Becoming a magnet for manufacturing — How African countries can move beyond just sales and marketing
I will always remember our discussion of Intel Corporation’s decision to open its semiconductor plant in Costa Rica in 1996 as an eager MBA student at Thunderbird School of Global Management in 2003. Although the plant was closed in 2014 due to the increasingly difficult global environment in which the company operates, the case study still presents some compelling lessons. Below is a direct quote from a report published by the World Bank in 1998 and reproduced in the book, “Global Lifelong Learning in the Global Knowledge Economy: Challenges for Developing Countries.”
“In 1996 Costa Rica beat out Brazil, Chile, Indonesia, Mexico, the Philippines, and Thailand to become the site of Intel’s $300 million semiconductor assembly and test plant. Many factors made Costa Rica attractive to Intel — its stable economic and political system, its liberalized economy, a growing electronics sector, and incentives and tax breaks — but the crucial factor in securing its selection was it educated labor force.
Since 1948, when democracy was restored, Costa Rica has placed strong emphasis on education, adopting a demand-driven approach. The government invested heavily in education and technology training, and it adopted a bilingual ESL (English as Second Language) curriculum. Computers were introduced into elementary schools as early as 1988; by 1996 many schools were equipped with them.”
The positive correlation between high quality education and growth
Research has shown that a positive correlation exists between high educational achievements, the quality of a nation’s labor force, and ultimately sustained economic growth, income generation, and development. According to Psacharopoulos and Patrinos (2002), “an additional year of schooling increases incomes by 10%, while in very poor countries it can increase incomes by 20% or more.”
As noted by Ricardo Hausmann, the renowned economist and Harvard Professor, in a 2010 study, “Countries with few capabilities will be able to make few products and will have scant benefits from accumulating any individual additional capability. By contrast, countries with many capabilities would be able to produce many new products by combining any new capability with different subsets of the capabilities they already possess.” Dr. Hausmann further explains that, “comparative advantage evolves by countries moving from existing goods to “nearby” or related goods. The ability to add products to a country’s production set largely depends on the number of capabilities present in the country.”
African countries would therefore be best served by investing in building their capabilities to strengthen economic diversification and gain a comparative advantage in key sectors that will drive job growth and income generation.
In addition, in the knowledge economy, “once countries achieve literacy rates of 40% they can accelerate economic growth by opening their economies to technology transfer.” This is what Costa Rica did; which ultimately resulted in their selection by Intel.
It perhaps also explains why a number of companies and start-ups are flocking to Rwanda. UNICEF Rwanda reports that “Rwanda is one of the top-performing countries in sub-Saharan Africa in education, having achieved Millennium Development Goal (MDG) 2 for access to Universal Primary Education, with a net enrolment rate of 97.7per cent (boys: 97.3%; girls: 98%) (MINEDUC 2016). In terms of gender equality in education, Rwanda’s education system boasts the highest participation rates in East Africa as well as gender parity in net and gross enrolment at the pre-primary, primary, and secondary levels.”
The country further embarked upon an ambitious program of curriculum reform, which culminated in its transformation into a competency-based curriculum that extends from pre-primary through upper secondary school. Its vision is to transform the economy into a knowledge-based one by 2020, better equipping children with the skills and competencies they need to fully participate in its future labor market. Finally, the government’s adoption of technology and promoting innovation creates positive externalities in strengthening the quality of the tiny nation’s labor force.
Push for Nationwide Human Capital Development, including rural areas
Other African countries should learn from these experiences to seriously tackle the issue of human capital development. They must be dogged in pursuing real transformation in the education sector. Overhauling the existing curriculum is a crucial first step; which must be closely followed by significant improvements in the quality of instruction and in the utilization of technology and teaching aids from the early years. Moreover, the quality and number of teachers from the primary through to the tertiary levels must be strengthened, and not only in urban areas. Countries need to figure out how to deploy teachers en masse to underserved rural communities. The local governments obviously sit on the frontline in this regard.
How the Visiola Foundation complements public education
The Visiola Foundation, through its partnership with the FCT Secondary Education Board in Nigeria, works to improve educational outcomes for students attending public schools to help them learn valuable skills, embrace technology, and become employable. Our After-School STEM Clubs for Girls (ASCG) program has worked in 15 Government Secondary Schools across the Federal Capital Territory since 2016 teaching Robotics, Science, Engineering, and Computer Programming to 950 junior and senior secondary school girls. This guiding principle also informs our diverse camps that teach girls and young women about science, technology, engineering, and math (STEM), while building their confidence and interest in the STEM fields. We focus on girls in order to bridge the wide gender gap in the STEM fields, while directly tackling the limiting cultural stereotypes and barriers.
Since 2015, the Foundation’s STEM Camps have exposed 155 teenage girls in Ghana and Nigeria to the STEM fields. Students have been taught how to code, build robots, conduct scientific experiments, and build renewable energy prototypes. Partners and sponsors have included Schneider Electric West Africa, Young Engineers Nigeria, Intel Semiconductor West Africa, and Cargill Corporation.
The Foundation’s widely publicized Coding Boot Camps and Workshops in Abuja, Enugu, Ibadan, and Lagos have taught over 160 young women how to code and build mobile applications. Students have gone on to complete internships at Quanteq Technology Ltd., while others have secured better paid, full-time jobs and freelance opportunities. The camps have been supported by tech companies, including Google Corporation and Cellulant Nigeria.
There is a lot of work to be done but with the right type of leadership focused on building human capital, countries can indeed become magnets for manufacturing as Rwanda, Costa Rica, and others have shown.
