No 2023/9 Seeking for the shift towards challenge-oriented innovation policies

Tracing digitalization policies over two decades in Africa

Abstract

The current innovation-policy discourse suggests a shift towards challenge-orientation and calls for a whole of government approach to tackle grand societal challenges such as climate change, inequality, and poverty. We seek for such a shift in two countries highly exposed to these challenges, South Africa and Rwanda, and in relation to digitalization policies, which hold strong transformative potential. To do so, we develop an analytical framework, which differentiates between policy goals (intended economic, social, or environmental outcomes) and policy rationales (technology-push, system building, or transformative change). Our empirical results show little resemblance to the temporality assumed in the literature, namely that policy goals and policy rationales should shift towards challenge-orientation and transformation over time. In contrast, we find that the policies relevant for the digital transformation have been challenge-driven from the beginning addressing besides economic growth also inclusivity and poverty reduction. Also, we find a potentially generalizable pattern in transformation processes, embarking from system building, then focusing on developing products, processes, and business models, and finally specializing the instruments to address specific shortcomings. The findings complement and contrast existing studies often centered on the Global North and often covering a narrower set of innovation policies.