Governments of COMESA Member States ought to increase public expenditure on research and development to boost innovation and hence trade and also put in place favorable policy through proper institutional framework.
According to a research conducted recently by two researchers on the relationship between innovation and trade growth, there is a strong linkage between the two factors to necessitate support towards promoting the drivers of innovation.
“Innovation plays a significant role in enhancing competitiveness which in turn promotes trade between nations,” according to the research conducted by Rodgers Wanyonyi of the Department of Economics, Moi University and Hellen Chemnyongoi of the Department of Applied Economics at the Kenyatta University in Kenya.
The researchers also sought to establish the main factors that can drive innovation, determine the relationship between high technology exports and trade, and the relationship between publications of science and technical journals and COMESA trade.
In their research paper titled ‘Innovation and Trade within COMESA’ the researchers established that innovation was driven by government policy, industry characteristics, firm characteristics as well as international factors. The paper was presented last month at the 6th COMESA Annual Research Forum, which took place in Nairobi.
In the COMESA region, the study found that expenditure on Research and Development (R&D)as a percentage of GDP was low.
“Available data from World Bank Group (2018) showed that none of the Member States has achieved the proposed share of R & D expenditure of one percent share of Gross Domestic Product (GDP),” they noted.
Among the 21 Member States, Egypt and Tunisia comes close to the 1 percent target with R&D expenditure of 0.71 percent and 0.60 percent of GDP respectively in 2016.
At industry level, external environmental factors such as the level of uncertainty, dynamism or competition in the business environment as well as demographic factors also affect innovation.
“Challenges such as financial constraints, lack of information, knowledge infrastructure, weak inter-firm linkages and regulatory burdens may hamper innovation,” they noted.
The study recommended that COMESA Member States institutes a proper intellectual property rights regime, increase budgetary allocation to R&D, promote innovations by recognizing and rewarding innovators, support the general business environment by reducing bottlenecks such as corruption and support universities and Technical and Vocational Education and Training institutions in science and technology training.
At the regional level, COMESA has taken various policy decisions to facilitate and encourage individuals and firms to use their energy and potential in science and technology to solve the continents economic challenges.
In 2014, COMESA launched the innovation awards scheme to recognize and celebrate individuals and institutions that have used Science, Technology and Innovation (STI) to further the regional integration agenda. Some of the winners of the award have since established highly successful companies thus underlining the need to promote innovators.
Other recommendations made by the researchers are: to encourage competitive markets as opposed to monopolies to foster innovation; domestic economies to be open to learn from other economies across the world; COMESA countries to increase exports of high technology products and promote research in science and technology to increase the number of publications in scientific and technical journals in order to enhance trade.