Evolutionary economics and LDCs: An African perspective

Evolutionary economists from Joseph Schumpeter onwards have mainly focused on the leading capitalist countries and other highly mature economies. The small set of (mostly Asian) countries that during the last half-century managed to substantially reduce the gap in productivity and income vis a vis the developed part of the world has also received attention. Nevertheless, very little systematic work has been undertaken on the economics of lower-income countries from an evolutionary perspective. This chapter addresses this gap in the literature, with a particular focus on lower-income countries in Africa. First, some central insights from the evolutionary economics literature that potentially may be of high relevance for the task are considered, with a focus on the notion of technological revolutions and, especially, the rapid progress in renewable energy technologies and the so-called digital revolution of the last 10 to 15 years which in interaction may offer great opportunities for transformative change in developing countries. This perspective is then applied on evidence from Kenya and Rwanda, focussing on the impact of recent technological changes as well as the role of policy. It is concluded that evolutionary economics provides us with a suitable set of tools to explore "path-breaking" modalities of development, relying in particular on the transformative power of digital technologies and renewable energies, the importance of a national vision and the institutional framework, but also the changes triggered by the actions of multiple actors and stakeholders. We highlight the central role that governments can play in promoting such changes.