This study investigates the connection between green innovation and industrialization in Ethiopia, a nation committed to low-carbon economic transformation. While existing research emphasizes the importance of innovation for industrial growth and the need for environmentally friendly practices, there's a scarcity of empirical evidence exploring this relationship in developing economies. Focusing on Ethiopia's cement, leather, and textile industries, this paper analyzes sectoral innovation systems through nine semi-structured interviews and a survey of 117 firms. The findings reveal that Ethiopian firms exhibit low levels of product and process innovation, hampered primarily by high technology costs, limited access to finance, and insufficient information. While competitiveness drives innovation efforts, environmental considerations and regulatory compliance are secondary motivators. Crucially, collaboration between firms, government, and other stakeholders appears to promote innovation. The study concludes by recommending enhanced coordination among these actors, the provision of financial incentives for firms, and stricter enforcement of environmental regulations to facilitate green industrialization.
Relevant themes:
Climate action, Environment, Raw materials, Sustainable innovation
Relevant tags: Social innovation, Technological innovation, Sustainability, Eco-innovation, Sustainable materials management, Circular economy, Energy policy
Ethiopia's pursuit of low-carbon industrialization hinges on fostering green innovation. This study examines the innovation systems within the country's cement, leather, and textile sectors, crucial for its economic transformation. Through interviews and a firm-level survey, we reveal low innovation rates, primarily due to financial constraints and limited information. Critically, environmental concerns are secondary to competitiveness as a driver of innovation. Our findings underscore the need for targeted interventions, including enhanced stakeholder coordination, financial incentives, and stronger environmental regulations, to unlock the potential of green innovation for sustainable industrial development in Ethiopia.