This book examines the incidence and role of clusters as a viable and increasingly important form of industrial organization in Africa. It presents a series of theoretically grounded case studies that analyze clusters in different industrial sectors and at different levels of economic development. The overall aim is to improve understanding of how local clusters can be transformed into local systems of innovation and how local clusters can be better connected to global actors. The authors draw out implications for policy and practice and provide guidance to governments, private sector associations, and non-governmental organizations.--Publisher's description.

The World Bank, Japan International Cooperation Agency (JICA) Research Institute, and the Foundation for Advanced Studies on International Development (FASID), in collaboration with researchers affiliated with the African Economic Research Consortium (AERC), recently conducted a study on Africa s domestic enterprises to improve the understanding of the constraints micro and small enterprises in Africa face in improving productivity and expanding their markets. In Africa, there are stark performance gaps between domestically owned enterprises and foreign-owned enterprises in terms of sales performance, productivity, and ability to reach distant markets. Among others, size appears to be a dominant factor in explaining the gap. Against this background, the study analyzes how naturally formed industrial clusters concentrations of enterprises engaged in same or closely related industrial activities in specific locations could potentially mitigate constraints Africa s micro and small enterprises face and enhance their business performance. The study is one of the first comprehensive quantitative inquiries on industrial clusters in Africa. The analysis specifically focuses on the role of spontaneously grown clusters of light manufacturing industries based on a set of original case studies of industrial clusters conducted for this research project. One of the key findings from the case studies was that cluster-based micro and small enterprises are performing better than similar micro and small enterprises outside of the clusters in terms of sales performance and ability to reach distant markets. Market access is a leading reason for cluster-based enterprises to choose their current locations. However, cluster-based enterprises face another set of unique growth constraints. By the very nature of spontaneous agglomera tion, new enterprises continue to flow to the clusters seeking the profit opportunities and better access to markets at such locations. The result can be intense competition in addition to increased congestion. Space constraints often impede growth within clusters. The lack of alternative locations available for industrial activities in the same cities, generic infrastructure bottlenecks, and unclear zoning policies and their unpredictable changes limit firms location choices and constrain their mobility. While competition should improve efficiency, lack of capacity among those competing cluster-based enterprises to invest and innovate does not generate growth out of the competition. The vast majority of naturally formed clusters of light manufacturing industries in Africa are still at a survival level, where agglomeration externalities are only limited to expand quantity but not quality as we observe in more advanced innovation-oriented clusters in elsewhere in the world. Existing studies on such natural industrial clusters in Africa have found that the lack of managerial skills among entrepreneurs running micro and small enterprises is a major constraint for innovation and growth in the clusters. As a part of this study, pilot managerial skills training programs were conducted in two industrial clusters on an experimental basis, where a group of randomly selected entrepreneurs within the clusters were given three-week long crush course of based management such as bookkeeping, marketing, business planning, and production management. The impact evaluation of the experiments showed significant positive impacts of the training programs on value added and gross profits of enterprises. Raising the current survival-type industrial clusters, which have been formed as a coping mechanism to weak investment climate, into more dynamic innovating clusters will be an important avenue for fostering growth of micro and small enterprises in Africa. While national efforts to improve investment climate and investments in human capital are undoubtedly important, there could be more targeted policies to be formulated, in complementing general policies, to support growth of micro and small domestic enterprises using existing industrial clusters as a natural springboard for their growth. In that context, the study discusses the merit of cluster-based managerial human capital development to build steps toward more innovation-oriented clusters, the importance of sound spatial planning policy, particularly at the local level in the context of urban planning, the need to expand market access and economic linkages for industrial clusters including regional integration and linkages with large enterprises.

The most popularised concept in the economics of innovation literature has been the national system of innovation (NSI). It was in the late 1980s that the concept that Frederik List coined as the National Political Economy of Production took off again with different thinkers writing about the peculiarities and distinctions of the Japanese, American, British, German, East Asian Tigers and other varieties of system construction. Freeman defines National System of Innovation as the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diff use new technologies. Richard Nelson defines it as a set of institutions whose interactions determine the innovative performance of national firms. Lundvall defines the system of innovation as the elements and relationships which interact in the production, diffusion and use of new and economically useful knowledge and are either located within or rooted inside the borders of a nation state. The normative assumption is that those nations that succeeded in building economic strength relied on the science, engineering, technology and innovation capability that made them to achieve an innovation advantage to put them ahead in the world, acquiring national or regional economic leadership as the case may be depending on what level of analyses is selected to look at particular failure, success or progress they made. In this volume we have a glimpse of how in different African economies from Ghana, Uganda, Kenya, South Africa and Nigeria specific cases have been taken to explore how systems of innovation is evolving.

Sustainable Industrialization in Africa explores the issues that confront development policy in the context of the MDGs and the post-2015 development agenda from an African perspective. The book argues that development is an ultimate outcome of sustainable, equitable industrialization, and that any development agenda for the future has to ensure that industrialization is fostered in a way that makes economies independent and responsive to the needs of all citizens. Future challenges for sustainable industrialization in Africa, based upon the differences in its current industrialization trajectories, are discussed to ensure that industrial growth results in positive economic and social outcomes in the context of the post-2015 development agenda.

Policies to stimulate innovation at national and local levels must both build on and contribute to the dynamics of innovative clusters. This book presents a series of papers written by policy makers and academic experts in the field, that demonstrate why and how this can be done.

This book examines the institutional roots of the persistent differences in economic performance of firms, industries and countries in Africa. It draws attention to the role of institutions in supporting technical change and shows how technological progress is central to competitiveness in a global context. The role of initial conditions such as levels of literacy and natural endowment, the structure of industry and resource endowment are also emphasized. With its focus on how institutions shape systems of innovation this book makes a unique contribution to the debate about African development.