The effects of innovation on the quantity and quality of jobs: evidence from sub-Saharan Africa

Abstract

ABSTRACT Technological innovation is widely considered a primary source of economic growth and policies to encourage firm-level innovation remain key, even though its impact on employment remains indeterminate. Using the World Bank Enterprise survey on a sample of enterprises across sub-Saharan Africa, specifically Ghana, Kenya and Zambia, this study investigates: first, the effect of innovation on employment; second, the relationship between innovation and quality of employment and lastly, whether the type of innovation is important in isolating the effect of innovation on employment in sub-Saharan Africa. The results indicate that innovation has employment-enhancing effects in the subregion. In addition, novelty in product innovation is a more important source of employment for the firms in sub-Saharan Africa. In terms of innovation and the quality of employment, this study finds that process innovation is associated with a change in the labour composition mix in favour of unskilled workers.