Failing to Compete

Failing to Compete

Technology Development and Technology Systems in Africa

Sanjaya Lall and Carlo Pietrobelli

This unique study draws on extensive fieldwork assessing technology systems in Ghana, Kenya, Tanzania, Uganda and Zimbabwe in the context of their export competitiveness. Its emphasis is on the role of technology systems in building industrial competitiveness and in this it finds deficiencies in the systems in all these countries, though there are also significant differences between them. Comparisons are made with more successful economies, particularly those of East Asia, and policy implications are drawn for the strengthening of technology support systems. Central to the book is its combination of academic analysis with a strong policy focus – policy implications are drawn for each case-study country.

Annex: Attracting Manufacturing FDI to Africa

Sanjaya Lall and Carlo Pietrobelli

Subjects: development studies, development economics, economics and finance, development economics, economics of innovation, innovation and technology, economics of innovation


In common with other developing regions, Africa is actively seeking FDI in particular export-oriented manufacturing FDI - to build industrial competitiveness and enhance economic growth. Most African countries have improved their FDI regimes in recent years. They have removed most restrictions on foreign entry and participation. Many are privatizing stateowned enterprises and utilities, and welcoming foreign investors to participate. Several have launched programmes to attract export-oriented MNCs into EPZs or similar facilities, offering generous tax and other incentives. They have liberalized their trade regimes and are negotiating or implementing a range of regional trade arrangements that promise larger markets to investors. These developments reflect not just the growing liberalization of investment and trade regimes in the developing world but also the changing international technological and competitive climate. Continuing and rapid technical change has made access to new technologies and skills more crucial for growth than ever before. Competition for scarce investment, technologies, skills and market access that MNCs embody has intensified. At the same time, liberalization has placed enormous stresses on existing industrial activities in much of Africa. Many enterprises facing direct import competition have found adjustment difficult; many have not survived (Lall, 1999c). Their ability to gear up to world competition is relatively limited, and the pace of change in global markets threatens to leave them further behind. Thus, FDI has become a vital source not just of capital but of most tangible and intangible assets that enterprises need to survive and grow. This annex analyses the FDI promotion...

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