This must be one of the most exciting times to live and work in Africa. The potential opportunities for the brave and fearless appear endless. After centuries of supplying Europe, Asia and the Americas with cheap labour and raw materials the continent is ironically turning into one of the more exciting destinations for investments from these same regions.
This is happening because ageing populations in the North are desperately seeking good returns on investment for their life savings. And they believe such returns are likely to be found in demographically exploding Africa and South Asia.
Such investments may result in African GDP growth but will not necessarily provide for social development. Social development requires that workers progressively move up the value chain of production and gain higher incomes, thus affording them better goods and services.
In the 18th century the British blocked textile imports from India – one of the largest textile producers at the time – for almost a hundred years until their domestic producers could become competitive. They subsequently invested large sums to develop the cotton fields and railroads of India to feed British industrialization which was then dominated by the textile industry.
By the mid-20th century colonial India had remarkable infrastructure and a growing GDP but little social development. Indians were relegated to growing increasing volumes of cheap cotton in exchange for expensive finished textiles from Britain. This explains why Mahatma Ghandi’s first move at independence was to limit textile imports and return Indians to processing cotton into textiles once again.
A little over half a century later India is back as the second largest textile exporter in the world and social development continues apace. Therefore it is clear that providing effective protection for local industry is key to encouraging industrialization and social development. However this is not enough. Another British ex-colony, Egypt, produced even higher quality cotton than India and gained independence around the same time, but is nowhere in the league of large textile exporters today.
As the first native leader since Biblical Egypt Gamal Abdel Nasser was extremely popular upon independence and provided protection for his new textile industry. However neither his popularity nor the protections resulted in sustained success for the Egyptian cotton and textile sector.
The difference between the Egyptian and Indian trajectories may be explained by the fact that Ghandi started independent life by working his famous yarn spinning wheel, while Nasser was busy with grand geo-political ambitions and paid scant attention to weaving technological change and innovation into his society’s fabric.
Ghandi was well aware that under British government protection from Indian products “John Kay invented the flying shuttle in 1734 in Lancashire — one of the first of a series of inventions associated with the cotton woven fabric industry. The flying shuttle increased the width of cotton cloth and speed of production of a single weaver at a loom.
In 1761, the Duke of Bridgewater’s canal connected Manchester to the coal fields of Worsley and in 1762, Matthew Boulton opened the Soho Foundry engineering works in Handsworth, Birmingham. His partnership with Scottish engineer James Watt resulted, in 1775, in the commercial production of the more efficient Watt steam engine which used a separate condenser.
In 1764, James Hargreaves is credited as inventor of the spinning jenny which multiplied the spun thread production capacity of a single worker — initially eightfold and subsequently much further. Also in 1764, Thorp Mill, the first water-powered cotton mill in the world was constructed at Royton, Lancashire, and was used for carding cotton…”1
With the spinning and weaving process mechanized, cotton mills cropped up all over the North West of 18th century England. Britain was developing and now ready to compete with her colonies. With such knowledge in tow Ghandi’s India later innovatively adapted many of the technologies of Lancashire and successfully used them in an industry that had novel management and ownership structures never before seen in Britain.
Since the time of the British Industrial Revolution, technological change has come to be viewed as the basis for innovation. Here it is important to distinguish between inventions – physical proofs of concepts – which are critical inputs into the innovative process, and innovation which has an effective impact in either the economic or social sphere.
Moreover as demonstrated by the Indian textile industry innovation need not only encompass the novel machines of an industry but also the management and ownership structures that best fit the new technologies, and the environment in which they are used.
Just like Egypt most African states are still struggling to implement innovation based social development because of a lack of vision at the level of political and industrial leadership, incoherent systems of innovation, and over-reliance on raw minerals and commodities. Even the countries that are partly industrialized are struggling to shift their industries away from supporting commodity extraction towards satisfying the basic needs of their citizens.
Many African initiatives have relied too heavily on what particular organs of the state ought to do to encourage innovation. In many cases policy has been directed at creating entrepreneurs, and in the case of South Africa even industrialists. These policies are unlikely to work.
The focus should rather shift to creating communities which nurture technical ideas, make investments in risky environments, and divide the benefits so that both investors and personnel are motivated to develop the competences that are needed to pull off sustainable industrialization.
While the entrepreneur is an important agent of innovation, state and industrial policy should focus on encouraging the communities from which applicable technologies, entrepreneurs and institutions can emerge. Thus identifying and developing communities of motivated actors at the steel sector level, for instance, is likely to be more effective at managing sustainability and innovation in our industry as compared to other protective state actions.
Africans today face numerous challenges that require innovative solutions. These include services to supply healthy food, safe housing, sanitation, clean water and clean energy. Along with domestic and exploding foreign investment these can surely provide the demand needed to stimulate innovation.
There are encouraging green shoots around the continent. For instance “in the arena of clean water, Askwar Hilonga, a Tanzanian chemical engineer, recently developed a low-cost nanotechnology water filter that can both remove chemical contaminants and microorganisms, for which he won the prestigious Africa Prize for Engineering Innovation.
In the field of healthcare, the Beninese scientist, Valentin Agon, won another prestigious prize, the 2016 Innovation Prize for Africa, for developing “Api-Palu”, a low-cost anti-malarial drug treatment that is based on plant extracts and is already in the market in the Central African Republic, Chad, Burkina Faso and Benin.
In renewable energy, the award winning company, Photovoltaic Technology Intellectual Property (PTiP) Innovations, began the manufacturing of its locally-developed and publicly-funded thin film solar panels in Stellenbosch, South Africa, in 2015 in collaboration with a German firm…”2
There is no reason why a steel sector mobilization by our industry cannot result in large numbers of innovations that make use of African iron and steel to serve Africans. We need to encourage the innovative communities in and around the steel industry to use local and imported technology, and improve upon them to fit the needs of our society. This will go a long way to sustainable protection of the steel industry.
This would require mobilization of industrial managers, labour unions and relevant organs of the state to provide the space and resources to support these communities of innovation. Just as in Britain and India this will allow temporarily protected innovative industries to serve African needs in the near future. Some of these will then export their products competitively in the long run.
Even the motivation to buy local is greatest when large numbers of people are actively engaged in the creation and production of the goods and services that they use. Ultimately this is what economic sustainability and social development is all about.
1 Wikipedia article (https://en.wikipedia.org/wiki/Textile_industry) as modified by the author
2 Discussions with Dr Diran Soumonni of the Wits Business School as modified by the author