• Saturday, December 09, 2023
businessday logo


State-Led innovation models

State-Led innovation models

In my earlier articles I had advocated that Africa’s model for growth and development should be spear-headed by the government and supported by the private sector. One critical area for the public sector to drive is innovation. This is because development cannot happen without an environment that prioritises and promotes innovation.

I am inspired by insights from the book, State of Innovation by Fred Block and Matthew Keller, which provides a deep dive into how innovation had been successfully organized over the years in the United States and other countries. It highlights the various governments playing key roles in driving innovation through initiatives by agencies like Defense Advanced Research Projects Agency (DARPA), the Advanced Research Projects Agency-Energy (ARPA-E), the Nanotechnology Initiative, and the Chinese government’s full-frontal role in driving innovation in nanotechnology (having understudied the US innovation policies ). The economist, Mariana Mazzucato, in her book, the Entrepreneurial State, illustrates Apple’s success as being anchored on state-funded technologies, which were responsible for smart features such as touch screen display, GPS, and the voice activated SIRI among many others.

Read also: Investment opportunities in Africa’s emerging health innovation capital

Consequently, African governments can and should play central roles in driving, promoting and coordinating innovation. It is not enough for the government to just spend on basic research; it should set the direction and ensure that structures exist to enable collaboration between public, private, and the not-for-profit sectors to give rise to investment-led growth that crowds-in activities across actors and sectors. The expected resultant effect of the state playing co-shaping roles is that priority societal challenges will be solved collaboratively resulting in the creation of public value for all citizens.

Related News

To achieve success in driving innovation governments will need to establish missions to provide the means to direct research, innovation and investments to solve societal problems, while also spurring growth and jobs. The Mission-oriented approach puts government at the heart of the process of innovation as it involves the collaboration of different sectors to solve specific problems like youth unemployment, poor health systems and climate change instead of just implementing regulations and tax incentives.

The Lagos State Innovation Master Plan that was launched in December 2019 by the Lagos State government is definitely one to watch as it is meant to engage with the technology ecosystem to co-create solutions for its Smart City agenda. This aligns with the state’s vision statement- “Making Lagos Africa’s model mega city and globalState-Led innovation economic and financial hub”. This master plan could be defined as a mission-oriented approach if it enables the development and implementation of innovative solutions to solve Lagos’ major problems, which have been clearly identified under the governor’s T.H.E.M.E.S, which stands for T- Traffic Management and Transportation, H- Health and Environment, E- Education and Technology, M- Making Lagos a 21st Century Economy, E- Entertainment and Tourism and S-Security and Governance.

Finally, government needs to consider different possible models to adopt for funding viable solutions to drive innovative growth. One possibility is for the dedicated unit within government that is responsible for driving collaboration and partnership between public, private and civil society to be charged with funding viable solution-driven innovative products or services to solve societal problems. This unit will play the role of the investor of first resort by taking stakes in viable start-up companies for a fixed period, rather than just providing loans. The expected outcome of this model is that government will share the risks and the rewards of these innovative ventures instead of just receiving repayment from loans. Also, if the products or solutions succeed, dividends earned can be ploughed back into an innovation fund to finance other innovative start-up companies. The bottom line is that we need to come up with our own unique funding models to finance innovation and facilitate sustainable development of our country.