Escaping the learning trap

The high technological capability needed to extract and absorb foreign technology coupled with the cost of trying something new and investing in learning are some of the challenges that stop African-owned firms from benefiting from technology transfers that may occur through foreign direct investments. The result is a learning trap where firms with low technological capabilities have fewest incentives to invest in learning and thus remain in low-value activities.

To grapple with these issues, the African Center for Economic Transformation (ACET) conducted a series of interviews among local firms and regulatory agencies in the horticultural and floricultural industries in Kenya to understand how local firms build their capabilities to remain competitive in global value chains. The survey was undertaken from July 26 to August 6, 2016.

The survey forms part of the ‘Getting out of the Learning Trap: African-owned firms building capabilities in global value chains’ (AFRICAP) research project. The AFRICAP project seeks to understand how African-owned firms learn and build their technological capabilities, in order to enter and remain competitive in global value chains. The project will examine African-owned firms in the horticultural and textile export sectors in three different countries, Ethiopia, Kenya and Madagascar.

Dr. Francis Mulangu, Agricultural Economist at ACET, conducted the survey in Kenya.

 

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