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Paper short abstract:

I aim to present a method combining absorptive capacity and economic complexity theory to identify industrial technologies African countries can adopt for green energy transition, focusing on lithium-ion battery supply chains and technology transfer strategies.

Paper long abstract:

This study identifies industrial technologies best suited for transfer to African countries to support their green energy transition. By integrating the concept of absorptive capacity with economic complexity theory, a novel method is developed to evaluate a country's ability to assimilate and commercially apply new technologies. This approach constructs networks of technological knowledge based on co-production patterns in trade and patent data, enabling the measurement of a country's density within these networks. This density reflects the country's existing relevant knowledge, providing a quantitative measure of its absorptive capacity.

The method is empirically validated using country and year fixed effects applied to trade data from 1996 to 2022, demonstrating that countries with higher product-specific density are more likely to successfully produce those goods. Furthermore, newly produced goods with links to a broader network of potential products contribute significantly to economic development.

Focusing on the lithium-ion battery supply chain, this method assesses the absorptive capacity of African countries for 31 key products across 693 related product networks. The analysis identifies products with the highest potential for driving GDP growth. The findings offer actionable insights for industrial policies, guiding African nations to prioritize manufacturing sectors capable of upgrading their roles within the lithium-ion battery supply chain through technology transfer. This approach emphasizes the importance of moving beyond reliance on critical mineral exports to foster effective energy transitions and sustainable economic development.