Monday, 15 June 2015

High rates of R&D in Congolese companies

The Great Lakes region has a much lower income per person than the richest countries in the world, and the use of expensive production equipment is correspondingly less.  There's an argument that companies in the region don't have to do much research and development, because they can just adopt foreign equipment.

However, adopting foreign equipment is much easier if someone already understands the basics of the technology.  The new user can understand its advantages and limitations, and what sort of things have to be done to get it to work.  The details have to be filled in, but the big picture is already there.  Moreover, foreign equipment may need to be adjusted to be suitable for local markets.  For both of these reasons, Great Lakes companies may choose to undertake R&D.

Recent DRC data indicates that many Congolese companies worked on new product development over the period 2011-2013.  A third did formal R&D, while four in ten allowed employees time to develop new ideas.

Table: Percentage of companies introducing innovations over 2011-2013, split by whether companies did formal R&D 

The process seems to have yielded results, as the table shows.  For example, of companies undertaking formal R&D, almost three quarters introduced a new product.   Of companies without formal R&D, the rate of innovation was just over a third.  For process and strategic innovations, the gap is even larger.

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