Why do we need innovation?
One of the main benefits of innovation is its contribution to economic growth. To put it simply, innovation can lead to an increase in productivity, in other words, an increase in production with the same inputs. Higher productivity results in increased production of goods and services, i.e. the growth of the economy.
New ideas and technologies are designed and implemented, increasing the production with the same inputs. The increase in the production of goods and services pushes wages and the profitability of rising businesses.
Innovation and productivity growth are hugely beneficial to companies. consumers and businesses. Workers' wages are rising thanks to the increase in productivity. They can thus buy more goods and services. The companies, meanwhile, increase their profits and can invest and hire.
Initially, innovation is generally limited to the company using for the first time a new technology that it has developed. To bear full fruit, it must spread through the economy and take advantage of the same way to companies of all sizes, active in different sectors. This is called the process of diffusion of innovation.
The changes on the continent harbor opportunities for growth and innovation.
Since 2015, the African Development Bank (AfDB) outlined the continent's five priorities: Enlighten, Nourish, Industrialize, Integrate and Improve the quality of life of African populations.
This program:
– which focuses on infrastructure, regional integration and private sector growth
– directly impacts any strategy that an economic actor would like to develop in the area
Why ? Because it fixes for the next few years the sectors most likely to welcome your future opportunities.
How ? By guaranteeing real innovation needs.
By what means ? By providing public funding to support growth.