Given the small size of many of its economies and having weak capacity in technology, Africa needs to be more effectively integrated in the global trading system in order to take full advantage of larger and more dynamic markets, including technology markets. Developing countries that have integrated effectively into the global economy achieved it through outward and forward oriented as well as market friendly policies. These allow them to benefit from increased competition, foreign investment, technological innovation, cheaper imports, larger export markets and expatriate expertise. Nonetheless, the integration of the least technologically developed countries, of which more than thirty are African, remains problematic in the absence of special assistance.
A special effort must be made to shape technological development for increasing Africa’s participation in the global economy. So far, Africa has not been able to harness its vast natural resources and biodiversity potential, which is currently being challenged by important scientific and technological developments occurring outside the African continent. These advances are rapidly transforming international trade and the way business is done.
Technological innovation chronically disturbs comparative advantages and the rules of the game are rapidly changing. The emerging trends have far-reaching implications for Africa's sustainable development and competitiveness. Global firms are steadily advancing their technological capacity and performance and also progressively raising entry barriers to new entrants. In this process, less efficient producers -such as many African ones- are often squeezed out.
Africa’s competitiveness in its traditional areas of comparative advantage is eroding. This is well documented: the continent’s share of global export trade fell from 5.9% in 1980 to less than 2% at the end of the 1990s, while Sub-Saharan Africa’s market share of global Manufacturing Value Added (MVA) was halved from 0.6% in 1970 to a low 0.3% in the 1990s. Globalization and liberalization compel companies to compete not only in foreign markets, but also in their own national markets. Africa, therefore, needs to act promptly to counter the possibilities of this double - internal and external – squeeze.
The weak scientific and technological capacities of African countries are at the core of the erosion of competitiveness in the continent. Indeed, Africa is almost invisible on the world research map, as it accounts for a tiny fraction of the world's research and development effort. Also, investments in technological acquisition and innovation are extremely low. This impairs the continent’s capacity to utilize and transform its natural resources. It also limits possibilities to forward and backward technological linkages and constrains its capacity to branch out from its traditional exports and exploit its rich biodiversity.
The abundance of natural resources and low-cost labor do not necessarily constitute decisive or comparative advantages for the continent anymore, as the parameters of international competitiveness are greatly based on science and technology. Indeed, the entire technological landscape of the world is witnessing significant transformations, dramatically revealed by the growth of knowledge-intensive as well as high technology products and trade in these products, with substantial research, development inputs and innovation efforts.