Ethiopia faces some serious problems and inherent tensions linked to the sustainable use of natural resources, and is confronted with the sustainability challenge of reconciling economic, social and environmental priorities. This chapter describes the nexuses between water, energy, population, land use, agriculture and other economic activities, and discusses tensions for the sustainable use of natural resources (e.g. dams constructed for hydroelectricity generation, irrigation schemes for energy crops such as sugar cane, and flowers or coffee cashcrops are seen by some stakeholders to compete directly with their traditional water use in agricultural, fishing and pastoralist subsistence practices).

To solve sustainable development problems, research and innovation, as well as cooperation and governance, have to be understood as drivers for economic development and environmental and societal well-being. The Ethiopian context provides the tools to explore the collective nature of innovation as a co-evolutionary process that results from the alignment of technical, social, political, institutional and organizational dimensions, especially when it comes to the sustainability agenda. Therefore, this chapter develops insights about the complexity of the sustainability challenge and the innovation process in Ethiopia, and outlines ways of coping with the inherent tensions across the social, economic and environmental dimensions via institutional support, governance, research, network and knowledge brokering, capacity-building and demand articulation.

The revised National Science, Technology and Innovation (STI) Policy of Ethiopia has been operational since 2010 and cites innovation as the key process by which Ethiopia can build competitiveness and become a middle-income country by 2025. The STI policy emphasizes that ‘the integration and cooperation among various stakeholders will be of paramount importance to realize the policy’s objectives’. Thus, this chapter examines Ethiopian STI and other policies affecting sustainability; it describes how sustainability science is understood in the country, including how the engagement of multiple stakeholders is shaping innovation and its associated processes; and it presents examples of systems, services and business models that are innovative in their approach to promoting sustainable social and economic improvements.