Implementing the Resource Nexus approach: the contribution of internationalising German businesses

The Resource Nexus approach concentrates on a systemic assessment for the sustainable management of natural resources that considers the interlinkages, synergies, and trade-offs between various environmental resources (Bleischwitz et al. 2018). The approach holds a lot of promise for both academia and practitioners (Brouwer et al. 2024). However, implementation of this approach across the globe is severely hampered by two issues: on the one hand there is a striking difference between where relevant technologies¹ are created and where they have the greatest potential impact (c.f. Schneider et al. 2024; Schneider 2024), and on the other hand, our understanding of both the required “economic framework facilitating the implementation of sustainable environmental resources management strategies” (Hülsmann and Ardakanian 2018, 3) and how this is to be implemented in practice are severely limited. Particularly with a wide variety of social and economic settings across the world, the specifics on how to implement a successful Resource Nexus approach at the systemic level will differ significantly between countries. To underline this point, it is interesting to note the different policy recommendations made for similar problems in different localities (such as: Granero de Melo et al. 2020; Hua et al. 2021).

With this background in mind, it is important to return to the central question of which steps are required in order to implement a solution based on the Resource Nexus concept and way of thinking. Areas of activity in which the Resource Nexus has a potential impact are numerous, but the focus here is on the concept’s implementation by businesses, political actors and civil society organisations looking to systemically manage their environmental resources in a sustainable way. It is helpful and relevant to note at this point that the idea itself is not a European one but has international roots and is today worked on across the globe (Brouwer et al. 2024). Implementing this approach is not, in itself, a neo-colonialist exercise. However, some aspects can be perceived as such, which must be critically reflected by all parties.

One of the manifold ways in which the economic situation best suited to the implementation of the Resource Nexus can be supported is through international cooperation (Hülsmann and Ardakanian 2018). International cooperation in this regard can take many forms. Alongside international development cooperation, an often overlooked group of actors in this regard are businesses (Züfle and Schneider 2023a). International business-to-business cooperation can impact the use of a Resource Nexus framework in several ways, including by transferring the relevant and necessary technology, ideas and business practices, by setting best practice examples, and utilising the benefits brought by both sides of the partnership towards sustainable ends (Züfle and Schneider 2023a; Schneider et al. 2024).

Within this thematic area, the geographic scope will by necessity play a significant role. With systemic, behavioural and technological factors all having a strong impact (Madu 1992), it is important to take a precise perspective. Here, the geographic focus is on German technology being transferred to countries in Sub-Saharan Africa. On the one hand, Germany is both the largest economy and the most innovative country in Europe (European Patent Office 2019; The World Bank 2024), making it a central actor when it comes to international business settings. On the other, innovations have great potential within Africa, while limiting the perspective to Sub-Saharan Africa generates a more level field as logistical aspects are more equal (Schneider 2024, 246). This sub-continental perspective follows standard academic practice, but should not be taken to imply the absence of historical ties and a sense of community among peoples on either side of the Sahara (Nugent 2012). This approach is broad enough to allow statements that are valid across this vast and diverse region, covering up to two thousand languages (although the actual number is likely to be around 1440, see: Maho 2004, 289), but still granular enough to allow for pointed advice to policy makers and businesses.

With the goal of better understanding the process by which German businesses cooperate with their Sub-Saharan African counterparts, it is important to narrow down the perspective considerably. Theoretically, following the Uppsala Theory of Internationalisation (Vahlne 2020; Arvidsson and Arvidsson 2019), it should be expected that the activities of one firm will dynamically lead to the creation of networks and thereby greater and more sustained involvement by other companies (see: Johanson and Johanson 2021; Vahlne and Johanson 2020). However, as Schneider (2024) shows, this dynamic is not evident with regards to German businesses operating in Sub-Saharan Africa. This paper will therefore conduct a qualitative analysis, aiming to answer the question what are the major barriers preventing the increased involvement of German businesses in Sub-Saharan African markets?

The remainder of this paper looks specifically at what commonly prevents the establishment of German business partnerships and activities in Sub-Saharan Africa. Towards this end, the next chapter looks at the current literature on these issues, showing current research trends and how the following analysis adds to our understanding. This is followed by the third chapter which expands on the methodology employed and on the gathered data. Chapter 4 then presents the results,, which are discussed in the penultimate chapter 5. The paper closes with a conclusion which involves a summary of the central findings and a critical reflection of the paper.

When considering the nature in which business-to-business partnerships can have an impact on the sustainable development of countries and lead to good outcomes, there are many distinct facets that must be considered. One overview makes the point that an extended definition of technology transfer has an impact on every one of the 17 global Sustainable Development Goals (Züfle and Schneider 2023a), while another study by the same authors showcases the manifold ways in which these transfers take place in practice (Züfle and Schneider 2023b). With humans spending a considerable amount of their time working, the role of economics in achieving sustainable development can hardly be overstated.

When looking at the sustainable management of natural resources in more detail, (Prates et al. forthcoming) argue for the need to incorporate a Resource Nexus approach into the thinking around Sustainable Development. The Resource Nexus approach can be defined as a systemic perspective that considers the interlinkages, trade-offs and synergies between various environmental resources in order to find the overall best management solution (Bleischwitz et al. 2018; Brouwer et al. 2024). A case study on how this comes about is provided by Orou Sannou et al. (in press). Advancing a Resource Nexus approach to the sustainable management of environmental resources has a great impact on individuals and communities, as well as on the natural environment, which in many ways forms the basis for all human activity. However, as has been pointed out in the introduction, it is less clear how this approach can be implemented systematically. We know too little about the required economic and governance frameworks, let alone about how to create these (Hülsmann and Ardakanian 2018). By looking into ways in which business-to-business partnerships can support the implementation of a Resource Nexus approach in Sub-Saharan Africa, this paper works on simultaneously closing several gaps in our understanding of this topic.

In order to better understand ways in which international business cooperation can support the Resource Nexus approach, it is important to take a step back and consider the issues faced by companies looking to operate abroad. One approach is to follow the perspective taken by Schneider et al. (2024). They consider primarily the barriers faced by actors looking to transfer their technology. In the same vein, many barriers exist to the market entry of companies and their attempts to internationalise. The Uppsala Theory of Internationalisation, for instance, pays great attention to the dynamics a company runs through when internationalising (Johanson and Vahlne 1990, 2009). In a perspective that pays particular attention to the role of knowledge and networks, this theory is essential to understanding this process. Owing to the perspective, the Uppsala Theory of Internationalisation, however, offers only a limited perspective on the barriers faced by individual countries. The simplified solution offered by the theory is to expand the network and knowledge capacity. This is, however, too simple, as a specific understanding of individual barriers is essential to a successful partnership.

The academic literature often combines the perspective of barriers to market entry for firms with heuristics and understanding the decision-making processes. This offers great benefits as it shows which barriers have a stronger impact on firms’ behaviour (Guercini and Milanesi 2022). This approach also allows for the formulation of direct and relevant advice, depending on the degree of internationalisation, the product and the market’s integration into global value chains (Pehrsson 2009). A more quantitative perspective by Schneider (2024) shows country-level barriers and their impact on the activities of German businesses in the respective markets. This study calls for qualitative research into the topic, as there are many opportunities and influences at play, not all of which are fully understood. This is in line with other research that aims to understand the push and pull factors that an economy can leverage to attract foreign investment, rather than understanding the investor’s decision-making strategies and behaviour.

When it comes to these barriers, recent literature reviews have identified numerous individual hurdles (Corsi et al. 2020; Corsi et al. 2021). Schneider et al. (2024) use the seminal work by Christian Madu (1992) to classify the barriers as either political, economic, or technological. They also find a surprisingly siloed thinking, particularly around political issues, that requires an integrated approach to be solved. Furthermore, understanding of these issues is hampered by global imbalances in academic foci. As Monga and Lin (2015) show, African economies and economic practices are dramatically understudied when compared to other regions of the world. This imbalance becomes even more pronounced when considering business-to-business partnerships with one or more partners active in a Sub-Saharan African country (Züfle and Schneider 2023a). This paper aims to close the gap somewhat by identifying the most pressing barriers faced by German businesses looking to operate in an African market or looking to cooperate with an African partner. The qualitative approach chosen allows for the identification of individual factors and particularly how they impact business activities, as well as how they can be overcome.

The breadth of sectors, countries, number of partners and size of operation is very diverse among German businesses operating in Sub-Saharan Africa. Data on these activities are also not freely available, limiting access to the respective businesses. In Germany, there exist some umbrella organisations that purport to represent the wider interest of German businesses operating in Africa (most notably the Afrikaverein der Deutschen Wirtschaft, and to a lesser degree the Deutsche Afrikastiftung). In addition, there is the Außenhandelskammer (AHK; German Chambers of Commerce Abroad), the foreign equivalent to the domestic German system of the Industrie- und Handelskammer (IHK; Chambers of Industry and Trade). The IHK is an institution that has a political mandate, but also represents the interests of all “non-craft traders and industrialists of a particular, delimited economic region” (Schulze 1989, 71; see also: Bohley 1953). The AHK, by contrast, is today set up to fulfil the same functions for those businesses operating abroad. However, this international character—in contrast to the national and even regional focus of the IHK system—means that firms cannot be legally required to join. However, the AHK maintains offices across the globe and represents German businesses even in the absence of these offices. Beyond the representation function, the AHK offers various services to those firms looking to expand into foreign markets—from providing market analyses, through the provision of contacts of potential local partners, to supporting delegation visits to discover the target market in person. In addition to this wide array of support features offered by the AHKs, a recent study has explicitly called for more research into the specific ways in which the AHKs operate, as there is a strong and statistically significant impact of the presence of AHK offices and the amount of technology transferred by German businesses (Schneider 2024). This study therefore concentrates on the experiences and perspectives of the AHKs in Africa that specialise in the market entry of German businesses and thereby play a significant role in the internationalisation and, indirectly, the work to bring Resource Nexus solutions into new contexts.

The AHK maintains 9 offices across Sub-Saharan Africa and a head office in Berlin (AHK Deutsche Außenhandelskammern 2024). These offices do not all have the same legal standing, with the AHK differentiating between the full German Chambers of Commerce Abroad and the Delegation of German Industry.² Figure 1, below, shows the presence of AHK offices and the level of responses to the request for an interview.

Data was collected using semi-structured interviews (Adeoye-Olatunde and Olenik 2021; Dearnley 2005). By using open questions and having a dynamic conversation with the respondents, this method allows for a detailed examination of the respondents’ views and experiences. Each interview lasted for about one hour and was transcribed in an anonymised way to ensure the respondents could answer truthfully and openly, in a safe space that allowed for controversial opinions and statements in addition to the interviews, the youngest office in Côte d’Ivoire only opened in 2023 and was unable to meet for an interview. The team in Abidjan did, however, fill in a questionnaire that covered the main questions asked during the interviews. This format did not, however, allow for a full conversation and the more free-flowing reactive nature of the semi-structured interviews (Table 1).

The interviews were held between June 2023 and January 2024 and took place in person (in Accra, Ghana, and Nairobi, Kenya) or through an online videocall. At the time the AHKs were contacted (including the head office in Berlin), there were 7 offices of interest here that could be contacted through the AHK website. Five of these Delegations participated in an interview (the offices in: Accra, Berlin, Dar-es-Salaam, Luanda, Nairobi), while their colleagues in Abidjan participated by filling in a questionnaire. The Delegations in Johannesburg and in Lagos were unavailable. The representations in Zambia and Mozambique were not available to be contacted through the central AHK website at the time. The interviews took place in the German or English language. The transcriptions are kept in the original language, but quotations from them are consistently presented in English in this paper. Where applicable, the translations were conducted by the author. The overall number of interviews conducted is rather small, as a total of 4 African delegations and the head office in Berlin participated. This number represents a positive response rate of 71%. Including the head office and those offices that could not be contacted, the interviews cover 50% of the underlying population. In total, 5 interviews and one written questionnaire was completed. The delegations that were interviewed are widespread and operate in many situations across the continent—with the three main European languages spoken being covered (English, French, and Portuguese, see: Alexander 1999, 1), as are the East, West, and Centre of the continent, as per the UN Statistics Division (2024). This widespread as well as the strong coverage of the overall population strengthens the validity of the results. The results are only related to Sub-Saharan Africa and should not be applied further afield as the situation there is different. From a theoretical standpoint alone, outside of Africa there are more robust and reliable networks which have a strong bearing on the basic premise of this study.

The data analysed here is original. Upon reasonable request, the author can provide access to the anonymised transcriptions. The analysis covered several steps, as outlined in the flowchart in Fig. 2. After conducting the interviews, the recordings were transcribed manually using the MAXQDA software. These transcripts were then anonymised to ensure the promised data protection standards. In order to remain participant-centred and minimise the risk of bias, the data was analysed inductively. This open process led to the identification of first-order categories that aim to stay true to the original data. Through an axial coding procedure, these categories were translated into second-order themes, which, in turn, led to the identification of those issues most important to the research at hand (Corbin and Strauss 2014; Atteslander 2010). These issues are—and will be presented in turn in the next chapter—Politics; a Lack of Knowledge; Culture; and a Lack of Financial Capacity.

Full size image

The appendix contains an overview of all first-order concepts and second-order themes, as well as the frequency with which they were coded. All analytical steps were conducted using the MAXQDA software.

Full size image

The interviews considered a great many aspects a company can be faced with when entering a new market. Four overarching themes emerged that were present in all responses, generally without direction by the interviewer. Each of these themes is presented below in an individual sub-chapter, beginning with Politics, but also covering a Lack of Knowledge, Culture, and Financial Issues. These distinctions are arbitrary and interconnections are clear from both a theoretical standpoint (Schneider et al. 2024) and from the responses. For analytical purposes, however, it is useful to cover these themes independently and to consider the interlinkages in the discussion section that present these findings in front of the wider academic debates.

As chapter 4 has pointed out, there are many potential aspects that have a strong impact on German-African business partnerships. Four of these were highlighted, although the interrelationship between them was also underlined, pointing out the need for a wider perspective looking at the interlinkages between barriers as well (although in a different context, this approach follows the Resource Nexus concept, see: Hülsmann and Ardakanian 2018; Bleischwitz et al. 2018; Prates et al. forthcoming). With this interconnectivity highly evident, it is reminiscent of the multidimensional concept of poverty, which is widely discussed today and in many ways forms the basis for the Agenda 2030 (Pomati and Nandy 2020; Liu et al. 2022; Antoniades et al. 2020; Alkire et al. 2015).

Before discussing the issues that are covered by the interviews and responses, it is also important to note the absence of important topics. For instance, academic research has clearly shown the importance and benefit of gender-sensitive investments and business operations (Lu and Muirow 2021; Bloom et al. 2017). However, this point was not made during any of the interviews. Similarly, differences between countries (e.g. different levels of taxation) were not mentioned or discussed, as the interview partner talked about their country of expertise directly, rather than by way of a comparison with other countries.

It is also interesting to notice that the design of innovations is not consistently seen as an issue. In general, with technological issues being mentioned only once during all the interviews, it is important to note that the major barriers are structural and behavioural—technological aspects can generally be overcome and solved as and when required.

As interviewee #1 argued, there is a notable difference between the “perfect world” that exists on paper, regarding an African country’s policy and regulation, and the “completely crazy jungle” that is actually found by businesses trying to operate in these contexts. This statement is very much in line with the concept of what has been widely discussed as a “gatekeeper state” (Brown 2020). In this concept, a government is either unwilling or unable to actively and systematically generate taxes and rents from the economic activity within its borders. It therefore opts to extract the greatest possible rents from simply controlling those borders, generating taxes on imports, exports and foreign investments. The state thereby does little to regulate the reality for its citizens or the businesses within its territory but controls access to the territory, thereby ‘gatekeeping’ and maintaining some level of control (Cooper 2005). In a similar vein, this observation echoes the work by Acemoglu and Robinson (2013) and North et al. (2009), who argue that institutions are decisive for a country’s prosperity and the profitability of economic activity. Regarding German businesses operating in Sub-Saharan Africa, it becomes clear that a state must do more than just provide good policy on paper—it must move beyond the traditional gatekeeper functions and implement its policy and actively work on improving the situation of the people and businesses in their respective country. As Schneider (2024) identifies, this trustworthiness and reliability of a government to implement its promises and policy is central to attracting German business activity.

From a theoretical perspective, a very significant barrier to German businesses looking to expand their operations in Sub-Saharan Africa, is the lack of networks. Networks form the basis for internationalising businesses, as they are a valuable source of information and raise the value of the firm’s relationships (Holm et al. 1996; Alcácer et al. 2016). However, the lack of longevity in German businesses’ operations in Sub-Saharan African markets makes it hard to believe that such networks exist (or the lack of ‘path dependency’, see: Schneider 2024). This is a significant barrier that was only implicitly mentioned by the respondents. Interview #3 did discuss how the situation before the global COVID-19 pandemic had involved regular networking and socialisation activities hosted and organised by the AHK. Following the various lock-down procedures, however, these had not been restarted. Furthermore, the interviewee stated at various points that they were on the lookout for German businesses operating in the country in order to support connections and networking. Similarly, interview #2 mentioned that the AHK had structures in place that are similar to the IHKs in Germany, although membership in this is not mandatory (see also interview #5). Implicitly, all interviews spoke about this barrier. The problems of finding trustworthy partners, the issue of having to build trust and/or renegotiate deals at later points, the insecurity and lack of knowledge around policy and regulation—while these individual hurdles can be addressed individually, they all result (at least partially) from a lack of reliable networks.

A network would provide a German business looking to expand into an African market with potential contacts, with personnel experienced in working for German companies in the target market, with social contacts for expatriate staff, and with legal suggestions and contacts to reliable local lawyers. Furthermore, the network can provide vital knowledge about the market size, competitors and the advantage of the German business’ product or service. These pieces of information are invaluable to any international business enterprise as it makes planning and organisation more reliable—a central aspect when it comes to the transfer of German innovations to Sub-Saharan African countries (Schneider 2024). The central assumptions stated above are thereby proven—networks are central for any firm’s internationalisation, but for the context of Sub-Saharan Africa there are no noteworthy networks for German businesses to speak of.

The AHK’s work covers many of these aspects—it supports German businesses in identifying the most suitable target markets, it organises a variety of delegation trips for businesses to learn about the country in question and for local businesses to travel to Germany and learn about their business practices in situ. The AHK offers support in navigating red tape that comes up during the market entry process, and in some cases offers social activities for expatriate personnel. While this is not the same as a fully-fledged network, an AHK does fulfil several of the key functions identified as those that are central to a network. This is also the likely reason why so few respondents mentioned the lack of networks as a severe barrier—their daily work is concerned with fulfilling the role and function of the networks (see all interviews and: AHK Deutsche Außenhandelskammern 2024). These activities are initially geared towards solving the issue around the lack of knowledge on the side of the German businesses. It cannot, however, change the perception of the general public. The media must start presenting a more complete and differentiated picture of Africa and the continent’s chances, while policy makers must seriously consider overcoming the Eurocentric perspective often found in school curricula and offer wider education to the public (Khan 2011; Barsch 2024)—as well as showing a greater interest and engagement themselves (as outlines above).

Beyond the barrier resulting from the absence of an extant network, it is interesting to note the interconnected work of the AHK. Their efforts to fulfil the functions of the not-yet-established networks is important, but their work should not stop there. With their unique position, the AHK has a chance to operate in several areas at once—in this way, the chambers step in for the German Gesellschaft für Internationale Zusammenarbeit (GiZ) that has no presence in Angola. Here, they run the H2-diplo project which is designed to support the German government’s goal of supporting countries’ transitions towards a sustainable coverage of their energy needs, primarily through the creation of a hydrogen economy (Baumgarten et al. forthcoming; GiZ 2024; H2-Diplo 2024). In Angola, owing to the AHK’s direct involvement in the project’s implementation, there is a unique opportunity for German businesses. This underscores the value of working outside the regular remit of the AHK and using government funding and initiatives to support the market entry for German businesses.

What is particularly striking with a view to the Resource Nexus, is that this term was never mentioned in the interviews. While apparently not a well-known concept in the world of business partnerships, the AHKs did tend to have topical foci that related directly to aspects around the Nexus. The aforementioned H2-diplo project is a case in point, but generally a focus is widely seen on Renewable Energy and Circular Economy/Waste Management, while the delegation in Accra also spoke about the growing e-sector and e-commerce in particular, with another, growing focus on mining and construction. The AHK-system in Sub-Saharan Africa therefore appears uniquely suited to supporting the transfer of technologies and ideas for implementing a Resource Nexus approach to the sustainable management of natural resources. While at a more general level the AHKs offer support across the board to any German business interested in any sectors, they have a particular focus and expertise that looks to uniquely benefit the implementation of Resource Nexus-related technology. Further research is both required and warranted into why the term and concept is not familiar in the business world, despite it having an apparent practical relevance.

In order to adequately consider this conundrum, qualitative interviews were conducted with various levels of personnel at different AHK-presences throughout Sub-Saharan Africa. While not all offices responded favourably to the interview request, five of the nine presences across the continent were questioned, as was a representative from the head office in Berlin. While this sample size is clearly on the small side, it does cover 60% of the underlying population and is widely dispersed across the Sub-Saharan region. The results and conclusions therefore can be assumed to have validity across Sub-Saharan Africa, but are unlikely to reach far beyond—if only for the increasing density of networks German businesses can rely on in other parts of the world.

It was also underlined how the terms “Nexus” and “Resource Nexus” have an immediate bearing on the work of the AHK and could provide a strong framework for their work, particularly as regards their focus sectors. However, the terminology and the approach itself were not mentioned by any respondents, indicating how unknown they are in the business world. As was indicated, further research is of importance to understand this lack of dissemination of the concept, particularly as it offers so many positive aspects to the sustainable management of environmental resources and thereby to broader development efforts across the region.

As has been touched on in several instances throughout the preceding paper, the German government can improve its support for German businesses. Whether this be through increasing funding to and for the semi-autonomous AHKs, politically supporting German businesses in high-level meetings with their African counterparts or incorporating economic actors into development initiatives—there is a lot of potential German policy makers should take note of and look to implement.

With regards to African governments, there is also a lot they can do to facilitate German businesses coming to and operating in their respective countries. Most directly, they should foster a reputation for trustworthiness and reliability, as this strongly impacts the willingness of German businesses to commit to their domestic markets (Schneider 2024). As a “gatekeeper state” of sorts, they also have strong capacity to control market access and should therefore focus on facilitating firms’ market entries. Improving domestic governance, political stability and reducing corruption also have beneficial impacts but are likely of secondary importance in the actual search for more investments. Another promising solution is for African governments to implement the continental free trade area. As was discussed in the earlier chapters of this paper, there is a lot of untapped potential in this regard. While implementation is progressing, this is a famed “African solution for African problems” that offers a wide range of benefits in many ways and in many regards. Implementing this political plan, that has its roots in the past century (Fosu 1999) would also go a long way to strengthening the perception of trustworthiness and reliability that is central to attracting German businesses and investments.

Businesses themselves must find a tricky balance between being more flexible and open to compromise, open to new cultures and meeting their partners on an equal footing, while also completing their due diligence tasks. Upon successfully commencing their work in the new African market, they should consider networking, collaboration and exchange with other foreign businesses in order to facilitate other firms’ market entries and create a positive and knowledge-filled environment to which German businesses can easily adapt and integrate into.

In summary, the work of the AHK has considerable impact on the success and operations of German businesses looking to work across Sub-Saharan Africa. Despite not being aware of the concept, the Resource Nexus is evident in their work. With a stronger focus on this approach, the AHKs have an important role to play in creating the economic and technological systems that are required to fully implement the Resource Nexus across Sub-Saharan Africa.