Business & Economy

Calestous Juma: Infrastructure for innovation

Calestous Juma: Infrastructure for innovation
  • PublishedJune 26, 2015

Infrastructural development and technological innovation are both vital to Africa’s economic future. Policymakers are currently more focused on infrastructure; they should not forget its critical role in spurring innovation. 

Infrastructure is both the backbone for the economy but also the motherboard for technological innovation. Without adequate infrastructure, Africa’s economies cannot realise their full potential. The continent’s low economic performance and weak integration into the global economy is in part a result of inadequate infrastructure – mainly energy, transportation, telecommunications, water and sanitation, and irrigation.

Much of the policy concern over infrastructure focuses on issues such as rates of return on investment, impact on public finances, the formation of private-public partnerships, and identification of sources of funding. Other concerns, especially from civil society organisations, stress the environmental and social costs of large infrastructure projects.

While these concerns are legitimate and need to be addressed, they tend to overlook the role of infrastructure as a foundation for innovation. This point is clearly identified as key to the continent’s future in the 10-year Science, Technology and Innovation Strategy for Africa (STISA-2024).

Although they may differ on implementation strategy, policy makers understand infrastructure investment’s role in stimulating economic growth. What are less appreciated are the strategic connections between infrastructure investments and technological innovation.

Infrastructure projects are inherently technological in nature. They represent bundles of scientific and technical knowledge embodied in both equipment and human capabilities. Taking full advantage of infrastructure’s technological potential requires a more sophisticated approach to policy, procurement practices, and project design. The first step is recognising the magnitude of the challenge and the associated opportunities. The African Development Bank has estimated that Africa will need to invest $93 billion annually over the next decade to meet its infrastructure needs. The estimate for Nigeria is $15 billion a year. South Africa envisages investing nearly $462 billion from 2012 to 2027.

Agriculture illustrates the importance of infrastructure. Africa suffers from low agricultural productivity levels, partly as a result of inadequate rural infrastructure, especially roads, energy supply and irrigation.

Without rural roads, farmers are condemned to growing crops close to their homes – or just enough to carry home. They can hardly provide adequate food for themselves, let alone having surpluses for local trade. On average, 60% of the rural people in middle-income countries live within two kilometres of an all-season road. The figures in Africa are much lower. In Kenya, for example, only about 32% of the rural people have the same level of access. The statistics for Angola and Malawi are 31% and 26% respectively. For Tanzania, it is 24%, 18% for Mali and 11% for Ethiopia. Agricultural development in these countries is heavily influenced by access to rural infrastructure.

A large part of this investment will come from overseas. Indeed, Africa’s growing trade with China includes building infrastructure projects. Most of this has been in transport. The recent creation of the China-led Asian Infrastructure Investment Bank (AIIB) will strengthen the country’s role as a source of funding not only for Africa but also for many other regions of the world, including in the industrialised countries.

Infrastructure as technology clusters

In addition to supporting economic activities and generating employment, infrastructure projects serve as bundles of technological stocks and reservoirs for engineering capabilities. The development of geothermal energy in Kenya, for example, has also resulted in the creation of a large pool of experts working in Kenya and other countries.

The development of such projects offers Africa a unique opportunity to build the engineering and managerial capabilities needed for designing, constructing, and maintaining infrastructure projects. In addition, the projects can also be used as a basis for designing new engineering courses and research activities.

High-speed rail in South Korea was designed to help the country build up the associated engineering and managerial capabilities. One of its outputs was the creation of the Korean Rail Research Institute, set up in 1996 to develop railway transportation and enhance competitiveness in the sector.

The design, construction and maintenance of infrastructure projects involves considerable accumulation of knowledge and capabilities. Policymakers must recognise the potential to tap this knowledge to benefit the wider economy. Unfortunately, the design of such projects in Africa tends to focus most on awarding contracts to the lowest bidder, not seeking to maximise technological capacity.

Ironically, this vision existed in much of colonial Africa. When the British built the Kenya-Uganda rail in the late 19th century, they included a technical facility for repair and maintenance. Over the years, African infrastructure projects have increasingly been delinked from their technological content and are therefore underperforming.

Urban centres represent the highest concentration of infrastructure facilities. They are also the most creative and dynamic regions. They are generally not managed as sources of innovation and creativity. Fortunately, this is starting to change and cities such as Lagos, Nairobi, Accra, Pretoria and Cairo now host a variety of activities seeking to promote innovation.

City planners, however, have yet to appreciate the critical role that infrastructure could play in fostering innovation. They have been slow, for example, to understand the urgency to extend broadband access. So far, only a few countries, such as Rwanda, have recognised the power of access to broadband as a driver for innovation. For most of Africa, this infrastructure is grossly underutilised.

Smart infrastructure design

Defining infrastructure as a foundation for innovation requires a coordinated approach driven by high-level executive offices. It is primarily a governance question that involves at least four important considerations. First, it requires countries and regions to focus on innovation as the most important driver of long-term economic transformation.

Second, high-level coordination is needed to ensure that all the diverse fields of infrastructure make the acquisition, domestication and local diffusion of technological capacities a key objective in addition to the provision of services.

Third, building local capabilities entails engaging local firms and experts in the stages of project implementation. This engagement helps to provide opportunities for local learning. One way to achieve this is to ensure the involvement of local universities and research institutes in infrastructure projects.

Finally, many of the procurement practices used around the world tend to focus on lowering the initial cost of project design and construction. Activities that involve building local capabilities tend to be excluded from the initial pricing and bidding practices. Smart procurement practices should incorporate the importance of technological factors from the outset. African countries lack this experience, but they can learn from their Asian counterparts that focus on technological learning as a critical element of project design and implementation.

Africa’s vision to become a dynamic and entrepreneurial region driven by innovation is within reach. Africa is right to keep its eyes focused on the frontiers of technological advancement. But its current infrastructure investments might be its Cinderella of innovation. 

Written By
Calestous Juma

Dr. Calestous Juma was a professor at Harvard Kennedy School specialising in technological innovation and entrepreneurship for development. He was a regular contributor to the New African Magazine and at one point wrote this column - Africa Innovates. on 15 December 2017, Africa lost true intellectual giant. Rest in Peace.

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