Effects of Innovation on Employment in Low-Income Countries: A Mixed-Method Systematic Review

Abstract

We conduct a meta-analysis of the effect-size estimates from 9 empirical studies and a narrative synthesis of the qualitative evidence from 53 qualitative studies on the relationship between innovation and employment in low-income countries (LICs). The meta-analysis reveals a positive but small effect, with evident bias in favour of skilled-labour employment. Both meta-analysis and narrative synthesis findings indicate that innovation's effects on employment in LICs tend to be larger when: (i) the evidence is related to manufacturing as opposed to agriculture; (ii) the analysis is at the firm level as opposed to sector level; and (iii) the evidence relates to South Asian countries as opposed to other world regions. Further findings from the narrative synthesis of the qualitative evidence indicate that the positive effect of innovation on employment is likely to be augmented by strong forward and backward linkages; but the adverse effects are likely to be exacerbated by capital-intensity of imports and weaknesses in governance and labour-market institutions.

An analysis of the potential for achieving the fourth millennium development goal in SSA with domestic resources

“…Ugur and Dasgupta synthesised 115 studies on the effect of corruption on economic growth. In this meta-analysis, they found that a unit increase in the corruption perception index leads to a loss of growth of per capita GDP of 0.59 percentage points [ 12 ]. We use this estimate to calculate the potential growth of per capita GDP achievable in the absence of any perception of corruption using Transparency International’s index.…”

“…We assume that the allocation of government resources does not change and that each sector including the health sector continues to receive the same proportion of funding with the increased availability of resources as corruption and IFF are reduced. This assumption is reasonable given the evidence that reduced corruption, will lead to economic growth [ 12 ] and improved governance results in increased spending on, and provision of, social services include health care services [ 15 ].…”

“…Corruption is defined as the abuse of public office for private gain [ 12 ] and remains a major challenge in Africa as it does in wealthy countries [ 13 ]. The available estimates of losses due to corruption in Africa vary, but the most widely quoted estimate is 25% of GDP per year (about $148 billion) by the African Union [ 14 ].…”

“…Corruption affects child health, and therefore child mortality, by two main channels; the impact on economic growth which will impact household income and the impact on the provision of public services. It has been shown that a unit increase in the corruption perception index leads to a loss of growth of per capita GDP of 0.59 percentage points [ 12 ]. The pathway by which corruption may affect the provision of public services results from the increase in price for these services which reduces the quantity and quality of services available.…”

“…In the absence of state capacity to provide public goods such as water and sanitation, families have to provide these and will be in a better position to do so if their household income allows. It is therefore likely that in countries with low state capacity the direct impact on household income predominates over the impact of the state on service provision and that corruption through its impact on economic growth [ 12 ] has an impact on child mortality predominantly via household income rather than via the services provision pathway.…”