Alex Baisch CEO of PackSolve
AUTHOR: Alex Baisch – CEO of PackSolve
Labels and product stamps across the world reveal the all too familiar imprints ‘Made in China’ or ‘Made in Japan’. There is no question that Africa as a developing continent, is rich with endless opportunity. This begs the question; how should African countries be looking to increase their manufacturing sectors to grow their economies and should they take notes from the Far East?
A look at history reveals that in the late-1800s, a fleet of American ships arrived at the shores of Japan, which had kept itself very isolated for the world for nearly 300 years. This came to an end when the foreign ships, using their cannons, demanded Japan open its borders for proper trade. Japan, in turn, realised it had fallen staggeringly behind other nations and set about to enact a terrific modern reformation of its society. Within a space of decades, Japan transformed from a feudal backwater to a leading industrial power, a period now called the Meiji Restoration.
Ever since then, the Far East has held a mythos of excellence and progress. This was again amplified with the so-called Asian Miracle of the late 20th century when countries such as Taiwan, Hong Kong, Singapore and South Korea developed from low bases into industrial powerhouses. Today Asia, particularly, China dominate manufacturing.
Take lessons from Asia
In order to progress the Manufacturing sector in Africa, industry needs to take lessons (in part) from Asia, however the main focus should be on intra African collaboration.
It’s very tempting to make comparisons between the Asian Tigers and the future of Africa. In some areas this is very good: nations can do little wrong when noting Singapore’s highly effective management and policies. There are also less objective but nonetheless enticing observations such as Asian work ethic or the structure created by Confucian culture.
But there is also a danger to following the logic that if African nations could walk the same route as their Asian contemporaries, they would reach the same success. I don’t believe so. China, Singapore, Japan… these are all singulars. Together they barely make a group. Africa has 54 sovereignties, layered with numerous local and foreign dialects. It’s more akin to Europe - if Europe combined with China and the US in size. This is one reason why foreign investors often struggle with the continent: they fail to understand its cultural complexity and as such underestimate it. Africa is a complicated place, one where the strategies of China aren’t guaranteed to replicate the same success.
There are of course great lessons we can take from the Asian Tigers, such as better business environments and clearly defined policies that are enacted. We can also add addressing the cancer of corruption, lacking infrastructure and the strife of ordinary citizens to that list.
Lack of cooperation
Countries such as Rwanda and Ethiopia are making big gains due to a heightened focus on those areas, as well as other issues such as skills development. However, there is an evident lack of cooperation between African countries. For example, it’s still cheaper to connect some flights to African countries via Europe than to fly directly.
The latter situation is almost uniquely an African problem today: Asia’s challenges to establish regional cooperation pale in comparison. African nations should aim to pursue industrial and manufacturing on their own terms, yet with a healthy knowledge of what did and didn’t work for Asian economies.
Unfortunately, there are social leaders and politicians who want to polarise the debate, defiantly saying there is nothing to learn from how Asian economies industrialised and came to dominate manufacturing. This is pure folly: the Asian economies give the most striking contemporary and proven examples of modern economic principles in action. They prove without a doubt that good policy, institutional rigour and pro-business environments create financial prosperity for all.
Although manufacturers in Africa cannot mindlessly emulate what the Chinese are doing, we need to remember that China is a country. Africa isn’t. China is the largest collection of sovereign states on any continent and home to a diverse variety of cultures. This must be respected and incorporated into any industrialisation strategy. For industry growth African nations will need to blaze their own trails and help each other by collaborating through healthy competition.
We should ‘buy African’ more, which starts with ‘Made in Africa’.