Innovation spillovers in Africa: effectiveness and transmission channels

Abstract

Many African economies continue to face persistent development challenges, including poverty, food insecurity, limited access to education and healthcare, and significant regional disparities. Despite innovation being recognised as a key driver of structural transformation, limited empirical evidence exists on its contribution to inclusive development in Africa, particularly through cross-border spillovers. This study investigates the relationship between innovation and inclusive development across 41 African countries from 2008 to 2020 using both non-spatial and spatial econometric models. Innovation is measured through research and development (R&D) expenditure as a share of GDP based on UNCTAD data. The findings reveal that innovation significantly improves inclusive development domestically while also generating positive spillover effects across neighbouring countries. Foreign direct investment, institutional quality, urbanisation, and ICT penetration further strengthen the regional diffusion of innovation and inclusive development. Robustness checks using the Human Development Index (HDI) confirm the consistency of the results. The study highlights the importance of regional innovation coordination under initiatives such as the African Continental Free Trade Area. Strengthening cross-border ICT infrastructure, harmonising regulations, and improving institutional capacity can enhance innovation spillovers and accelerate inclusive development, contributing to the achievement of SDGs 9 and 10 across Africa.