How Do Technological Innovations and Urbanization Affect Inclusive Growth in Sub-Saharan Africa?

Embarking from the pioneer authors like Schumpeter, Nelson and Winter, and Penrose, innovation is postulated to be the main driver for robust economic growth. However, given the fact that almost the half of world’s population live in town, the importance of urbanization in the relation between technological innovation and inclusive growth are ignored. Accordingly, this paper attempts to fill this gap in the literature by examining how does technological innovation and urbanisation affect inclusive growth, using the endogenous growth model. Based on a panel of 37 African countries over the period 2008–2019, and using robust estimation techniques, we discover very attention-grabbing findings that highlight the impact of technological innovation on inclusive growth in Sub-Saharan Africa countries. First, we find that technological innovations positively and significantly influence inclusive growth in the sample countries. The results survive several robustness tests. Then, our study provide empirical evidence that for technological innovations to influence inclusive growth by 0.5387 percentage points, the urbanization rate must be greater than or equal to the threshold 74.795. Our study confirms that urbanization accelerates the impact of technological innovation on inclusive growth. Therefore, a better construction of resilient infrastructures (health, education, road, ITC, etc.), human capital and higher urban planification are vital to promote economic robust and inclusive economic growth.