Chain upgrading, technology transfer, and legitimacy: The Schumpeterian character of China in the information and communication technology sector in SSA

Abstract

Drawing on technical change and technology transfer theories, we explore the Schumpeterian character of China in the information and communications technology (ICT) value chain in sub-Saharan Africa (SSA). Using data collected from various online sources, including the International Telecommunication Union (ITU) and World Integrated Trade Solutions (WITS) databases, we establish three key findings. First, relative to the traditional Global North sources, China has become a major source of ICT in SSA. Second, over the past two decades, Chinese firms operating in SSA have adopted a Schumpeterian character to gain legitimacy in the communities in which they operate. Third, with the easier transfer of ICT from China, local ICT firms in SSA have upgraded their value chains from only delivering information services to becoming important players in the financial sector, including the provision of mobile money transfer services. We conclude that China's expansive size, coupled with its ability to produce technologies for low-income economies, is likely to ensure that it will remain the dominant source of ICT innovations for SSA.