Enhancing information technology for value added across economic sectors in Sub-Saharan Africa✰
Introduction
The premise of this research on enhancing information technology for value added across economic sectors in Sub-Saharan Africa (hence SSA) is motivated by two relevant factors in the scholarly and policy-making arenas, notably: the contemporary relevance of information and communication technology (hence ICT) in outcomes of economic development and gaps in the extant contemporary literature. The research expands the two factors in turn.
First, while ICT has been in existence in contemporary times and has also been a crucial element of economic systems, changes over the last decade have been quite significant in increasing value added across economic sectors through inter alia: diminishing the cost of production, enhancing output, boosting competitiveness, ameliorating public sector management and improving capacities of production (Chadwick, 2005) as well as boosting innovation (Oliva et al., 2019), knowledge exchange (Singh et al., 2019) and knowledge management (Al Ahbabi, Singh, Balasubramanian and Gaur, 2019) that are relevant in both public sector and private sector performances. ICT's relevance in improving economic development in developing countries is consistent with evidence in SSA, as documented in contemporary economic development literature (Tchamyou, 2017; Asongu and Nwachukwu, 2018; Abor et al., 2018; Issahaku, Abu and Nkegbe, 2018; Minkoua Nzie, Bidogeza and Ngum, 2018; Gosavi, 2018; Asongu and Odhiambo, 2019a; Efobi, Tanankem and Asongu, 2018). The comparative importance of ICT in SSA relative to other regions of the world builds on the evidence that compared to other regions of the world, SSA is the region with the least penetration in ICT and the most potential for ICT penetration (Penard et al., 2012; Asongu, 2013; Afutu-Kotey et al., 2017; Asongu and Boateng, 2018; Humbani and Wiese, 2018; Gosavi, 2018; Asongu and Odhiambo, 2019b). The present study which is positioned on extending this strand of literature is also motivated by, to the best of our knowledge, the absence of a study that has focused on how increasing ICT penetration affects value added across sectors in SSA.
Second, the attendant literature on value chains in Sub-Saharan Africa has fundamentally focused on: (i) smallholder farming and the agricultural sector (Lutz and Olthaar, 2017). Within this framework: Van Rijsbergen, Elbers, Ruben and Njuguna (2016) are concerned with the effect of coffee certification on the welfare of farmers in Kenya; Lutz and Tadesse (2017) focus on inclusiveness versus competitiveness in African farmers’ market organisation and global value chains; Olthaar and Noseleit (2017) examine a comparative analysis of farmer cooperatives to non-members in SSA; Metzlar (2017) investigates the strategic position and intents of smallholder farmers in the Ghanaian cocoa industry while Vermeire et al. (2017) are concerned with global value added in Africa and development avenues for poor landowners. (ii) As it relates to the manufacturing sector: Ruben et al. (2017) investigate quality upgrading and value added in the diary sector of Ethiopia; trade-oriented regional value added in SSA within the framework of the Leather sector is also examined by Banga et al. (2015) while Van Lakerveld and Van Tulder (2017) focus on the transition management of sustainable supply chain practices in the light of leading Dutch corporations in SSA. (iii) Studies on value added in the service sector are sparse. In this category, Beerepoot and Keijser (2015) have focused on outsourcing of the service sector as a determinant of economic development with evidence on ICT from Ghana. The purpose of this research is to complement this attendant literature by assessing how improving ICT affects value creation/added in the three main economic sectors, namely: agricultural, manufacturing and service sectors.
To increase the policy relevance of the study, forecasted thresholds for technology spillovers are also provided. This focus of the study departs from contemporary technological spillovers and forecasting literature which has largely been concerned with inter alia: challenges in forecasting business prospects (Amankwah-Amoah, 2016; Amankwah-Amoah and Sarpong, 2016, 2018); the impact of technological spillovers for small and medium sized corporations (Del Giudice, Scuotto, Garcia-Perez and Petruzzelli, 2019); the importance of inter-sectoral knowledge spillovers in technology-related innovation (Stephan et al., 2019); learning technology and diffusion at local and global spheres (Zhang et al., 2020); technology spillovers from trade and patent markers (Cai et al., 2020); the influence of knowledge spillovers in sustainable energy production (Miremadi et al., 2019) and enhancing information technology for inclusive development (Asongu and le Roux, 2017) and environmental sustainability (Asongu et al., 2018). The focus of this study is closest to the last strand of technological forecasting and social change literature because it aims to assess how enhancing information technology affects value added across various economic sectors. The focus of the study also departs from the attendant strand of literature by going beyond establishing nexuses between information technology and macroeconomic outcomes, to providing or forecasting information technology policy thresholds needed for a favourable influence on value added across various economic sectors.
The theoretical underpinning supporting the importance of ICT in value added across economic sectors is consistent with neoclassical economic development models (Kwan and Chiu, 2015; Asongu and Odhiambo, 2018). Accordingly, neoclassical foundations of economic development maintain that information technonolgy is imperative for economic development in developing countries (Abramowitz, 1986; Bernard and Jones, 1996; Asongu et al., 2018). The theoretical fundamentals have motivated a recent strand of literature on the importance of ICT in promoting economic prosperity when nations are at the beginning levels of industrial development (Muthinja and Chipeta, 2018; Bongomin et al., 2018; Uduji and Okolo-Obasi, 2018a; 2018b; Asongu et al., 2019; 2019).
The rest of the research is organised in the following manner. Section 2 provides insights into theoretical underpinnings and forecasting of technological spillovers. Section 3 discusses the data and methodology while the empirical findings and corresponding discussion are disclosed in Section 4. The research ends in Section 5 with a concluding section that recapitulates the forgoing, before suggesting future research directions.
Section snippets
Technology accumulation and forecasting technological spillovers
Innovation and information technology are important drivers of value creation in the competitiveness and performance of nations and corporations (Acharya et al., 2018; Gupta et al., 2018; Nair et al., 2019; Nguyen et al., 2019). In the light of contemporary information technology spillover literature (Asongu and Acha-Anyi, 2020), the theoretical basis for the linkage underlying information technology and macroeconomic outcomes (such as value added across various economic sectors as it is the
Data
Consistent with the motivation of the study, the focus of this research is on 25 countries in SSA using data from various sources spanning the period 1980–2014.1 The geographical and
Presentation of results
The empirical findings are reported in Table 1, Table 2, Table 3 in this section. In essence, Table 1, Table 2, Table 3 respectively focus on linkages between “ICT and value added in the agricultural sector”, “ICT and value added in the manufacturing sector” and “ICT and value added in the service sector”. Each table is characterized by two main specifications pertaining to “mobile phone”-oriented and internet-related specifications in the left-hand and right-hand side respectively. Each
Concluding implications and future research directions
This study investigates how enhancing ICT affects value added across sectors in 25 countries in SSA using data for the period 1980–2014. Three value added indicators are used, namely: value added in the agricultural sector; value added in the manufacturing sector and value added in the service sector. The engaged ICT indicators include: mobile phone penetration and internet penetration. The empirical evidence is based on Generalised Method of Moments. The following findings are established.
Declaration of Competing Interest
The authors have no conflict of interest.
Prof. Simplice Asongu holds a PhD from Oxford Brookes University and is currently the Lead Economist and Director of the African Governance and Development Institute (Yaoundé, Cameroon). He is also a: Senior Research Fellow at the Africa Growth Institute (Cape Town, South Africa); PhD Supervisor at Covenant University (Ota, Nigeria), the University of Ghana (Accra, Ghana) and Midlands State University (Gweru, Zimbabwe); DBA Supervisor at Management College of Southern Africa (Durban, South
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Prof. Simplice Asongu holds a PhD from Oxford Brookes University and is currently the Lead Economist and Director of the African Governance and Development Institute (Yaoundé, Cameroon). He is also a: Senior Research Fellow at the Africa Growth Institute (Cape Town, South Africa); PhD Supervisor at Covenant University (Ota, Nigeria), the University of Ghana (Accra, Ghana) and Midlands State University (Gweru, Zimbabwe); DBA Supervisor at Management College of Southern Africa (Durban, South Africa) and Research Associate at the University of South Africa (Pretoria, South Africa), University of Buea (Buea, Cameroon) and Oxford Brookes University (Oxford, UK). He is also Associate Editor in some journals including the Journal of Economic Surveys, the Journal of African Business and the International Journal of Education Economics and Development.
Dr. Mushfiqur Rahman is a Lecturer of Business and Management at University of Wales Trinity Saint David, United Kingdom. After completing his Bachelor of Commerce degree, Dr. Rahman obtained an MBA degree and later on another MSc degree in Human Resource Management and Employment Relations. He earned his PhD in Electronic Human Resources Management (e-HRM) at Brunel Business School, Brunel University London. Afterwards, he also successfully passed a program on academic writing and reading at the University of Oxford, United Kingdom. He has experience working in leadership positions in corporate fields for many years before venturing into the academics. He has also worked on several projects which have allowed him to become well experienced in preparing HR budgets and investment. His-research area is HRM, E-HRM, and Leadership. Recently, he published articles in high ranked refereed journals such as International Journal of Human Resource Management, Production, planning & Control and Journal of Business Ethics.
Prof. Joseph Nnanna currently serves as the chief economist of the Development Bank of Nigeria (DBN) PLC. A seasoned professional with numerous years of experience in the U.S mortgage, banking, manufacturing, and telecommunication industry before joining academia. Prior to joining DBN, Nnanna was a tenured professor of business and economics at Northwestern Oklahoma State University. His-scholarly works have been published in the DBN Journal of Economics and Sustainable Growth, Foreign Trade Review, and International Journal of Business Economics and Management, among others. Nnanna's areas of research are development finance, macroeconomics, and trade, respectively. He is a member of the American Economic Association.
Dr. Mohamed Haffar is the programme leader for the MSc & BSc Human Resource Management at the University of Bradford School of Management. He previously held a lecturer position at Bournemouth University. Mohamed's research interests centre on issues of HRM, Organisational Behaviour, Change Management and TQM. His-work has appeared in International Journal of Production Economics, Journal of Organisational Change Management, Journal of TQM and Business Excellence, Journal of Enterprise Information Management, among others.
✰Acknowledgement
The authors are indebted to the editor and reviewers for constructive comments.