Capability Accumulation and the Persistence of SDG Innovation Performance in Sub-Saharan Africa

Abstract

The disproportionate and weak performance of innovation in Sub-Saharan Africa begs a basic inquiry as to the forces of sustainable development: is it external integration that drives sustainable SDG-related innovation or the accumulation of domestic potentials? This paper discusses the contribution of the accumulation of capabilities toward explaining why SDG-oriented innovation performance is persistent and uneven among 43 Sub-Saharan African states during 2005-2023. A composite SDG innovation index is constructed from indicators of knowledge creation, technological adaptation, and sustainable development outcomes, capturing the capacity of economies to generate, diffuse, and apply innovation in support of SDG transformation. Empirical strategy is a combination of fixed-effects estimation, instrumental variable methods, Common Correlated Effects Mean Group estimation in order to overcome cross-sectional dependence, quantile regression in order to identify structural heterogeneity, and a dynamic System GMM model in order to test path dependence. The findings indicate that home capabilities are the most predictable factors of innovation performance, and the influence of trade and globalisation is not significant when country-specific heterogeneity and regional spillovers are taken into consideration. The dynamic estimates indicate that the persistence of SDG innovation is very high which means that the present performance is greatly influenced by the previous ability accumulation. The outcomes of quantile regression are another indication that knowledge-based capabilities yield their greatest growth influences in the case of low-performing economies, arguing that long-term investment in absorptive capacity may be a source of convergence-promoting influence.