Africa can learn much from new US Innovation and Competition Act
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By Kizito Okechukwu
RECENTLY, I watched the US Senate debate the Innovation and Competition Act, which authorises $250 billion (about R3.5 trillion) for basic and advanced technology research over the next five years.
US President Joe Biden lauded the passing of the act, saying that “it is long past time that we invest in American workers and American innovation. We are in a competition to win the 21st century, and the starting gun has gone off. As other countries continue to invest in their own research and development, we cannot risk falling behind.”
Specifically, the act provides $52bn to fund semiconductor research, design and manufacturing initiatives. The act also aims to invest in science, basic research and innovation. Another amendment would add $10bn for Nasa’s lunar landing programme.
Some analysts have dubbed it “the anti-Chinese bill” to counter China’s technological ambitions, as Chinese innovators continue to lead the new global technology revolution.
Today, China arguably has more tech unicorns than the US, positioning the country as the world’s primary innovation powerhouse, and this makes other global leaders fearful and nervous.
Members of the recent G7 meeting in Cornwall, England, decided to work together to counter China’s growing dominance by offering developing nations an infrastructure plan that could rival President Xi Jinping’s multi-trillion dollar Belt and Road initiative.
For me, the key questions are how can Africa learn from China and how can we leverage the Africa Continental Free Trade Agreement (Afcfta) to better position the continent and compete globally?
As economists largely attribute China’s economic growth to large-scale capital investment and rapid productivity growth, Africa is well positioned to leverage its burgeoning youth populace to advance growth and boost economic transformation.
With a population of about 1.2 billion, the continent should aim to industrialise and invest in advanced research and technology innovation. There are also high hopes for the success of the Afcfta, which will boost Africa’s economy significantly through intracontinental trade.
Over the years, investment focus in Africa has shifted dramatically from oil, mining and fossil fuels to human capital and innovation. More global companies are now eager to back young founders in Africa, set up research labs and collaborate to “build back better” with Africa.
Although gains have been made, the Africa Economic Outlook 2020 report by the African Development Bank Group emphasised that the Covid-19 pandemic risks reversing the gains that have been made, and this could see the decline of foreign direct investment. It urged that critical reform policies should be implemented by African leaders. The report also noted that failure to do this could result in about 28 million to 49 million people being pushed into poverty.
Ultimately, the pandemic caught many countries and continents off guard, Africa more so, as it has no vaccination production facilities and health manufacturing capabilities that could help each country’s response. Africa had to rely on Europe, Asia and America for intervention.
The importance of governments addressing structural and reformative bottlenecks cannot be over-emphasised. Whether it’s to combat future shocks, such as the pandemic, or to build more sustainable population-centric economies, Africa can no longer afford to be vulnerable. It must start standing on its own two feet.
Kizito Okechukwu is the executive head of 22 on Sloane, Africa’s largest start-up campus.
*The views expressed here are not necessarily those of IOL or of title sites