national centre for technology management (n a c e t e m) federal ministry of science and...

NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)Federal Ministry of Science and Technology, Nigeria

N A C E T E M… Managing Technology for Sustainable Development © NACETEM 20111



NATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)Federal Ministry of Science and Technology, NigeriaNATIONAL CENTRE FOR TECHNOLOGY MANAGEMENT (N A C E T E M)Federal Ministry of Science and Technology, Nigeria

Willie O. Siyanbola, PhD (Sussex), FMSNDirector-General/Chief Executive

National Centre for Technology Management

POLICY GUIDELINES TO SUPPORT POLICY GUIDELINES TO SUPPORT INDUSTRIAL DEVELOPMENT IN INDUSTRIAL DEVELOPMENT IN

AFRICAAFRICA

Being a paper presented at the launching of African Inter-Being a paper presented at the launching of African Inter-Parliamentary Forum on Science, Technology and Innovation Parliamentary Forum on Science, Technology and Innovation

(AIPF-STI ) on 4th of May, 2011 at Addis-Ababa, Ethiopia (AIPF-STI ) on 4th of May, 2011 at Addis-Ababa, Ethiopia





Outline of Presentation

• 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





Preamble

3





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





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.





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





Status of Africa’s industrialisation

7





AFRICA

Area

30,221,532 km2 (11,668,598.7 sq mi)

Population1,000,010,000[1] (2005, 2nd)

Pop. density

30.51/km2 (about 80/sq mi)

Demonym African

Countries54 (List of countries)

Languages List of languages

Time ZonesUTC-1 to UTC+4





Sources of Contribution to GDP in Africa

05

1015202530

Sources of contributions to GDP In Africa

Source: McKinsey Global Institute Analysis: 2010





Contribution of manufacturing to the GDP in selected African countries

Source: www.earthtrend.wri.org Access 28th April, 2011





Why low Manufacturing contribution to GDP?

• 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





Industrialization and the Innovation System

12





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




N A C E T E M… Managing Technology for Sustainable Development © NACETEM 201114Adapted from Tiffin,1997Adapted from Tiffin,1997

A typical structure of National System of Innovation (NIS)





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





Global Practices: Lessons for Africa

16

• China• India• Brazil





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





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





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





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





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





Brazil’s strength

• Credence to innovation bill since 2002• Increased R&D spending





Incentives for Industrialization in Brazil

Source: IEDI (2010), Desafios da Inovação - Incentivos para Inovação: O que Falta ao Brasil





The Industrial Policy in Nigeria

24





Objective of Industrial policy in Nigeria

• 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





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

Research Institutes - 75

Primary Schools – 50,741

Enrolment - 20,951,818

Secondary Schools – 11,010

Enrolment – 5,422,611

(Source: NBS, 2005, 2010)

Public – 14607 and Private – 9034•Primary – 20,278•Secondary – 3,303•Tertiary – 60(Source: NBS, 2005, 2010)FundingBank of Industry (BOI)Nigeria Agricultural, Cooperative and Rural Development Bank (NACRDB)Micro Finance BanksGovernment AgenciesDevelopment PartnersVoluntary agencies -?

Major Agriculture Products:groundnuts, cocoa, and palm-oil, coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane.

Occupation/Cottage Enterprise:Farming, cattle and sheep rearing, Lumbering, Palm Wine Tapping, Gin Distillery, Palm and Groundnut Oil Milling, Fishing & aquaculture activities, Blacksmith, Bronze casting, leather tanning, Weaving, Canoe Carving, Aluminum casting, and Trading

Facts File on Nigerian Economy





MANUFACTURING VALUE ADDED (% GDP) IN THE NEXT-11 COUNTRIES, 2005

Utilizing STI for Development (c) 2010 W. O. Siyanbola [email protected]





INDUSTRIAL CAPACITY UTILISATION (1980 – 2003)

Source: Plotted with figures from

CBN, 2004

Industry utilising below 45% of installed capacity most of the time






INDUSTRIAL INNOVATIVENESS IN NIGERIA


Source: NACETEM, 2009bSource: NACETEM, 2009b





OBSTACLES TO INNOVATION IN NIGERIA

Source: NACETEM, 2009bSource: NACETEM, 2009b





How do we get there in Africa?





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)

•Develop critical industrial infrastructure•Adoption of industrial ecology

Policy Guidelines and Recommendations





Policy Guidelines and Recommendations

• 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• Etc...





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