Local or foreign investment?

This study shows that outsiders (foreign firms in some form of partnership with local firms, or non-indigenous entrepreneurs) have sometimes been instrumental in initiating the process of building up the capabilities that are necessary for improving competitiveness. This occurred where these outsiders were incorporated into the national accumulation process and their capital and know-how were transferred to others.

The case studies revealed an array of relationships between foreign capital and local capital. In some cases foreign investment preceded investment by local firms but the latter developed and gradually took over ownership from foreign-controlled firms. In other cases, foreign firms had been buying out local firms. Foreign investment and other industrialization agents have a role in building technological capabilities. Foreign investment, in particular, could make a contribution to filling some important gaps in the capabilities of African firms.