ABSTRACT

Do Services Matter for African Economic Development?
An Empirical Exploration

CRIC Discussion Paper No. 49

Dr Mark Tomlinson & Dr Tidings Ndhlovu

This paper seeks to examine the extent to which non-industrial factors such as information and knowledge infrastructures and specific types of service sector activity can enhance economic development. Following a discussion about recent debates on knowledge intensive business services (KIBS) and industrial cluster approaches to innovation and how they can enhance understanding of the learning economy, data are analysed from a variety of sub-Saharan African countries in this context. The paper uses some statistical techniques to explore the impact of knowledge infrastructures and knowledge intensive services on performance. It will be argued that observing and maintaining traditional distinctions between manufacturing and services is no longer a useful way to approach economic problems of growth, innovation, competition or productivity and that a systemic approach is necessary to understand developments in the African context. Several hypotheses are tested within the framework proposed using data from 1998 for the whole of sub-Saharan Africa and using input-output data for several years from South Africa.

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