Transcript policy guidelines to support industrial development in africa

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
POLICY GUIDELINES TO SUPPORT
INDUSTRIAL DEVELOPMENT IN AFRICA
Willie O. Siyanbola, PhD (Sussex), FMSN
Director-General/Chief Executive
National Centre for Technology Management
Being a paper presented at the launching of African Inter-Parliamentary Forum on Science,
Technology and Innovation (AIPF-STI ) on 4th of May, 2011 at Addis-Ababa, Ethiopia
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Outline of Presentation
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Opening remarks
Status of Africa’s industrialisation
Industrialisation and Innovation System
Global best practices – China, India, and Brazil
Industrial Policies in Nigeria
How can we catch up in Africa?
Policy Guidelines and Recommendations
N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Preamble
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Preamble
• Industrialisation is perhaps the only effective strategy
for raising per capita income in a sustained way Lawrence, 2003
• Productivity growth is a precondition for increasing
living standards and maintaining competitiveness in the
globalised economy
-Tilman, 2011
• Industrial growth in the West created an increasing
demand for primary agricultural and mining products
from developing countries
-Adam, 2009
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Preamble
• Therefore, Industrialisation became synonymous with
wealth, economic development, technological
leadership, political power and international dominance
• Signs of industrialisation: Increased manufacturing
contribution to GDP, employment, high capacity
utilisation, balanced infrastructure, highly skilled and
adaptable labour force etc.
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Industrial Policy is:
• a set of objectives and strategies to achieve economic
development over a given period of time
It could be:
– Selective industrial policy- targeted towards a specific sector, industry
or enterprise
– General industrial policy- no discrimination
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Status of Africa’s industrialisation
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
AFRICA
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Area
30,221,532
km2
(11,668,598.7
sq mi)
Population
1,000,010,00
0[1] (2005,
2nd)
Pop. density
30.51/km2
(about 80/sq
mi)
Demonym
African
Countries
54 (List of
countries)
Languages
List of
languages
Time Zones
UTC-1 to
UTC+4
N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Sources of Contribution to GDP in Africa
Sources of contributions to GDP In Africa
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25
20
15
10
5
0
Source: McKinsey Global Institute Analysis: 2010
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Contribution of manufacturing to the GDP in selected African countries
Source: www.earthtrend.wri.org Access 28th April, 2011
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Why low Manufacturing contribution to GDP?
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Low total factor productivity
Low absorptive capacity
Infrastructural decay
Low investment in R&D
Absence of robust industrial policy or poor
implementation
• Weak /Poor linkages among the elements of NIS
• All these factors are very critical to industrialisation
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Industrialization and the
Innovation System
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
The National Innovation System (NIS)
 “the network of institutions in the public and private sectors
whose activities and interactions initiate, import, modify and
diffuse new technologies.” (Freeman, 1987)
 “integrated system of economic and institutional agents directly
promoting the generation and use of innovation in a national
economy” (Adeoti, 2002)
• Key Elements are; government, finance, education and
research institutions and private sector.
 Hence, the effectiveness of the interaction among the key
elements of nation’s NIS determines her level of development
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
A typical structure of
National System of
Innovation (NIS)
Adapted from Tiffin,1997
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Industrialisation and innovation system
• Manufacturing relies on technology which relates
directly to the production of goods and services.
• Technology is the totality of knowledge, techniques,
procedures, processes, and skills that culminate in the
production of goods and services
• Knowledge is acquired through requisite education and
training
• These are factors that interplay with finance and other
elements within the system to enhance productivity
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Global Practices: Lessons for Africa
• China
• India
• Brazil
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Chinese experience
• China’s industrial policy for high-technology industries
combines key features of the policies pursued elsewhere
in East Asia such as opening to foreign investors and
supporting domestic firms
• Leveraging on its large market size, China has gone
further than other developing countries by promoting
standards for products
• Focused on industrial structure, technology transfer
concessions, and absorptive capacity
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Chinese experience
• Fostered a dual industrial structure that includes large
state-owned groups and small start-ups
• Encouraged public and private partnership
• Institutional reform: Government commitment to RIs and
Universities
• Increased enrolment and graduation rate in science and
engineering
• Increased R&D funding
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Indian experience
• Promotion of foreign direct investment: liberalized
economy
• Extending various incentives and concessions relating to
Entry Tax and Special Entry Tax, exemption of stamp
duty and reduction of registration charges
• Provision of Industrial infrastructure in various key
locations
• Implement mega industrial water supply schemes for
potential locations
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Industrial policy in India
• Encourage development of industrial cluster/corridor
• Give priority to upgrading of infrastructure in existing
and new industrial areas
• Promotion of Human Resource Development
• Promotion of Agro Food Processing Industry
• Provision of marketing assistance
• Promotion of local entrepreneurship
• Increased R&D funding
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Brazil’s experience
• largest and most populous country in Latin America
• Self-sufficient in oil and can boast of having
developed the world’s most efficient systems for
growing soybean and producing ethanol from
sugarcane
• Manufactures competitive commuter jet planes and the
world’s best flex-fuel cars
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Brazil’s strength
• Credence to innovation bill since 2002
• Increased R&D spending
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Incentives for Industrialization in Brazil
Source: IEDI (2010), Desafios da Inovação - Incentivos para Inovação: O que Falta ao Brasil
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NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
The Industrial Policy in Nigeria
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Objective of Industrial policy in Nigeria
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Overriding objective is to accelerate the pace of industrialization by
radically increasing value-added at every stage of the value chain.
Government will emphasize increases in Total Factor Productivity (TFP)
by pursuing knowledge and skill intensive production on the basis of
available best practices.
Strategy includes encouraging forward and backward linkages within
a few chosen niches.
Government to provide the enabling environment for private sector
leadership, facilitate renewal for sunset industries, and encourage
innovators.
Promote small and medium enterprises
N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Facts File on Nigerian Economy
Economic Activities
Educational
Institutions
Health Facilities:
Major Mineral Resources:
oil and gas, natural gas, coal,
bauxite, tantalite, gold, tin, iron ore,
limestone, niobium, lead, gypsum,
kaolin, rock salt, baryte, phosphate,
sapphire, topazes, uranium, and zinc
Higher Education
Institutions:
• University – 105
• Polytechnics – 71
• Monotechnics - 111
• College of Education
– 37
Public – 14607 and
Private – 9034
•Primary – 20,278
•Secondary – 3,303
•Tertiary – 60
(Source: NBS, 2005, 2010)
Research Institutes - 75
Major Agriculture Products:
groundnuts, cocoa, and palm-oil,
coconuts, citrus fruits, maize, pearl
millet, cassava, yams and sugar
cane.
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Primary Schools – 50,741
Enrolment - 20,951,818
Occupation/Cottage Enterprise:
Secondary Schools –
Farming, cattle and sheep rearing,
11,010
Lumbering, Palm Wine Tapping, Gin
Distillery, Palm and Groundnut Oil Milling, Enrolment – 5,422,611
Fishing & aquaculture activities,
(Source: NBS, 2005, 2010)
Blacksmith, Bronze casting, leather
tanning, Weaving, Canoe Carving,
Aluminum
casting,
and Trading
N A C E T E M…
Managing
Technology for Sustainable Development

Funding

Bank of Industry (BOI)
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Nigeria Agricultural,
Cooperative and Rural
Development Bank
(NACRDB)
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Micro Finance Banks
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Government Agencies
Development Partners
Voluntary agencies -?
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
MANUFACTURING VALUE ADDED (% GDP) IN THE NEXT-11 COUNTRIES, 2005
Nigeria
Turkey
Iran
Egypt
Bangladesh
Mexico
Pakistan
Vietnam
Philippines
South Korea
Indonesia
0
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5
10
15
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UtilizingTechnology
STI for Development
(c) 2010 Development
W. O. Siyanbola [email protected]
N A C E T E M… Managing
for Sustainable
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© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
INDUSTRIAL CAPACITY UTILISATION (1980 – 2003)
Industry utilising below 45% of installed capacity most of the time
Source: Plotted with figures from
CBN,STI2004
Utilizing
for Development (c) 2010 W. O.
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Siyanbola
[email protected]
N A C E T E M… Managing Technology for
Sustainable
Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
INDUSTRIAL INNOVATIVENESS IN NIGERIA
Successful
Abandoned
100
90
82.4
80.6
80
70
70
% of firms
72.9
58.8
60
45.3
50
40
31.2
30
21.8
40
31.2
28.2
20
10
1.8
2.4
0
0
Innovation Types
Source: NACETEM, 2009b
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Utilizing STI for Development (c) 2010 W. O.
N A C E T E M… Managing Technology for
Sustainable
Development
Siyanbola
[email protected]
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
OBSTACLES TO INNOVATION IN NIGERIA
Lack of skilled personnel
22.4
Long approval process within firm
23.1
Weak customer demands
28.7
Lack of information on technology
28.7
Legal restrictions
29.4
Domestic conditions
46.2
Lack of financing
52.4
High Cost of innovation
59.4
0
10
20
30
40
50
60
70
% of innovative firms
Source: NACETEM, 2009b
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
How do we get there in Africa?
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N A C E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Policy Guidelines and Recommendations
To support industrial development and be competitive in the
knowledge based global economy, African countries need to
develop capacity and capabilities to create world class businesses
and enterprises;
• Develop competences in (industrial) policy
formulation and implementation
• Build up and deploy virile NISs (Regional?)
approach in development
• Functional education (including TVET)
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•N A CDevelop
critical industrial infrastructure
E T E M… Managing Technology for Sustainable Development
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
Policy Guidelines and Recommendations
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• Promote Entrepreneurial Capacity building
• Emphasise innovation, technology learning
and assimilation
• Facilitate industrial R&D
• Establish venture capital to promote the
growth of new technology-based SMEs
• Focus on areas of competitive advantage
• Foster regional collaboration through
partnerships and networking
N A C E T E M… Managing Technology for Sustainable Development
• Etc...
© NACETEM 2011
NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)
Federal Ministry of Science and Technology, Nigeria
THANK YOU
FOR YOUR
ATTENTION
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