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Vote Manufacturing Economy by Cletus Olebunne Cletus E. Olebunne August 1st, 2005
What we hope to accomplish with NEL
We want to initiate discussion and debate, to propose a new framework for thinking about the future of Nigeria’s economy and society. We desperately need society-wide innovation to bring Nigeria into a sustainable economic growth. We can't do it locked into outdated structure of governments that are not business friendly. We are not offering a blueprint or template or easy prescription. We don't believe there is one formula. We are just saying that Nigerian Leadership should become entrepreneurial. At Nigerian Entrepreneurial Leadership, we are presenting a new way to think about business-government relationship and the importance of a manufacturing economy in an era when most developed economies are well into knowledge economy, and moving towards creative economy. The concept of manufacturing economy is very suitable for poor economies, such as Nigeria, because it lacks the knowledge skill ratio (not the knowledge educational ratio) that will allow it to frog leap into knowledge economy. In doing this, we present a model that can help ignite the next episode of entrepreneurial capitalism and so inaugurate a vast new wave of wealth creation for the 21st century and beyond.
A new generation of young Nigerians with capitalistic entrepreneurial mindset is beginning to emerge, and government needs to encourage it. These young Nigerians are ready to jump the curve from the old no economic model to the knowledge economy. This is where we need to be patient; even though Information Technology has helped to advance the knowledge economy, we need not build Nigerian economy from knowledge economy. Every sustained economy started from manufacturing economy. Nel-m proposed Manufacturing Economy discussion group will seek voices for change.
Two Excerpts from Naked Economic:
1. Good government makes a market economy possible. Period. And bad government, or no government, dashes capitalism against rocks, which is one reason that billions of people live in dire poverty around the globe. Government sets the rules. Countries without functioning governments are not oases of free market prosperity. They are places in which it is expensive and difficult to conduct even the simplest business. Nigeria has one of the world’s largest reserves of oil and natural gas, yet firms trying to do business there, face a problem known locally as BYOI – Bring Your Own Infrastructure (“Here’s Hoping: A Survey of Nigeria”, Economist, January 15,2000). Angola is rich with oil and diamonds, but the wealth has financed over a decade of civil war, not economic prosperity. In 1999, Angola’s rulers spent $900 million in oil revenues to purchase weapons. Never mind that one child in three dies before the age of five and life expectancy is a shocking forty-two years, (“Angola Paradox: Oil Wealth Only Adds to Misery,” New York Times, April 9, 2000). These are not countries in which the market economy has failed; they are countries in which the government has failed to develop and sustain the institutions necessary to support a market economy. A recent United Nations Development Program placed much of the blame for world poverty on bad government. Without good governance, reliance on trickle-down economic development and a host of other strategies will not work, the report concluded (New York Times, April 5, 2000, p A11) --- Chp.3
2. The reality is that nobody ever likes the umpire, but you can’t play the World Series without one. So what are the rules for a functional market economy? First, the government defines and protects property rights. You own things: your home, your car, your dog, your golf clubs, your land, etc. Effective regulation and oversight makes markets more credible. Because of the diligence of the Securities and Exchange Commission (SEC), one can buy shares in a new company listed on the NASDAQ with a reasonable degree of certainty that neither the company nor the traders on the stock exchange are engaging in fraud. In short, government is responsible for the rule of law. (Failure of the rule of law is one reason why nepotism, clans, and other family-centered behavior are so common in developing countries; in the absence of binding contractual agreements, business deals can be guaranteed only by some kind of personal relationship.) Sophisticated institution both public and private, makes it possible to undertake complex transactions with total strangers --- Chp.3
Vote: The Manufacturing Economy's First Campaign
Nigerian youths whose future is at stake should ask 2007 potentials about growth, innovation, change, and leadership. They should also ask candidates to talk about their views on leadership in the new economy; the impact of the Web on business, government, and society; and the challenge of the digital divide, and how they will incorporate these in a manufacturing economy. This is the time all your knowledge and experience should come handy. You cannot accept anything less than a quality leadership, a leadership that is very entrepreneurial and knows what time of the day it is in the global economy. A candidate that knows what time it is should come across as a person who genuinely gets the logic and the operation of the new global economy, and have strategies in making the transition from dependency on the industries of the old economy (90% income from oil) to a leadership in the industries of the new manufacturing economy. The old ways of life -- oil and contract must pass on for the manufacturing economy to take hold. For this candidate, the issues of talent, technology, and innovation are direct and personal. Nigerians cannot accept “my fellow country men” as a leadership speech. That is an old one, tell Nigerians something new – that is the stuff entrepreneurial leaders are made off, to be innovative. The question is, “What is it that the leadership will do differently that Nigerians have not seen or heard before?”. If a candidate says resource control, ask, “What percentage; and how that percentage will help accomplish the vision 2020?”. If a candidate says national conference, ask, How can national conference help to achieve the vision 2020?”. If a candidate says change the constitution; ask, “How, and how can that help in accomplishing vision 2020?”. If a candidate cannot answer these questions to your understanding and satisfaction, the candidate will not know how to do it and may try to pull a wool over your eyes. Let the candidate know that you are not fools.
The manufacturing economy changes what it means to be a leader.
The new requirements of leadership in the manufacturing economy are very different from the old ones. In a manufacturing economy, the right kind of leader must accept the responsibility for articulating and making manifest a clear vision of what Nigeria is all about. That means not only where Nigeria is going but also how Nigeria is going to get there. The leadership has to articulate specific goals, a rough prioritization of work, and a time frame for achieving those goals that everyone can understand. The goals, of course, have to be consistent with the values, and the goals should be in line with the vision that the entire nation is pursuing. At Nigerian Entrepreneurial Leadership, we believe that Nigeria can accomplish vision 2020 --- where 60% to 90% college and university graduates can be productive either through employment in an organization or self-employed entrepreneurs. To accomplish vision 2020 in the manufacturing economy, the role of government is to create an environment in which change occurs, the marketplace adjusts, entrepreneurialism is strong, and people are willing to take risks. Public policy in the manufacturing economy ought to be based on less interference; on innovation, encouragement of the private sector; and on a civil-justice system that is fair and balanced. Public policy ought to create an environment in which capital moves to support entrepreneurial efforts. Fundamentally, the next Nigerian president must have Manufacturing Economy mentality. He or she must be very articulate on how he or she will move the nation into a manufacturing economy. He or she may not be able to predict with any accuracy where the country is headed, but can accurately predict some of the consequences of the manufacturing economy: better productivity, jobs, and better standard of living resulting to a better social and political interactions among various ideologies. A leadership that is slow in response to the innovations of the manufacturing economy must give way or eventually will be affected by the demand for a entrepreneurial friendly leadership. The manufacturing economy is results-based, therefore, the need for the leadership to talk in numbers – how many manufacturing skilled jobs, factories. The question in the manufacturing economy is not, "What is the process?" In the manufacturing economy, the question is, "What are the results?" We must apply the manufacturing-economy thinking to education, where it is not the idea of going to school, but the result – a diploma. Public policy must focus on results: "Here are the results that we want. Now, redesign the system to get them." Nigerians are asking for a more productive nation, resulting in jobs. If you think you are smart enough and has what it takes, then redesign the system to create jobs. The manufacturing economy will change the politics of Nigeria. Any hopeful who is blind to this should be happy with the title: ex-candidate, while any hopeful that is awakened by the manufacturing economy, and pursue it, will be happy with the title ex-president.
Cletus E. Olebunne Executive Director Nigerian Entrepreneurial Leadership © 2005
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