Developing a People Strategy for Global Competitiveness

Introduction

Fifty-six years ago, Nigeria began a hopeful journey towards projected greatness as an independent nation.  Despite the optimism at birth, her growth has been stunted by countless problems.  Though some were present at independence, the major problems bothering us today, in my opinion, are self-inflicted.  

Conceptual framework

A clarification of the key concepts of Strategy, Global Competitiveness and Competitive Advantage, their relationship and usage in this paper is appropriate for us to fully understand how lack of a clear people strategy can retard the growth and development of a nation and its people and lead to physical, intellectual and economic failure.

Strategy is defined as:

“ An integrated set of actions aimed at increasing long-term well-being and strength of enterprise relative to competitors”

Competitiveness is defined by The World Economic Forum (WEF) as:

“ the ability of a country to achieve sustained high rates of growth in gross domestic product (GDP) per capita.”

Competitive Advantage is defined as: anything that a firm or nation does especially well when compared to rival firms or nations.

 Why Am I Focused on People Strategy?

Investment in people is very critical to the realisation of the desired competitive advantage. Nations with clear and strategic focus on people-oriented policies stand a better chance of success than those who do not. This explains why the phrase “human capital’ has gained wide usage with reference to attainment of competitive advantage.  

 Global Context of Competitiveness

Human capital plays a major role in the projection of national power. The time when a modern economy would expect to survive only on raw material wealth is gone. Absence of a skilled labour force is harmful to the growth of a nation which may possess key raw materials. Governments all over the world want their countries to have high-value, high-skill economies, and they realise that the first step is to have a well-educated workforce. At the height of the Cold War between the USA and the defunct USSR, both countries tried to assert their supremacy through dominance in competitive sports and technological superiority - all driven by the advantage conferred on them by their investment in human capital. This has been recreated between China and the USA.  

 Principle of Competitive Advantage of Nations

Professor Michael Porter recognised this connection when he developed his Principle of Competitive Advantage of Nations in 1985. He argued that competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources or access to highly trained and skilled human capital. 

 Countries that are serious about achieving greatness through people make policy pronouncements that indicate how they intend to bridge their skills gap. 

 In 2008, then British Prime Minister Gordon Brown said that the:

  ‘United Kingdom has entered a global skills race where education, knowledge and skills would assume ever-greater importance. The challenge is to outsmart other national economies - whether established or emerging - in the ‘knowledge wars’ of the future. Once, we worried about a global arms race. The challenge this century is a global skills race and that is why we need to push ahead faster with our reforms to extend education opportunities for all. Globalisation dictates that the nations that succeed will be those that bring out the best in people and their potential. 

 Put simply, he said:

in the past, we unlocked only some of the talents of some of the people; the challenge now is to unlock all the talents of all of the people.’

 This was a clear policy statement on what the UK government intended to do to boost its competitiveness. It was not an empty boast either. What followed were specific actions which have contributed to the sustained image of UK as a ‘destination of choice for global finance’.  

 The success of the Indian IT industry is principally the outcome of a well-articulated People Strategy. From humble beginnings about fifty-three years ago, India has built what is now the world's largest pool of computing talent. This is a key factor in what has made India a destination of choice for major corporations looking for offshore IT outsourcing service providers. The pool of qualified Indian working population can be translated into what economists call 'demographic dividend' – this occurs when your surplus skilled population becomes a competitive advantage that can be exported.

 China also provides a good lesson. Chairman Mao’s successor, Hua Gofeng reformed Mao’s policies and programmes to suit the changing China. He advocated learning from the 'strong points of all countries including all that is genuinely good in the political, economic, scientific, and technological fields and in literature and art.'  The main reason for this change was that without strong universities teaching scientific and technical skills, China would get weaker and the economic modernization policies would not be achieved. Hua Gofeng’s vision was sustained by Deng Xiaoping who led the transformative changes that has confirmed China as a major economic power, showcasing its industrial might and national pride to the world during the Beijing 2008 Olympic Games. By 2012, China was ranked as 29th in the World Economic Forum’s Global Competitiveness Index and was executing its 11th 5-year Development Plan.

 In his autobiography, From Third World to First: The Singapore Story, we learnt how the visionary Lee Kuan Yew and his young team changed what was a poor colony into a shining, rich and modern nation-state.  Singapore has consistently maintained its position as a leading world economy as reflected in its ranking of 2nd in the 2012/2013 Global Competitiveness Index.  That is very commendable for a country with just over two million people (six years after it was forced to seek ‘independence’ when it was rejected by the Malaysian nation) and no natural resources (except for its maritime gateway). Singapore’s founding father and policy makers identified and have consistently maintained that nurturing human capital through a coherent people strategy is the key to attracting new investment as well as to sustaining its competitive position.  Singapore continues to prosper because Lee Kuan Yew implemented a people strategy that recognised that well-harnessed human capital is the key asset that will help the country achieve its overall objective: creating value.

 In a 2009 report, consulting firm Ernst & Young stated that:

  “…Forward-thinking organizations (and nations) use innovative talent  management approaches to gain a competitive advantage, to help them ride out the downturn and create a strong platform for recovery and growth”.

This quote clearly describes the approach taken by the United States, Britain, Canada and France. They have devised talent intervention initiatives to attract highly skilled foreigners to sustain their national competitiveness. Every year thousands of Nigerians apply for the US Diversity Lottery (DV) Programme. It is designed for potential immigrants with skills that are in demand to obtain the status of a permanent legal resident of the USA. 

 The UK Highly Skilled Migrant Programme (HSMP) was introduced in January 2002 for highly skilled individuals wishing to remain or to come to the United Kingdom to work as employed or self-employed persons. After serving its purpose, it was replaced in March 2008 with a new points-based system which uses similar assessment criteria to the HSMP.

 The Canadian government renews its human capital base with new legal immigrants. The type of immigrants required yearly is reviewed based on the pressing need of the economy. While Canada had a list of 38 ‘demanded occupations’ up till June 2010, the Canada Immigration New List for 2011 – 2012 had 29 Occupations with a cap of potential immigrants decreased to 10,000 / year.

 As French Minister of the Interior in Dominique de Villepin's government between 2005 and – 2007, former French President Nicolas Sarkozy instituted an immigration policy which emphasised an overt scheme of "selective immigration." This means recruiting highly skilled workers while limiting rights of residency for other entrants. Based on sectoral and geographical recruitment needs, those selected for their "skills and talents" were offered three-year resident permits. While France was keen on attracting skilled labour from abroad, the government had introduced annual deportation quotas, accepting fewer asylum seekers, and had changed the process of family immigration.

 We can see how forward-thinking nations take the quest to attract and retain skilled talent. It confirms that human capital competitiveness requires a strategic policy articulation at the national level.

 How competitive is Nigeria?

While these countries are developing and retaining a highly educated workforce, Nigeria does not have a well-articulated strategy to harness our growing pool of graduates who need direction and guidance.

 The World Economic Forum (WEF) 2012/2013 Global Competitiveness Index (published 5th Sept 2012) covering 140 countries and the UNDP Human Development Index (HDI) covering 187 countries will be used as the benchmark for this exercise. 

 The UNDP HDI measures poverty, literacy, education, life expectancy, and other related factors. It is a standard means of measuring well-being, especially child welfare. It measures the average achievements in a country in three basic dimensions of human development:

 ·        A long and healthy life, as measured by life expectancy at birth.

·        Knowledge, as measured by the adult literacy rate and the combined primary, secondary and tertiary gross enrollment ratio.

·        A decent standard of living, as measured by Gross Domestic Product per capita (Purchasing Parity Power in $US).

 In the 2012/2013 Global Competitiveness Index, the top African countries were: South Africa 52 (50), Mauritius (54), Rwanda 63 (70), Morocco 70 (73), Botswana 79 (80), Namibia 92 (83), Gambia 98 (99), Zambia 102 (113), Ghana 113 (114). It is worrying that Africa’s most populous country (Nigeria) with estimated population of 168 million people did not feature in the African league of top 9 economies. Nigeria was 15th in Africa and 115 out of 144 countries assessed in the Global Competitiveness Index.

 The top African countries in Africa in the Human Development Index (HDI) report were: Seychelles (52), Libya (64), Mauritius (77), Tunisia (94), Algeria (96), Gabon (106), Botswana (118), Namibia (120) and South Africa (123).  In the HDI ranking, Nigeria is ranked 156 out of 187 (just 16 places above Afghanistan). Please note that although Afghanistan was just coming out of a state of war, it was in 172nd position and was rated better than 15 sub-Saharan African countries.

 In summary, the report concluded that Nigeria’s position was as a result of poor and/or low investment in the key Human Development Index elements that drive and support the development of a healthy and competitive human capital base. High quality human capital cannot thrive unless we create the enabling environment. Only a government with a strong social conscience and a deep sense of patriotism can deliver on such objectives.  

 Can Nigeria truly claim to be an African giant when only five Nigerian universities made it into the Top 100 Universities in Africa ranking? If 1 in 4 Africans is a Nigerian, we should have a national strategic aspiration to have 25 or more Nigerian universities in the Africa Top 100 ranking. Has the Federal Ministry of Education been tasked to deliver this objective? The plan to establish six new federal universities when the existing ones are in a dilapidated state is baffling and surprising. To buttress the misalignment of policy direction and implementation, it is not unusual to see universities producing unemployable graduates with degrees that have no relevance to the sectors of the economy that will support the actualization of the national vision. Is this not a clear example of policy misalignment?  With the percentage of students failing the NECO secondary school examinations now hitting approx. 98.2% annually, we must admit that we have a national crisis suggestive of a failing state. 

 The fifth pillar of the World Economic Forum’s Global Competitiveness Report focuses on: Higher education and training. This pillar maintains that quality higher education and training is particularly crucial for economies that want to move up the value chain beyond simple production processes and products. It further add that today’s globalizing economy requires countries to nurture pools of well-educated workers who are able to perform complex tasks and adapt rapidly to their changing environment and the evolving needs of the economy.

 Conclusion

 I have focused on the daunting challenges facing Nigeria in the area of talent development and skill deficit. I have reviewed practical examples of how different countries are strategically addressing their human capital challenges through intelligently crafted people strategies. The paper highlighted the strategic importance human capital plays in a nation’s quest for global competitiveness. I can tell you today that many organisations are paying the price for poor investment in training and development through high cost of initial assessment, testing and recruitment.

 The human capital flight we are witnessing is symptomatic of a nation that has not formulated a people strategy that would ensure that it is conducive, appreciative and protective of its best talent. According to data released by the United States of America embassy in Abuja in 2009, “Nigeria has maintained its position as the number one country in Sub Saharan Africa for sending the largest number of students to the U.S.A.”  This mass exodus of our best students and the stable socio-political climate in the host countries discourages most of them from returning home after obtaining their numerous degrees at universities in Europe, Asia and North America. 

 The wealth of a nation is determined by the health and intellectual quality of its people. This; is the business case for the adoption of a clear national people strategy that will help Nigeria gain more from her huge pool of human capital.