The Effects of Digitalization on Entrepreneurial Innovation in Sub-Saharan Africa

The objective of this study is to show the effects of digitalization on the innovative capability of companies in Sub-Saharan Africa. To meet this objective, the authors used the World Bank data (Enterprise Survey) on survey of service companies and manufacturing industries in 2016. Making use of a binary probit model and a recursive bivariate probit model, they found that digitization has a significant effect on business innovation in Sub-Saharan Africa. Specifically, they found that when a company has a website, its probability of introducing an innovation in to the market increases by 27% as compared to companies without a website. However, when a company has its own website, the probability to introduce an incremental innovation is 0.34 higher than radical innovation. Thus, they can recommend to entrepreneurs in Sub-Saharan Africa to invest not only in the digitalization of their companies but also and above all in research and development, which is a translational and inevitable determinant for radical innovation.