Boost Africa’s economy with knowledge

Given desperately scarce economic, human and knowledge resources, African and South African universities will have to play a bigger developmental role than they currently do.

In our globalised world, knowledge has become the driving force of economic development. Knowledge is produced to a large extent at higher education institutions. African countries have an almost impossible catch-up game to play to acquire the kind of knowledge necessary for economic prosperity.

Given the immediacy of the need for development and African countries to become successful knowledge societies, the responsibility of universities to spearhead the “development of sustainable and peaceful knowledge societies” – as Andris Barblan, former general secretary of the Magna Charta Observatory on Fundamental University Values and Rights, in Bologna, put it – ­cannot be overstated.

Higher education should be a catalyst in narrowing the gap between developing and African countries and the West.

Unfortunately, most African and South African universities have played roles largely as outsiders: they conduct research and teaching removed from both industry and government, and from the nitty-gritty of national and regional ­economic development.

South Africa and Africa need developmental universities and other higher education institutions. For a start, as part of becoming developmental institutions, they must make an assessment of the kind of human, social and economic resources ­available in the region, and review traditional industries.

African higher education institutions will actively have to research what needs to be done to make ­current African industries globally competitive, develop new production chains around them, develop new strategic sectors, introduce value-added services and find avenues for beneficiation.

The high economic growth rates achieved by many African countries in the past decade have been based mostly on exporting one raw material, metal or commodity, which brings few jobs, does not reduce inequality and poverty over large fronts, and mostly enriches only small ­ruling elites.

African economies urgently need to use the proceeds of one dominant commodity to upgrade and diversify their economies, initially starting new industries related to the resource. South African and African higher education institutions must lead the charge in coming up with new ideas, research and innovation to help their countries to diversify their economies as quickly as possible.

One way for South Africa and Africa to step up development is to create regional growth poles based on industrial clusters – bringing companies in a region producing similar products, their supply chains and support industries together with higher education institutions. These industrial clusters would be based on the key resources in particular regions, whether platinum, oil or agriculture, and on the human, social and economic resources available.

The idea is to turn the initial dominant sector into multiple related new industry clusters, and add value with new industries. Higher education institutions in South Africa and Africa can devise the appropriate industrial clusters for specific areas within regions, creating a network of exchange between the different actors – companies, governments, labour and communities.

In many of the successful industrial clusters in Europe, the United States and Asia, the “mediator” in the industrialisation process has been local, national or regional government. However, higher education and research institutions in Africa have to take on the role as mediators in industrialisation, especially given the slackness of many African governments.

This means that higher education will have to position itself strategically between government and industry, to influence both, and to steer the trajectory of economic development in the region.

Higher education and research institutions will have to communicate better with governments and industry, to explain the innovations produced in research, their value and how they can be used or adapted for industry.

The region is home to abundant and diverse wildlife and unspoiled nature, which could be the basis of potential wildlife and marine clusters. The challenge is to conserve these resources, and leverage them in a sustainable way to create decent jobs in partnership with communities.

The region also has vast mineral wealth, but has so far been unable to use this as a source of broad-based poverty alleviation, job creation and economic prosperity. Instead, mineral wealth has often become a source of instability and conflict, benefited a small elite or been exported. Africa is crying out for more sustainable mineral clusters.

One of the major problems confronted by the region is food insecurity, despite rich soil, abundant water and excellent weather. Agriculture and rural clusters are an obvious solution: they would link Africa’s small-scale farmers in the rural areas to the supply chain of major retailers – as is done in Japan and South Korea.

Africa has an energy deficit, despite having vast sources of natural power, including hydro, solar, wind and geothermal. The region has the potential to play a leading role in developing green technologies and energy that would narrow the development gap. The region’s climate and geography make it ideal to use more sustainable energy sources, such as solar and wind.

Africa imports most manufactured goods. The potential is huge, but unexploited, for African countries to expand and diversify their manufacturing sector, specialising in specific products, and trading these within Africa. Africa itself is a substantial market for indigenous manufactured goods, as well as goods from the informal and small business sectors.

Most of the economic activities, whether in the urban or rural areas in African countries, are in the informal sector. This is an area often neglected in academic circles (and the mainstream economy), although many people depend on it. It is crucial to find ways to bring the informal sector, both urban and rural, into the supply chain of private and public companies, as – once again – happens in Japan and South Korea, where, for example, families working from home make components that go into the making of a motor vehicle.

Higher education institutions must provide innovative ideas focusing on how to bring those in the informal sector into the supply chains of private- and public-sector companies.

African countries need growth coalitions between business, government, organised labour, civil society and communities, in the form of developmental coalitions for growth, where these different constituencies agree at factory, mine or sector level to grow industries, with each social partner agreeing on compromises that help to foster growth, job opportunities and wealth creation. Higher education institutions could broker such growth coalitions.

To play a greater developmental role, we need to reform higher education institutions in the region. Traditionally in Africa, these institutions have either been pressured to focus on so-called “relevant” research as defined by governments, or controlled by businesses or foreign donors who insist on specific focuses as a condition for funding. Higher education will have to be more assertive vis-à-vis all these forces, and set the agenda rather than follow others.

Some practical steps for higher education institutions in the region to facilitate industrialisation could include identifying areas of specialisation themselves. Some could be aligned with clearly defined industrial clusters that have specific comparative advantages in natural resources, economic activities and human resources.

Universities and researchers often have vast global networks, which could include important allies in the campaign to develop the region, based on its specific historical endowments and the global supply chain.

South African and African higher education institutions must strengthen existing relationships with similar institutions in developed countries in a much smarter way, and establish new sustainable relationships with emerging markets – especially those in Brazil, Russia, China and India.

William Gumede is associate ­professor at the University of the Witwatersrand’s school of governance, chairperson of the Democracy Works Foundation and author of Restless Nation: Making Sense of Troubled Times (Tafelberg, 2012)

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