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.
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.
