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In January 2016, Stephen J. Ezell, Adams B. Nager, and Robert D. Atkinson released a very interesting report – one that speaks very well for nations such as South Africa and Kenya. In their paper, the authors tried to rank 56 countries according to their contributions to global and national innovation based on 27 factors; the two African countries ranked 30th and 51st, respectively. Granted, these growing nations still have some improvements to make, but they’re well on their way. Here’s an explanation of South Africa and Kenya regarding business growth and innovation – what you should know.

The importance of innovation

The world’s economies are interlinked, and “more innovation will be the determining factor in achieving greater progress,” state the authors in their summary. It’s not just enough for nations to promote innovation within their own borders; their policies should be aligned with a global vision. Innovation, in essence, is the creation of ‘new value’ to the world – and it doesn’t really matter whether that innovation is created by new products or services, by new business models, new technology, or new social entrepreneurship. What matters is that it makes growth possible. Without it, growth is seriously hindered.

The indicators

indicatorsA country’s economic policies can either hurt or encourage innovation and growth. For this reason, the report considered 17 indicators, grouped into two – the ‘contributors’ (factors which allow innovation such as human capital, taxes, and R&D) and the ‘detractors’ (factors which would hamper innovation such as IP protections, Balkanised consumer markets, and Balkanised production markets). These indicators were then given a certain weight and compiled to give each country a score. It was quickly found that countries that didn’t invest much in scientific research (like Argentina, Mexico, and Indonesia) scored poorly whilst those with policies in place that underscore the global community and think internationally – Finland, Belgium, and the Netherlands - ranked very high.

The winners

Not surprisingly, Finland, Sweden, and the UK stood out as winners, but in absolute terms the USA still leads the pack. Interestingly, South Africa tops the list of the BRICS partners with a big lead. According to technology news site IT Web, South Africa's National Development Plan is the blueprint for "the national system of innovation to function in a coherent and coordinated manner, with broad objectives aligned with national priorities.”

Considering there are 196 countries in the world, the report speaks very well for South Africa and Kenya, with the former belonging to the top 6th and the latter almost reaching the top 25% mark. It’s something to look out for: the two countries are proving that business growth and innovation are very likely to spur on investments - and ultimately, national progress. An additional note: make sure you have plenty of relevant Africa business information if investing in the region. With the right Africa business information, you can go a long way indeed.

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