Leveraging technology transfer for competitive advantage in African firms

Abstract

Africa has long been considered as the next big growth market, according to both experts and economic organisations alike (World Economic Forum, African Union, The Economist, McKinsey). With a youthful population, a burgeoning consumption market, and its increased digital advancement, Africa has unrivalled potential. However, economic progress has lagged, necessitating the need to leapfrog, i.e., harness technological innovation to accelerate economic growth, to contribute towards realising the 2030 Sustainable Development Goal “Decent Work and Economic Growth”. Additionally, Africa cannot afford not to, given the downsides of the lack of economic growth (instability and extremism). In academic research, technological innovation is driven by firms’ and individuals’ absorptive capacity (AC), i.e., their ability to recognise new knowledge, assimilate it, and apply it for commercial ends. However, there remains a lack of understanding on how to operationalise and leverage AC. The research was undertaken with the aim to understand AC from a micro-foundational perspective within the Africa and 4IR contexts. Qualitative research was conducted across 6 African countries (Ethiopia, Ghana, Kenya, Nigeria, Rwanda, South Africa), with 16 social actors, to gain insights on the processes, mechanisms and factors that contribute towards micro-foundational AC. The key findings of this research underscore the importance of the individual within the AC process. Additionally, the importance of contextualising AC to a developing market is highlighted. Other key findings reveal the enabling and hindering factors for successful AC. This research aimed to offer a contribution towards AC micro foundational research, and to offer practical insights for African firms, within the context of the 4IR era.