This chapter attempts to trace and connect the current economic structure, patterns of trade and the significance of the informal sector in Ghana and Tanzania to socio-economic and historical factors. The chapter then compares and contrasts both countries based on key economic indicators, arguing that colonization and the economic recovery programme (ERP) and the structural adjustment programme (SAP) are the two main factors that have defined the economic structures in both economies.

Both the knowledge and technology diffusion literature largely focus on adoption and adaptation at country and firm levels. The literature on how knowledge and technology are transferred, adopted and adapted at the level of the individual remains under-researched. Based on a unique employees and managers MNE in Ghana in 2015 and using social network analysis, this chapter examines the transfer of knowledge at the individual level and presents new evidence on the role of managerial knowledge diffusion from MNEs to host countries. Our results indicate that knowledge flows occurs from MNEs to local people. We, however, found that foreign knowledge transfer, particularly from Chinese MNEs and EU MNEs, is similar. The results also suggest that firm network structures influence knowledge transfer within firms, with the more decentralized MNEs and local workers in Chinese MNEs tending to perform better. In terms of policy recommendation, the chapter suggests that trade policies must focus on the stimulation of FDI inflows through MNEs that have decentralized subsidiary structure as they tend to serve as a better conduit for knowledge transfer to local employees

Several developing countries have formulated and implemented Science, Technology and Innovation (STI) policies. However, little remains known about the Science, Technology and Innovation space and the role STI policies play in enhancing innovation activities in developing countries. This chapter analyses the Science, Technology and Innovation policy space, and presents an understanding of their current status and impacts in Ghana and Tanzania. Based on two waves of survey data collected in 2013 and 2015 on formal firms and informal firms in Ghana and Tanzania, our findings suggest that while firms affirm the importance of STI policies, these policies are often poorly planned and implemented poorly. The existence of market and system failures are also found to constraint interactions and the performance of actors in each country's innovation system. The chapter therefore calls for government intervention to enhance the working of the national innovation systems.

While literature on innovation and the diffusion of innovation in developing countries has grown over the years, the evidence remains inconclusive. This chapter employs a systematic review protocol to examine and shed light on the factors that influence the creation and diffusion of innovations as well as the internal and external channels of innovation diffusion in low-income countries. The evidence suggests that the literature is still nascent, with most of the studies published only in the last five years. While factors such as clusters, the link between public (universities) and private sector, and the empowerment of the poor are key facilitators of knowledge diffusion, other factors including weak education systems, unstable political powers, fragile legal systems, limited financial resources, poor infrastructure, and cultural and linguistic distances all hamper the diffusion of innovations in low-income countries. These enhancing and hampering factors were, however, identified to be heterogeneous and vary from one developing country to the other. With research gaps in areas such as the determinants of innovation diffusion in the informal sector and the role of open innovation networks in LIC, among others, it is recommended that low-income countries must focus attention and resources on measuring and capturing incremental innovations and innovation activities in formal and informal settings.

Over the years, data unavailability has limited the empirical analysis of the relationship between innovation and firm growth, leading to the partial understanding of this relationship in low-income countries. This chapter fills these gaps by using a unique firm-level data to estimate the effect of technological and non-technological innovations on firm productivity in Ghana. The econometric estimations show innovation as an important determinant of labour productivity, for both formal and informal firms. Our results also suggest that technological innovation leads to higher labour productivity than non-technological innovation. New policy thinking and policies are needed to recognize, support and enhance the innovation activities in both formal and informal firms, by mitigating critical constraints such as financial and labour skill constraints formal and informal firms both face.

There is a growing recognition that African firms are innovating and these innovations are important to African economies. This chapter provides a general introduction to the book by introducing the broad objectives, the research design and methods as well as the research questions tackled in each of the subsequent chapters of the book. In addition, the chapter presents the structure of the book and summarizes the major findings in each chapter.

This chapter analyses how the gender of the entrepreneur is associated with firm-level innovation performance, both directly and in conjunction with other firm and manager attributes. Using a unique survey data set collected in 2013 from the DILIC project in Ghana, and formulating a two-stage model, the chapter examines if gender differences exist in firm-level innovation activities in Ghana. Our analyses show significant differences in innovation behaviour between women’s and men’s firms, suggesting that women are less likely to introduce technological and new-to-market innovations, and also sell less of innovative products. However, the results show that women are more active in adopting non-technological, especially marketing, innovation. For policy, the chapter offers new insights into gender differences, and the role of informal firms in the innovation system of Ghana, and suggests that there is a need for new policy redirection towards informality on the one hand and the need for specific institutional arrangements to address this gender gap on the other hand.

This chapter summarizes the findings from this book and develops the framework for the analysis of under-the-radar innovation and its nature, sources and impact, as well as the policy implications from the research. It argues that Africa cannot leapfrog the 4th Industrial Revolution with the under-the-radar type of innovation. Therefore, policy responses at the national and international levels are needed to address these challenges and to build an inclusive global community. Limitations of the study and areas for future research are discussed at the end of the chapter.

Interactions between firms, universities and other actors in the innovation system are essential for open innovation. Empirical literature on the relationship between open innovation strategies and firm performance in low-income countries however is less and heavily biased towards developed countries. This chapter examines the role of open innovation strategies on the innovation performance of firms in Ghana and Tanzania, and explores further the roles of university–industry collaborations and the participation of regional and global production networks on capability development of African firms. Based on primary data, our results show that open innovation strategies – external knowledge search, clusters, collaboration and regional value chains – help firms in Ghana and Tanzania to circumvent the many constraints they face in their day-to-day operations. In terms of policy, the chapter suggests that there is a need for policy actions that directly help to support and promote open innovation strategies within and between formal and informal sectors