Europe and the United States contributed to the development of China when they outsourced low-level factory jobs to China. China’s industrialization policy would not have worked if it had not become the manufacturing capital of the world.
For years, African leaders have been plotting a strategy to clone that trajectory, expecting that it could disintermediate the linkage between Europe/USA and China by inserting itself, as an outsourcing hub, as wage rises in China, when compared with Africa.
In this Harvard Business Review article, I posited that it would be a huge mistake if Africa tries to pursue the same strategy which had worked for China. The core of my thesis is that what worked for China has expired since the factory jobs of the future in Europe and the US would be done by robots and AI systems. Consequently, African policymakers must develop a new developmental playbook that takes into realities of the present state of Africa.
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Over the last few years, we have collected enormous data for Tekedia Capital for our investments. Among many options, Africa’s path to development will come by deepening its digital infrastructure around its young people. And once it does that through quality digital education and skill, it can remotely offer services to Europe and North America. In other words, while Europe and the US outsourced factory jobs to China, in the near future, they will outsource “digital jobs” in multifaceted ways to Africa. Yes, we will export digital creatives and remote work to them.
The implication is that young Africans will not need to leave the continent but would earn income remotely, and upon importing the income, many economies would be transformed at scale. If we can educate more into the higher capability skills of AI, Africa will develop and in less than 25 years, we will experience industrialization. Nigerian youth alone can earn 3x Nigeria’s revenue from oil if a national policy on exporting digital skill is enacted and implemented. That policy will rest on top-grade education with digital infrastructure to accelerate our evidential comparative advantages on creativity.
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Comment 1: Well written, Prof! Also, I think that one of the main factors that spurred China’s economic growth was import substitution industrialization, in which they replaced foreign goods with goods manufactured locally. This economic policy encouraged domestic infant companies and made the country less reliant on foreign goods. If this policy could work in China and other places, it definitely will work in Africa.
My Response: China’s local consumption was insignificant to have lifted it. That was not what transformed China. Understand that China was not a member of WTO before the rise. So, it never had a problem of having to replace foreign goods because it imported few. What changed China was when it joined the WTO, it found a way to use its highly educated youth to make things for the world (not to replace imports). China has 99% primary education enrollment (it does not pay attention that much to university education, only 10% attainment. It puts all the good funds in basic education).
Comment 1a: Prof Ndubuisi Ekekwe I agree with you that China’s economy was not driven by consumer spending. However, by implementing ISI, China was, in part, able to become an export-oriented economy. This, in addition to US outsourcing jobs to China and China’s admission into the WTO, as you mentioned, influenced the country’s economic growth.
My Response: The use of the phrase “import substitution” in China could be problematic because China never really imported much. You could write “self reliant” making the case that it produced what it needed without a need for import. That distinction is important.
Comment 2: The solution to ASUU strike is AUTONOMY. Each University should be operated independently with IGR contributing 70% of its revenue and Government contributing 30% grant. The Universities will pay its staff salaries according to its revenue capacities with a cap on the minimum wage a lecturer should be paid.T SA will no longer apply to an autonomous University!
At the end of the year, each University will declare profit or loss and its balance sheet be publicly declared. The EFCC will be called and external auditors invited to scrutinize the accounts.
This way there will never be a national strike again. There can be local problem with a University, but it will be limited to that University and be resolved at that level.
My Response: “The solution to ASUU strike is AUTONOMY” – that is a political decision since that will mean schools not coordinating admissions from JAMB. JAMB needs to conduct the exams as they do with SAT in US, and leave the rest to schools. But politicians will be concerned.
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You just crafted the employment policy portion of the manifesto for our politicians, just with those few lines. But grasping a concept and then going ahead with implementation and subsequent execution is something the capability is still grossly in short supply.
Just like the meaning and use of a word is not univocal but rather manifold, same holds on development. All the facets can accommodate the fears, shortcomings and lack of trust, as long as there’s an established clarity of purpose and sense of direction.
Perhaps we wanted to be the first country to develop by paying so much attention to university education, even when the contents of the said education are never domesticated, with little national significance; but we somewhat keep deluding ourselves that it holds the key to our national aspirations. It’s a top-bottom approach to development that rarely works, let alone in a society where nothing is clearly understood nor structured.
Anyway, we are still on the matter, and our idea is to engineer the change from private sector domains, and then get the government(s) to fall in line. I believe it’s more effective than preaching to whacky politicians to deliver at scale, so that is where I am directing talent and energy.
The more i think about it, the more i differ from this popular notion that ‘ignorance’ or the share absence of ‘know-how’ -core intellectual capabilities, are the reasons for delivery of public good by political elites. I think of the ‘Snail in the bottle case’ built around the – who is my neighbor principle, established the civil law tort of negligence and required businesses to observe duty of care towards their customers and this can be enforced in principle.
In our political environment, it was vague to understand why we could not demand and hold public officials accountable to a fundamental service of delivery the mandate upon which they canvased and were elected, until, i dare say, the regime of President Trump.
We saw in President Trump the likes of a typical African ruler – president, governor, et al, but was restricted from the full expression of his caprices, hitherto, not by protests, advocacy, campaigns, media, freedoms, human rights but by institutions. We can now observe in contrast, how a politician can use (in our case, did use, to begin with, the 1999 Nigerian constitution for example) to lay the foundation of extractions, seeming so difficult to surmount two decades after.
Our political elites know very well, the problems, the solutions, how-to fix it, but their selfish interest and political advantage, supersedes the aspirations to build a country, a nation-state, a truly egalitarian society, where all is able to succeed at their own terms.
What Prof posited is already happening through remote jobs especially in the software industry though not at the scale expected to turn around the economy.
Of recent, we have seen scores of trainees from our Robotics and A1 centre being interviewed by EV firms in US, especially Houston, based on their skills in Robot operating systems( ROS).
I see this happening on a larger scale if Africa is deliberate and serious about deepening its digital infrastructure and high level digital skills especially in the emerging technologies of Robotics and automation, AI, Data science, cloud computing, cyber Security, Nanotechnology etc.
Spot on, but we still need to manufacture , at least what we use. Manufacturing is here to stay cos not everyone will acquire digital skills.
Surprised we have not noticed that import substitution industrial policy ISIP has kept us from being an exporting continent or country Nigeria, hence low percentage participation in global trade.Now it’s so hard to eliminate that policy from our psyche.
Then can we successfully leapfrog into this 4th industrial revolution without groundings in the 2nd and 3rd? Would the foundations be there? Some lessons might be lost on us leading to miscues’ and mistakes.