Stones in My Shoes - Visions of OBJ’s Software Park —1

Part One of a call to wake up to the national urgency of prioritising the knowledge economy in national planning by Chinenye Mba—Uzoukwu, CEO of InfoGraphics Nigeria Limited and member of the National Executive Council of the Nigeria Computer Society (NCS). Published 16th April, 2004 |Lagos, Nigeria

I woke up with a thumping heart and a smile on my face. Then I realised it was just a dream. The President was still in Abuja, the opening ceremony was a mirage and I was obviously suffering from malaria. A couple of weeks before I had intrigued my friend and partner, Pius, with the idea of converting the abandoned Federal Secretariat in Ikoyi into a business park, a technology—based complex equipped to incubate the emergence of a thousand small—to—medium software companies. Before I take you into the bright lights of a tantalising future I had glimpsed, let me first share my present nightmare.

A few months back I had taken a wrong turn and driven past the tree—lined front of the and had a fleeting thought about how the haunting atmosphere of the decaying, but still magnificent structure was a reflection of the emptiness most Nigerians of my generation feel when looking back at our country’s promises in the early 70s. Already much has been written and expressed about the “wasted years” — I will refrain from joining the chorus of lamentation. Often I am reminded that the time has past for this: perhaps we should have joined the tide of Nigerians heading for the Diaspora. We have stayed but that is a story for another day.

I have written and stated at various fora that it is my fervent belief that this nation must come to the realisation that “the hope for a strong and progressive economy in the 21st century, does not lie with the so-called real sector no matter how much we wish it were so.” As a result of the beliefs we have held and carried over with tenacity from the era of the command economy paradigms of the 20th century and its attendant policy implications, we continue to walk in the well—trodden but myopic path of economic salvation lying in “industrialisation”. This economic powerhouse we are constructing largely in our minds will never export chocolates to Switzerland, milk to Holland, poultry to China, leather to Italy, cars to the US, computers to Singapore, coal to Russia, steel to Japan, tyres to France, cotton to India or cement to Poland. It will not do so either to West Africa since these countries produce exactly what we do the way we do. Equally important, the Nigerian economy represents approximately 70% of the GDP of the sub-region—who then will we be exporting to? North, East and South Africa are no-go areas. What then is the basis of our much-vaunted economic planning if we have no markets for what we have decided to offer the world in trade?

For 40 years we have pursued a mirage—it is time to wake up. The future lies in the knowledge economy. To participate fully in this economy, we need first to understand its dynamics and then to consciously plan and implement policies that create the capacity to compete. By implication, building meaningful capacity in the national economy will demand new policies and a new generation of political thinkers. In the old economy, fixed assets, financing, and labor were the principle sources of competitive advantage for firms. Countries focused on physical infrastructure for factories, gap financing for big industrial projects, and marketing and incentives to attract industry.

In the Knowledge Economy, we need to shift our focus from “hunting and gathering” (industrial recruitment) to “gardening” (promoting growth from within). Tomorrow’s jobs will come from fast-growing entrepreneurial firms, and not from the small number of assembly and re-bagging plant relocations. Countries that ignore entrepreneurial growth in favor of expensive zero-sum industrial recruitment will do so at their own peril. An excellent example: in the early 1980s, The state of Iowa in the US chose not to provide a loan and business assistance to Ted Waitt, a twenty-something fledgling entrepreneur seeking to start a new firm, since his was not a large firm nor a big industrial recruitment prospect. Waitt, who had an idea of selling computers by mail order, stayed in the same metropolitan area, but went just across the state border to South Dakota, which was more than happy to help him grow his company. Today, that company, Gateway, is one of the largest employers in South Dakota.

Back home, for most of our working population (generally between the ages of 25 and 45 years) the reality and the promise which together create the crucible of hope in which they desire to forge their destinies lies far from the prescriptions of the mandarins of command economics. Rather, look around you: everywhere you will see stubborn buds of entrepreneurship raising shoots through the hard and brittle soil of our economy. Threading traffic in the hot sun and swirling dust of the metropolis, our youth are hawking pure water and GSM cards. In dark, narrow corridors of overcrowded markets, they jostle for the attention of buyers in intense competition even with Indians and now, Chinese petty traders. Along the streets and skirting stinking gutters, they prop up makeshift sheds of broken planks and blue plastic beneath which they house a treasure strove of odds and ends, second—hand shoes and clothes, bibles and photocopied motivational books.

From these scenes to the well—established boardrooms of Corporate Nigeria is a long journey that few have negotiated in nearly 40 years of independence. Herein lies the real story: that in a massive nation of aggressively entrepreneurial and capitalist—oriented people, the indigenous business class is still described as nascent while the framework for entrepreneurial activity (funding mechanisms, policy formulation, tax incentives, legislation, etc.) are stuck in neutral gear and heading nowhere slowly. There will be no economic miracle in Nigeria unless this gap is closed and rapidly too.

The key to closing this gap this lies in stimulating small business growth, spurring an innovation—led expansion and building our national technological infrastructure. According to a 2003 Report by the House Small Business Committee of the Congress of the United States House of Representatives, during the early 1990s, there was a period of economic contraction in the U.S., which led to one of the longest economic expansions in US history. This expansion was characterized by the acceleration in growth rates of real GDP, productivity, employment, investment and wages. For example, from 1995 through 2000, the annual average GDP growth rate was 2.55%. And over the 10-year boom, equity prices registered a spectacular increase, median household incomes jumped by more than 8% and almost 1.7 million families left the welfare rolls, ushering in a new era of economic prosperity. The Report observed that an economic phenomenon that was key to recovery then is the power of small companies. In the 1989-1993 recession, these small companies created approximately 3.8 million jobs, outpacing large firms by nearly 500,000 jobs. It was the laid-off, white-collar executive who was most likely to start a business, as roughly 25 percent of downsized managers over the age of 40 started their own firms. Historically, small companies have led the way to recovery due to their ability to respond to sharp changes in economic conditions, spur job creation instead of layoffs, and maintain profits in an uncertain environment.

Observing the innovation-based economic growth of Singapore, Winston T.H. Koha and Poh Kam Wong state that Technological progress and innovation has always played a central role in a country’s economic growth. As an economy advances to the global technological frontier and narrows the technological gap, the potential for economic growth from catching up with the leaders through capital accumulation and learning existing technologies diminishes. This has meant that historically, the efforts of country’s like Nigeria to attain rapid economic growth have been built on flawed premises ab initio.

For the first time in our history however the internal contradictions of the economies of the advanced industrial nations offer us advantageous access to lucrative markets for soft skills and goods. We must recognise that the control over the means of production is no longer exclusively in the hands of the advanced industrial economies. Today, the ability to create, distribute and exploit knowledge has become a major source of competitive advantage, wealth creation and improvements in the quality of life. In the 20th century, newly industrialized economies such as China, South Korea, Taiwan and Singapore, have transformed their economies by improving the technological performance of their industries through well-thought out science and technology policies. With their deepened technological capabilities, they are now able to compete consistently and successfully on a global scale in a growing number of industries. They have combined policies for investment that encourage and reward entrepreneurship with those that facilitate the greatest flow and use of commercially-relevant technologies.

A country’s technological infrastructure is a key component of a nation’s set of competitive advantages in technology creation and innovation. Broadly speaking, a country’s technological infrastructure encompasses the education system, the private and public research organizations, the network of technological and scientific associations, and its legal institutions such as intellectual property rights as well as institutions and legislations which provide incentives to develop and exchange technologies.

In the context of the above, the recent move to auction the Federal Secretariat is folly. If the government does not know what to do with, we do. In the concluding part of this article, I will paint a vivid picture of the dream I had and ask you to join in inviting OBJ to commission the largest industrial ( read “software”) park in Africa.

16th April, 2004 |Lagos, Nigeria