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Tuesday, June 18, 2024

Zim should evolve into a knowledge-based economy

Article by Kevin Tutani

A knowledge-based economy, refers to national system whereby consumption and production patterns are guided by high intellectual (intelligent) standards. In other words, consumers will be mindful of what and how they consume, whilst every productive activity of the government, private sector, NGOs or other institutions, is generally informed by sound intellectual methods.

Some knowledge-based societies (economies) in the world today include South Korea, USA, Japan and the EU, among others. Since the aforementioned economies are knowledge-based, they produce high value goods and services, whilst their consumption patterns (of their citizens and businesses) are guided by environmentally friendly, healthful, and intelligent choices. Consumers from those knowledge-based economies are generally more concerned about how their food, clothes, energy consumption (electricity, motor vehicle fuel), housing and  recreational activities, have an impact on their environment, economy and national (social) values, among other things. This has also driven firms in those developed countries, to adopt the highest standards in their production systems.

In a knowledge-based economy, industries are focused on manufacturing high-value goods and services, which earn them and their respective national economies, greater revenue and GDP (economic activity).  Thus, knowledge-based economies produce more useful (or usable) innovations compared to developing economies such as Zimbabwe. Developing economies rely on primary (unprocessed) goods for a significant share of their economic activity (GDP) and export revenues. Developing economies tend to be heavily focused on agriculture, minerals and in some cases, basic manufacturing, while highly developed (knowledge-based) countries go beyond that. Germany, for example, imports raw minerals which it uses to develop machinery and vehicles that are consumed locally (in Germany) and also exported.

On the other hand, developing countries such as South Africa and Zimbabwe, have their GDP dependent on unprocessed or basic agricultural and mineral commodities, which constitute a significant part of their GDP and exports. The mentioned developing countries are also known to be importers of high-value finished goods and services such as; farming machinery, passenger vehicles, clothing, software technologies for their different industries, internet services such as Google, Facebook, WhatsApp, Twitter (X), etc. Although some developing countries have managed to establish reasonable knowledge-based industries which also manufacture high value goods, they still import a larger amount of high-value finished products from knowledge-based economies such as the USA, Europe, China, India, etc.

Citizens within a knowledge economy also have high intellectual capabilities. That means  any type of procedures in those economies are typically done using the most efficient and technological methods available. Whether at primary school, community meetings, or national government policy level, procedures are carried out in line with the best practices. This keeps such economies efficient and highly productive.

State of Zimbabwe’s knowledge economy

In Zimbabwe, most activities are not fully knowledge-based. This applies to economic, social and any other activities which are carried out within the country.

In terms of commercial services, a number of key services depend on imported products and intangibles such as computer software,  for their operational continuity.  For example, the local tourism sector, which is the third-largest sector of the economy, depends on imported vehicles, soaps, towels, etc. However, if the economy gravitates towards being a knowledge-based economy, it would increasingly produce more goods used in local and international value chains. In other words, the more that the country gravitates towards a knowledge-based economy, is also the more that it will increasingly own value chains pertaining to goods and services which it consumes locally or exports internationally.

In the mining sector, Zimbabwe largely exports unprocessed or lightly processed commodities such as chrome, lithium, platinum, gold, etc. The markets to which these goods are exported, usually further-process them so that they are suitable for consumption by industries which use intermediate industrial goods or by the ultimate consumers.

At this stage, Zimbabwe does not seem to be seized by the need to develop its own intermediate or final industrial  products or even final consumer goods. There is no urgency to develop lithium batteries for electric vehicles or battery energy storage systems for households and municipalities. Neither is there an urgency to develop jewellery brands which sell finished local jewellery products in foreign retail stores. If such goals are already being pursued, it is unfortunate that they remain of little visibility to the common man.

In agriculture, the country’s food security depends on maize, which Zimbabwe neither has the competitive advantage nor the geographical conditions to competitively produce. It stands to reason that either the nation’s consumption patterns have to be engineered to adopt new staple foods which it can competitively produce, or it has to develop strong international competences (productivity) in maize production. Without such changes, agricultural land will continue to be put to inefficient use. Tobacco, Zimbabwe’s most prominent cash crop and agricultural export revenue earner, is also being exported in an unprocessed form. The country is earning only US$1 billion or 2% of the value of final tobacco products, which can be made from the raw tobacco exports.

Households and businesses have not been cultured (adequately educated) to dispose of waste in an environmentally friendly manner. As a result, the country’s Central Business Districts (CBDs) are strewn with litter, whilst residential areas have public rubbish dumps, full of  garbage which can be composted at a household level. The municipal authorities also struggle to manage water distribution and sewage systems, posing a threat to national health.

Transportation systems are still dependent on private and freight road vehicles, instead of rail and dignified public transport carriers (such as buses). This causes road congestion and higher carbon emissions. On the other hand, electricity from the national grid is largely carbon-intensive.

Changing for the better

It is possible to make Zimbabwe a knowledge-based economy, if certain changes are introduced. The required changes will also need to be implemented through the cooperation of all important stakeholders such as; the government, private sector, Non-Governmental Organisations (NGOs), other institutions and ordinary citizens.

Firstly, the country needs to work on doubling the number of its researchers. Since most equipped researchers have PhD (doctoral) qualifications, that means that, doctoral graduates will need to be doubled. The doctoral students should also be encouraged or mandated by law, to focus on research or studies which address the existing local (economic, social, health, engineering, etc) problems. Their research should strictly focus on providing solutions to existing local problems, so that innovations can be made which solve local challenges firstly. If their knowledge is easily transferable, then an increasing  number of citizens will  be equipped to also address local problems. That would be a quicker and more effective way to get solutions to several local problems such as; low agricultural productivity, depleting water resources, cholera, disorderly transportation systems, disintegration of marriages, etc.

In the G20 (group of twenty rich and politically influential countries) for example, South Korea has the highest number (9 000) of researches per 1 million citizens. It is trailed by Japan, USA, UK and the EU, which have around 5 000 researchers per 1 million citizens. Clearly, the same countries are popular for advances in innovation and the development of high-value products and services. For clarity, researchers are professionals who conduct first-hand studies and develop or improve concepts, theories, models or techniques. 

They can be present in any educational or professional discipline including; education, spoken languages, computer programming, biotechnology, industrial machinery development, etc. If they are given a conducive environment (funding and space to research), their presence in an economy translates to new discoveries or knew knowledge  which can be the form of progressive innovations.

Secondly, strong interrelationships in knowledge sharing and innovative developments should be encouraged among all social, industrial and economic entities. The frequency and depth of knowledge sharing among SMEs, large-scale businesses, the government, NGOs and other local institutions, should be made more intensive, in order to promote the greater development of innovations. The interrelationships may be initiated through a higher frequency of research and consultative conferences, where common national problems are identified and innovative ways to solve them are designed.

The government can facilitate these interactions through initiating such meetings, as the different government Ministries provide a platform for consultative meetings for entities which fall within their mandates. In that regard, the different faculties of local universities should also be encouraged to host more national and international conferences, where research-papers on problems pertaining to Zimbabwe, are submitted. The results (research information) drawn from those conferences should then be used to influence  and direct national policies. Institutions such as the Reserve Bank of Zimbabwe (RBZ), CMED, CVR, Zimbabwe Republic Police (ZRP), ARDA, SIRDC, should also be encouraged to facilitate consultative and research conferences which address local problems that are present in their respective fields. That would imply that the strategies, policies and tactics of such organisations will eventually be informed by intellectual research, instead of emotions or other clumsy approaches.

Interrelationships also mean that some innovations from local universities and entrepreneurs may be adopted by successful domestic businesses. For example, AFDIS, may be drawn to adopt the “Mapfura wine” (Marula fruit wine) invention, if it is a profitable product with a strong business potential. In the same manner, other local behemoths such as Innscor, Simbisa, Econet, British American Tobacco Zimbabwe, etc, should be open to adopting feasible local inventions as part of their product portfolios.

Thirdly, the institutional environment should be committed towards the provision of incentives for innovative entrepreneurship. Government policies and funding to support the country’s innovative potential are a good example. The revival of the National Venture Capital Fund, or free registration of intellectual property (IP) are other positive directions which can provide a supportive institutional environment. Government lawyers can also be provided for free, if entrepreneurs wish to settle disputes pertaining to intellectual property (such as the theft of ideas, etc). All these encourage growth in innovative entrepreneurship which also translates to growth in innovative creations.

The reasoning presented by this article, shows that it is time for Zimbabwe to move from a resource-based economy to a knowledge-based economy. In a knowledge economy, the country will not subsist on selling unprocessed commodities at base prices but on selling value added goods which earn greater revenue. Also, a transition to a knowledge-based economy implies that the country will be better equipped to deal with pressing national problems, which may manifest as social, economic or scientific problems.

Kevin Tutani is a political economy analyst you can get in touch with him – tutanikevin@gmail.com

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