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In this paper, we propose that historically generated institutions and persistent pattern of human capital formation conditions the emergent systems of innovation in Africa. These effectively determine the development trajectory of the region. We advance the notion of dynamic and non-dynamic systems of innovation, the latter describing the African condition. In doing this, we combine the strand of literature on institutions and their persistence in shaping industrialisation with the literature on evolutionary theory and systems of innovation. We provide evidence of the colonial origins of skewed schooling enrolment, at variance with the industrialisation and wealth creation objective of modern economies. Employing simple statistical tests, the persistence of initial human capital (school enrolment) reflects in the significant correlation among the three levels of schooling enrolments, and correlation of enrolment in 1970 with per capital income in 2000, a periodicity of some three decades. This outcome is consistent with the literature on countries at early stages of development. Path-dependency is partially proved by the human capital variables even though we did not attempt to investigate all variables making up the system of innovation. Our findings suggest that Africa's present underdeveloped system of innovation in part has its roots in both the past and present poor pattern of human capital formation. This is a first tentative attempt to explore long-run development in Africa within the systems of innovation framework

Since the last decade, governments in less-developed countries have increasingly viewed Foreign Direct Investment (FDI), as directed by the multinational enterprise (MNE), as a catalyst for economic growth and transformation. Indeed, the literature argues that FDI-assisted development occurs when a less-developed country assimilates, adapts and diffuses the positive externalities arising from the interaction of the MNE's ownership advantages with its locational attributes (e.g., Dunning 1981, 1988). This paper, however, posits that FDI-facilitated development is not an effortless process. It only occurs when host developing-country governments implements selective intervention policies that are aimed at increasing indigenous technological capabilities (e.g., Lall 1996, 1997). This paper explores this issue by examining the experience of Trinidad and Tobago, a recipient of substantial FDI inflows in its natural gas industry for the last decade. This paper clearly shows that FDI-assisted development only occurs when governments in less-developed economies pursue credible, selective intervention policies

Foreign Direct Investment (FDI) is playing an increasingly important role in\ud the economies of many less industrialised countries. The Caribbean, specifically\ud Jamaica, Barbados and Trinidad-Tobago are excellent examples of this phenomenon.\ud The increased dependence of these countries on FDI calls to question the\ud attractiveness of their business environment to the foreign investor. This study aims to\ud provide answers to this research question. To this end, it examines the factors that\ud influence the motivations, locational choices and market entry mode of multinational\ud enterprises making investment in these three countries. This study also seeks to\ud ascertain the extent to which these factors are influenced by the timing of the\ud investment decision, the type of FDI (market-seeking, resource-seeking and export-seeking)\ud and the country of origin of the investor. It is also concerned with the factors\ud that influence the initial investment decision as well as the decision to continue\ud operations in the countries.\ud Fourteen hypotheses were advanced from the International Business literature.\ud A triangulation approach to research methodology was employed in the study. The\ud hypotheses were initially tested by means of a mailed questionnaire survey which was\ud administered to 299 executives of multinational enterprises that operate in the three\ud Caribbean countries. The hypotheses were further tested using the qualitative method\ud of a case study approach. Twelve core cases of multinational enterprises operating in\ud the export sectors of the three Caribbean countries were analysed.\ud This study demonstrated the non-applicability of several of the FDI theories to\ud the realities of small, developing economies. These theories were developed largely to\ud explain the behaviour of firms originating in industrialised countries and making\ud investments in these countries. Hence, several did not seem to fully explain the FDI\ud process undertaken in the Caribbean. One notable exception was that of the "Double\ud Diamond" model. The study showed that the "Double Diamond" model is a powerful\ud framework for analysing the business environments of the three Caribbean countries\ud studied.\ud This study also illustrated the importance of government implementing\ud strategies to ensure that the business environment is supportive of the foreign investor.\ud Further, the study suggests that investments need to be made in human resource\ud development, and institutional and infrastructural improvements. It also revealed that\ud the investment incentive package needs to be revised and a nexus created between the\ud government and the foreign investor. Finally, the study suggests that support needs to\ud be given for the development of the locally owned firm.