Nature's safecrackers: Decoding substitutability and protecting natural capital in innovation ecosystems SSA and MENA regions

Abstract

The innovation ecosystems in economies dependent on natural resources use these assets as fundamental capital to promote development and economic growth. Ensuring the lasting sustainability of these economies represents a difficult challenge, especially in a context of limited and irreplaceable natural capital. This study explores indicators of natural capital protection (environmental quality, reduction of greenhouse gas emissions, protection of biodiversity and ecosystems, and cultural and social values) in Sub-Saharan Africa (SSA), the Middle East, and North Africa (MENA), two regions dependent on natural resources. A new panel quantile estimation technique is applied to panel data covering 59 countries from 2019 to 2023. The results indicate that, in SSA economies, lower levels of these indicators contribute positively to higher levels of natural capital protection. In the MENA economies, only higher levels of environmental quality and cultural and social values contribute positively to higher levels of natural capital protection. The critical implications arising from this study emphasize the urgent need to implement strategies aimed at safeguarding natural capital in economies heavily dependent on it. These strategies include resilient urban development, investment in climate resilient infrastructure. The strategies include resilient urban development, investment in climate-resilient infrastructure, recognition and valorization of environmental services, attention to modern renewable energy technologies, environmental education, greater consideration of the balance between environmental sustainability and human well-being by governments, and recognition of the impacts of globalization on environmental sustainability and human development. The uniqueness of this study lies in its pioneering approach to the pressing issues of protecting natural capital in natural resource-dependent economies. It is a pioneer in analyzing several countries in two regions regarding synergies between protecting natural capital and its indicators in economies dependent on natural resources.