Development

G7 Leaders’ Summit: the role of innovation as a driver of growth and development in Africa

 

Remarks by Angel Gurría,

OECD Secretary-General

Taormina, 27 May 2017

(As prepared for delivery)

 

 

Chair,
Excellencies,


At the request of the Italian G7 Presidency, we produced a new report on the “Next Production Revolution”, that is, the confluence of digital technologies, biotechnology, new materials and new processes which will have far-reaching consequences for productivity, jobs, skills, the environment - our lives in general.


What will innovation and technological change mean for Africa’s future growth?


Our latest figures, published in the just-released AfDB-OECD-UNDP African Economic Outlook, project growth at 3.4% in 2017, up from 2.2% in 2016. 60% of this year’s growth in Africa is driven by endogenous sources. Economies are also diversifying away from the extractive sector. But growth remains below the 5% performance observed during the first decade of the 2000s.


The economies of the continent need to harness the growth and productivity potential stemming from innovation and from the technological revolution in the making. And to help raise labour productivity, which remains way below the level of more advanced economies. OECD countries invest 2.3% of their GDP in R&D, in most emerging and developing economies, this is below 1.


Innovation is at the heart of entrepreneurship and industrialisation. Thus, the NPR will be key to tackling Africa’s biggest challenge: creating 29 million new jobs per year until 2050 for its young population.


The continent has shown it can rapidly adopt new technologies. At the turn of the century, for every 100 people in Sub-Saharan countries, only 2 had a mobile subscription. As of 2015, more than 75% of the population had access to this technology. Meanwhile mobile broadband went from less than 2% in 2010 to just under 20% in 2015.

  • Africa is witnessing the fastest urbanisation process in human history. Digital technologies and big data can improve planning and service delivery and make Africa’s cities smarter, cleaner and more inclusive.

  • Mobiles are bringing financial services to millions of unbanked and under-banked people. Kenya and Nigeria are more advanced in mobile banking than many OECD countries. Sub-Saharan Africa as a whole has over 222 million mobile money accounts, more than all other developing regions combined.

  • Low-cost drones could make agriculture more efficient. Digital technologies could help streamline cargo handling and reduce food losses. Satellite imagery can provide important data on land and water use.

But to make the most out of the innovations, a number of conditions need to be in place: 

  • Good basic literacy, numeracy and problem-solving skills are required, as are tertiary level institutions that can educate students in science, technology, engineering and mathematics. Many firms are looking for young people with technical skills but cannot find them. In South Africa, for example, firms report 600,000 vacancies, while 800,000 young university graduates are unemployed.

  • Beyond the need for quality physical infrastructure, especially electricity, to allow for greater integration in regional and global value chains, the Next Production Revolution also requires reliable and secure broadband infrastructure. A critical ingredient to make this happen is competition - and we can attest to the large positive impact of stronger competition both on prices and on the availability and quality of telecommunications services.


We must encourage economic growth that creates opportunities for all segments of society and distributes the dividends widely. In other words: inclusive growth. Innovation and the Next Production Revolution can be forces for stronger, greener and more inclusive growth in Africa.


The OECD believes Africa can be a powerful engine of growth. For this reason we are scaling up our engagement with Africa. We stand ready to work with you and for you to help Africa harness innovation for inclusive growth and prosperity.


Thank you.

 

See also

OECD work on development

 

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