On the realities of spurring employment via technology – Part III

There are potentially many areas to explore in solving the country’s biting unemployment problem; but it is the potential impact of technology-related solutions that is addressed in this article. In last week’s article in the series “On the realities of spurring employment via technology,” I gave some numbers for the unemployment rate in Nigeria as […]

There are potentially many areas to explore in solving the country’s biting unemployment problem; but it is the potential impact of technology-related solutions that is addressed in this article.

In last week’s article in the series “On the realities of spurring employment via technology,” I gave some numbers for the unemployment rate in Nigeria as of early March 2019. I also reiterated my earlier disposition that the government (Federal, State, and Local) couldn’t possibly provide employment for everyone per se; saying that in the US in February of this year, the government provided only15% of the employment for the 150,606 people that were in active workforce at that time. I showed the employment data by industry and discussed the industry classification often referred to as the knowledge- and technology-intensive (KTI) industries. The KTI categories include: (a) Public knowledge-intensive (KI) services, (b) Commercial knowledge-intensive services, (c) High-technology manufacturing, and (d) Medium-high-technology manufacturing.

By examining the realities of the capacity of Category (c) alone to employ, I suggested that we would have to include, not just category (c) industries, but also a larger component of the overall KTI industries, in order to significantly impact unemployment.

A few days after submitting last week’s article to Daily Trust for publishing, I heard an Africa business person on TV saying something to the effect that Africa should cede manufacturing and high technology to Asian countries (China, Japan, South Korea), suggesting that Africa would never be able to compete with these other people in technology-related manufacturing. He suggested that Africa should instead focus on tourism and agriculture.

Obviously this person means well, as tourism, and, especially, agriculture, have some real potential to provide employment, as suggested in Part I of this series. However, I have several issues with this suggestion. First of all, it is not a zero-sum situation. Nigeria is a big country, and is getting bigger every minute. This means that we cannot be importing most of the technology-related things we need (cars, trains, materials for infrastructure construction, building materials, consumer goods, and so on)! We have to produce them within the country if we are ever going to develop. Moreover, because of the size, we will be producing mostly for local consumption, not necessarily for export, at least initially. In that sense, we will not be competing directly with other countries – the Asian countries for example – assuming of course that government policies are effective in protecting local manufacturers from foreign competition. Protectionism is almost mandatory for any country that is trying to get out of the dumps.

It should be noted that the Asian countries themselves have not always been technologically advanced. South Korea was probably poorer than Nigeria fifty years ago, and it was merely in the past decade or so that China started building stuff. China could have maintained the disposition that the US had been developed more than a century ago, so that there was no point in China having the big ambition to develop its own technology or manufacturing base. It is still true that China is behind the US in the manufacturing of certain high technology products. For example, whereas companies like Boeing in the US have been producing commercial airliners for more than 80 years, China has not yet been able to put its first to service. However, today, in general manufacturing, China’s prowess is certainly a force to be reckoned with.

Besides the fact that manufacturing is so central to our daily lives, the revenues from other sources, including agriculture and tourism, could be merely a drop in the bucket compared to the amount spent on importation of essential tech-related goods. This will place the country in perpetual trade deficit. Small countries like Mauritius or UAE, populations of approximately 1.3 million and 9.4 million, respectively, can focus on tourism; not Nigeria with a population of over 190 million people.

So how should we go about developing and improving Nigeria’s technology landscape so folks can get employed?  There are obvious challenges; the biggest by far being the inadequate power supply. There is also the issue of mediocre skill set. Although the people who are actually doing the manufacturing are not those with Ph.D.’s, the skills for manufacturing have to be systematically developed, and not left to chance!

A relevant question to ask is whether or not Nigeria at all knows where to start! Should the country start the way of China, whereby initially most of the technology companies were essentially government-owned? That is, shouldn’t the government begin to establish manufacturing outfits that are wholly funded by the government, at least initially? I learned of some locally-owned and managed auto assembly plants in some parts of the country; can these be transformed to something bigger and better by government intervention? What about the idea of government giving out contracts for research that lead to real tech products?

These are other possibilities will be discussed in the next, and final, article in this series.