According to the World Bank, knowledge economies have four pillars: institutional regimes that provide incentives for the use of knowledge and entrepreneurship; skilled labour and strong education systems; accessible ICT infrastructure; and an innovation system including universities, the private sector and other organisations.

Based on these standards, all countries that are part of the Organisation for Economic Co-operation and Development (OECD) are becoming knowledge economies. But despite its recent impressive economic growth, Africa is trailing behind. 

On the World Bank’s Knowledge Economic Index, the continent’s score is a third of North America’s and half of East Asia and the Pacific’s rankings. A central challenge is a lack of appropriate skills, and the need to rely on expensive expatriate labour. In fact, 90 percent of CEOs in Africa are highly concerned about the low availability of key competences on the continent .

In addition, while scientific research output has more than doubled in sub-Saharan Africa between 2003 and 2012, there has not been the same increase in registered innovation. Sadly, no African countries featured in the top 20 countries for patent applications in 2013, according to the World Intellectual Property Organisation.

Moreover, the World Bank has cut its forecast for economic growth in sub-Saharan Africa to 4 percent this year, citing plunging commodity prices as the main reason for the slowdown. It has never been more important for African countries to take decisive action so that they can truly compete in the global knowledge economy.

As the biggest source of job creation, private sector companies can and should help African countries make the transition to becoming dynamic knowledge economies. First, for-profit businesses can help ensure that the continent’s ambitious young population has appropriate skills for the workplace.

For example, they can help fill the much documented skills gap by partnering with local universities to improve the quality of science, technology, engineering and maths (STEM) curricula. Businesses could help cash-strapped faculties design courses that equip graduates with both a deep understanding of science and technology, as well as practical workplace skills.

Companies can also provide young scientists and researchers with the financial resources they need to pursue postgraduate research in African universities. US tech giant, IBM, is doing this with its IBM-Research lab in Kenya, which has established a new resident scientist programme for schools in Kenya and other African countries.

The applicants are leading scientists and researchers from pre- and post-doctoral backgrounds, as well as from academia, government, or industry, and work with IBM researchers in the physical lab environment.

Programmes such as these are beneficial for all stakeholders: businesses gain access to a pipeline of work-ready local talent and enhance their reputations in an increasingly important market. At the same time, African students can gain much needed high level scientific and technical competences, which can also help them create solutions to the continent’s biggest development challenges.

The World Bank also argues that knowledge economies must provide incentives for nurturing entrepreneurship. Again, considering the enormous resources at their disposal, big businesses are well equipped to foster entrepreneurialism on the continent.

Company executives could provide mentoring and other assistance to dynamic, young Africans who are keen to start their own businesses. They can also play a guiding role in the tech hubs that are sparking some of the most exciting innovations to emerge in the region.

Additionally, private sector companies can help young entrepreneurs protect their creations from exploitation by helping raise awareness of IP rights legislation, something Microsoft’s 4Afrika Initiative is doing through the 4Afrika IP hub. This can help build local human and technical capital, a long-term enabler of economic growth, and boost innovation.

Finally, and perhaps most importantly, we must ensure that burgeoning African knowledge economies reach the grassroots, as Senegalese-born tech entrepreneur Mariéme Jamme noted at a roundtable discussion the Planet Earth Institute and SciDev.Net held on April 24. In her opinion, public libraries are a great way of doing this, as they provide free access to information, but they lack adequate funding.

As part of their continuing investment into the continent, Planet Earth Institute would also call on both local African and international private sector companies to provide this financial assistance.

Additionally, we must all work together to build a ‘reading culture’ that Professor Joyce Kikafunda, Ugandan High Commissioner to the UK, has argued that our countries desperately need. Boosting public libraries can help us get there.

The transition to more knowledge-based economies offers great benefits for the private sector. Alongside better-educated and trained workforces, supporting innovation and the development of emerging industries can also mean subsequent growth in key sectors such as venture capital or private equity.

Ultimately, the knowledge economy is an opportunity, not a threat for businesses in Africa, and they need to embrace and support it.