Understanding the Drivers of Agricultural Innovation in Ethiopia’s Integrated Agro-Industrial Parks: A Structural Equation Modeling and Qualitative Insights Approach

Ethiopia’s agricultural sector faces several challenges, including low productivity, limited technology adoption, and vulnerability to climate change. Integrated Agro-Industrial Parks (IAIPs) have been designed to address these issues by linking agriculture with industrialization and encouraging the adoption of advanced technologies. However, the role of IAIPs in driving agricultural innovation has not been thoroughly explored. This study employs the Sectoral Innovation Systems (SIS) framework combined with Structural Equation Modeling (PLS-SEM) and qualitative insights to identify the key drivers of agricultural innovation within Ethiopia’s IAIPs. The key drivers analyzed include institutional support, networking, policy frameworks, technology adoption, and gender dynamics. Data were collected from a range of stakeholders, including government agencies, research institutions, agro-businesses, and local communities with direct linkages to two of Ethiopia’s four IAIPs. The findings highlight the crucial role of institutional support and networking in fostering innovation, with government policies significantly influencing technological advancements. Additionally, qualitative insights underscore the potential of circular economy principles—such as waste management and byproduct recycling—towards improving sustainability and economic efficiency within IAIPs. Based on these findings, the study recommends strengthening institutional frameworks, promoting greater stakeholder collaboration, and integrating technological innovations as key strategies for enhancing agricultural innovation. Future research should expand to include a broader range of IAIPs and investigate the long-term effects of innovation systems through both quantitative and qualitative approaches.