Innovation: a contrary take

I wrote previously about irrational exuberance, the sense that Father Christmas will drop economic prosperity down the chimney come Christmas. One of the applied facets of that field is innovation. Try as it might, innovation almost certainly won't take root in Namibia.

Let me illustrate that using the example of Namibia as a manufacturer of cars. Uri, a vehicle designed locally began manufacturing in 2001. It ceased production in 2004 due to financial issues and poor procurement. The procurement issue also arose with the Peugeot assembly plant.

Namibia is not yet cut out for innovation. There are four reasons why.

Procurement is one of the issues. If an innovative product cannot find a market in its home territory, it will not have the resource to grow, much less cross the border. A second reason is a culture which 'does not rock the boat'. I have the sense that if a cure for cancer were developed locally, committee-driven mistrust would conclude that it was too risky, and recommend that the developer produce paracetamol instead. A third reason is limited understanding of the economics of industries and sectors. Overpromising leads to creeping expenses and adds to the mistrust. A fourth reason is the time it takes for the initiative to pay off. If the innovator is not able to earn a living wage, the initiative will have to be abandoned.

If a culture of innovation is to develop in Namibia, innovation has to be trusted, realistic in terms of the industry and its ecosystem, it will often need the support of government procurement (it's a small market), and there is the issue of firm-level economics: it has to support the innovator.

Namibia needs to open up to innovation before it can reap the benefits. There's a lot more that can be said about this and I can illustrate the blockages with many more examples, but for now I am looking forward to the weekend. I am open for debate. Message me if you want to talk about this.