Tapping into our unique strengths

Submitted by Boko on 24 June, 2006 - 01:21.

Sunrise

The typical African water cooler banter often goes; "the economy is the problem, if we fix the regional economics, everything else will fall in place... No, we need to fix everything else and then the economies will snap into shape ..." sound familiar? The sheer volume of these randomly divergent views, shapes the archetypal entropy of the SSA world. Seemingly endless circular arguments or circulus in probando in Latin.

Classical economics defines the factors of production as Land, Labor, Capital. Leveraging any unique features in either one these factors is sure to spur production and economic growth. Post colonial economic progression  in SSA also exhibits some fairly strong correlation per the exploitative sequence of these factors in the classic notation. First, Land -- representing natural resources; oil, minerals, etc., several of these occur in unique patterns and quantities all over SSA, and the countries have simply continued to run their economic engines on a single cylinder of their natural resource, eagerly catalyzed by clearly insatiable western demand, and dubious brokerage. And now, in the current knowledge economy, Labor has been redefined as capital -- Human capital. Human capital can be cultivated, nurtured and augmented via skills acquisition and training. Suffice to say; SSA is only just awakening to the consciousness of achieving economic progress via skilled labor or enhanced human capital. Lastly, ease of access to financial capital/monetary facility to the SSA average joe, exist only in intricately worded academic tomes -- for now.

Then I came across Forest Baker's commentaries on Forbes online. When Forest speaks, you have to listen! I approached Forest and asked him to take a look at our work on the CIPESA site, and much to my surprise, he agreed. His response was, once again, vintage Forest, and had me mulling over the different permutations of unique sub-Saharan skills and ICT as well as all the other industries out there.

Here's full text of Forest's response:

"I see that you are [...] focused on
communication technology.  Of course, this is vitally important as people in your
region become more directly involved in economic globalization.  I, myself,
managed here in Silicon Valley since 1988 but now have my own business. 
   
 The best hope for any developing nation seeking to improve the lives of its
workers is to enter industries that convert high quality, low cost labor into
dollars (euros, yen) by "creating wealth" (raw materials processed across
productive resources) and "exporting" the finished goods.  Businesses that afford
a premium for hand-made quality will be best.  If your country then becomes
recognized as the best source in the World for such goods then industry players
from all over will show up and your workers will be urged by these foreign buyers
to launch their own small companies.  It is important that hand-made counts
because one cannot expect your workers to have the capital, when they start out on
their own, to invest in machines.
   
By "hand-made" we  do not mean "village arts" or the tourist trinkets that are
normally made in all countries, even in the United States.  These things are
inexpensive with little profit and no global, competitive traction.   Instead, we
are looking for "high-margin" businesses making goods the World markets are
consuming at a premium.  The best idea is to manufacture with very high quality
raw materials in what is normally a "labor intense" (high labor cost) process that
can be reversed into a "material intense" process by doing the work in your
low-cost labor market.  If your best "direct labor" workers (we are not talking
about your educated professionals) are not able to leave the country to find work
in a place like Saudi Arabia, for example, then the quality of your workers will
be "better" than the average factory worker in the country where such things are
currently made (Germany, for example).
   
Probably this model means that the raw materials are expensive and must be
imported.  If your local raw materials are the best in the world and if your labor
is also cheap, then it is very likely that such hand made components or finished
goods for export are already made there.  You want to maintain your competitive
advantage while you launch your business by being the only party in your country
able to do your work.  If you are not using machines, then the only other factor
of production that you might have exclusively for a time is the imported material.

You should never hold onto your workers exclusively and you do not want to.  When
the world comes calling, you want your workers to strike out on their own or to go
work for someone who will pay them more.  You want an industry in  20 years with
fifty+ medium size shops (employing 10-25 workers each) owned by the workers who
you originally trained.  And some larger studios financed by your nation's
ex-patriots who have now returned from America, etc.
   
At my shop in the Philippines we design and manufacture high fashion, leather
handbags and small luggage pieces completely by hand using no machines at all with
imported raw materials.  All of my production is exported to the United States and
I now have my own retail boutique in an elite shopping district.  We have been
doing this for 3 years and have had the retail shop for 1 year.  The idea is to
have the smallest, profitable and sustainable business possible and then to grow
from that strength.  We achieved this milestone several months ago.  Without
investors.
   
We are competing against the high-end Italian fashion houses who are now too large
and successful to produce their designs by hand.  If we tried to compete with the
Chinese in the high volume, low cost arena, we would never succeed.  But the
Italians can be beaten!    
   
I developed a manual technology whereby we construct these items without any
sewing at all.  We pretend that the needle has not yet been invented.  If we
maintain this design idiom as we grow then we can never automate production with
sewing machines.  I will insist that we simply hire and train more workers.  Today
we have only 10 full time workers.  But my company is earning dollars (instead of
pesos) so the guys are somewhat overpaid (for the Philippines) and they are the
only 10 people in the World who know how to do this work! 
   
Fashion handbags make a good business.  But there are lots of good industries out
there in the big world."

Submitted by icezig on 19 November, 2009 - 04:25.
Submitted by markweee on 19 November, 2009 - 06:37.
For now, information flows in trickles, but as soon as we start hitting critical mass in the frequency and volume of information flow, then knowledge uptake increases, education will become richer, more dynamic and more purposeful. And then we should begin to see more progressive and sophisticated indigenous knowledge-based systems as well as much more empowered technology societies of SSA. Online accredited High School AND Adison High School
Submitted by markweee on 19 November, 2009 - 06:37.
Do you believe the world is a closed system with limited volume of resources that must be shared by citizens of the world OR would you rather accept that the world is an open system with infinite resources and infinite capacities to continuously create new wealth? Online GED AND homeschool online AND Accredited High School
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Submitted by myrarosepao on 5 May, 2010 - 16:14.
It was so nice to hear about your success story, well i was thinking of selling ready made fashion also, but my plan is to ship them from Bangkok to our country(Philippines). But up to now, i still dont have any idea on how to do that. I was told to come and shop in Thailand and just bring the stuff here to sell. Well, trying to learn more about this kind of business, Im happy for you though. jacksonville beach cosmetic dentist