«ANSA Alternatives to Neo-liberalism in Southern Africa The search for Sustainable human development in Southern Africa Editors: Godfrey Kanyenze, ...»
This proposed alternative is built upon what has been termed "self discovery".44 The approach that we are going to suggest is more holistic, but uses self discovery as the starting point. We will briefly present what self discovery entails and then introduce changes to this approach that we feel are appropriate to enable the Southern African region, and indeed Africa at large, to harness and utilise science and technology for development that fulfils the aspirations of its people.
6.1 Information externalities According to the discovery approach, most significant productive diversifications are a result of the concerted action of government and of public-private sector collaboration. This has been demonstrated in the experiences of the South East Asian countries dealt with above. It is equally true for Latin American countries.
To support this position, Rodrick cites examples to show that countries with nearly identical factor endowments specialise in very different types of products.
"Bangladesh exports millions of dollars worth of hats, while Pakistan exports virtually none. Conversely Pakistan exports tons of soccer balls, while Bangladesh lacks a significant soccer ball industry. At a different level of income, Korea is a world power in micro ovens and barely exports bicycles, while the pattern is reversed in Taiwan. It is impossible to ascribe these patterns of specialisation to comparative advantage. They are more likely the result of random self-discovery attempts, followed by imitative entry." (Rodrick 2004).
Reference is also made to the cases of garments in Bangladesh, cut flowers in Columbia, information technology in India and salmon in Chile (with the state acting as the entrepreneur in the last case).
Discovery entails entrepreneurs experimenting with new product lines to identify (discover) new activities that can be produced at a low enough cost to be profitable. According to the proponents of this approach, discovery does not entail coming up with new products or processes, but "discovering" that a particular good that is already traded on the world market, can be produced locally at low cost. This may involve modifications of foreign technology to adapt it to domestic conditions. but For a detailed exposition on this approach, see Hausemann and Rodrick (December 2003) and Rodrik (September 2004) such minor changes normally would not qualify to be patentable and therefore cannot be monopolised.
Discovery is an activity that has great social value, but it is poorly remunerated because if successful, other producers will also engage in the new activity while the cost of discovery is borne by the first entrepreneur.
This is a market failure arising from what Rodrick calls "information externalities". The fruits of acquiring information that enables discovery are available to other entrepreneurs. Therefore to deal with this type of market failure and to encourage the process of discovery, government should provide incentives to the initial investor only (to protect the rent) that can take the form of venture capital or trade protection. Besides this carrot, there should also be a stick. The incentives should be subject to performance reviews. East Asian countries had a good balance of the carrot and stick. On the other hand, Latin America had too much carrot and too little of the stick – and hence the inefficiency in their industries.
6.2 Co-ordination externalities Discovery is often constrained by the fact that many projects require simultaneous large-scale investments for them to be profitable. Profitable new industries may require upstream and downstream investments for them to take off, but this may not occur in the absence of co-ordination.
This type of market failure has been termed co-ordination failure. This coordination failure model places a premium (co-ordination externalities) on the ability to co-ordinate the investment and production decision of different entrepreneurs. Once the necessary investments are made simultaneously, all of them end up being profitable. Under these circumstances, it is unnecessary to give subsidies to one particular firm at the expense of the other, because it has no benefits, unless there are additional reasons. The trick is to have these investments made in the first place. Government can use investment guarantees to overcome the co-ordination failure. President Park of South Korea used this approach and provided investment guarantees to large conglomerates that invested in new areas.
Policies aimed at overcoming information and co-ordination failure should be targeted on activities e.g. a new technology, specific training, a new good or service as opposed to sectors. It is important to emphasise that it is new activities that need support.
The discovery approach emphasises the need to focus on the policy process as opposed to outcomes. It advocates a close relationship between government and the private sector so that the two can come together and solve problems in the productive sector, learning about the opportunities and constraints faced by each other. Both the firms and government need to learn the underlying costs and opportunities and engage in strategic co-ordination.
The alternative approach that we are proposing, takes the science and technology policy making process as the foundation upon which strategies can be developed to harness a nation’s science and technology for the benefit of the majority. This foundation has to be right if the development agenda is to benefit the majority. The discovery approach recognises the importance of interaction between government and the private sector to solve common problems but does not give any explicit consideration to the interest of other social players.
The policy making process is the starting point in the alternative approach that we are suggesting because policy making and implementation is not a neutral technical exercise that should be the preserve of politicians supported by their technocrats. Policies usually reflect the desire to protect or promote the interest of either the ruling elite or the dominant forces in society that have influence over, and/or interests coinciding with those in power. More often than not, such interests collide with those of the majority. The responsibility for change with regards to the role of and utilisation of science and technology for the good of the masses cannot be exclusively left to government and government salaried technocrats. The stakeholders referred to in section 2, and more important, in addition to those stakeholders, the "people" must be involved in shaping their destiny. The confinement of policy making to government for the benefit of the people, presupposes the existence of a "development state", which tends to be more of an exception than the rule in Africa and beyond.
Taking cognisance of the above, the alternative strategy proposed requires that an institutional framework be established, covering all stakeholders (not just private enterprises, in accordance with the discovery approach), to contribute to the science and technology policymaking process. It is worthwhile to indulge in repetition and emphasise that stakeholders are all those affected by science and technology policies, that is the various interest groups/institutions referred to earlier on, and the people at large.
A question that arises is who should be responsible for creating that framework? Of course national governments can take that initiative if they come to realise the importance of such a framework. In actual fact there are benefits to politicians in taking such an approach because the voting public will have ownership of whatever strategies and programmes are adopted and implemented. If such strategies fail, there will be collective responsibility, avoiding a situation of saying "they always make mistakes" moving towards "we made mistakes, lets correct them".
However, it may become necessary for such an initiative to be taken outside government, but at the same time, it is critical to involve government, since this is where policies will be adopted or negated. A practical example is the case of the Science and Technology Policy Dialogue Forum in Zimbabwe (S&TPDF-Z). The S&TPDF-Z was a science and technology policy advocate forum organised by the Institute of Development Studies of the University of Zimbabwe through a project conducted under the auspices of the Africa Technology Policy Studies network and funded by the Carnegie Corporation of New York.
Box 1. The Science and Technology Policy Dialogue Form in Zimbabwe
The forum conducted nation wide provincial seminars and seminars for policy makers and government officials, firstly to conscientise all stakeholders on the importance of having a national policy on science and technology. In terms of geographical coverage, the forum consisted of chapters in all the provincial capitals of Zimbabwe. Most of the provincial chapters had a secretariat housed in the Provincial Administrator's office. In the case of Harare, the Provincial Chapter Secretariat was housed at IDS – University of Zimbabwe. Besides the provincial chapters, several working groups were established along sectoral and thematic lines e.g information technology, biotechnology (thematic), industry and trade, agriculture and health (sectoral).
After lobbying for the formulation of a national science and technology policy and concurring with government on the need to proceed with efforts in this direction, the science and technology policy dialogue forum conducted another round of provincial seminars. This time the purpose was to undertake consultations and solicit inputs from provincial chapters on the nature of issues to be addressed by a national science and technology policy.
The provincial chapters consisted of a broad range of stakeholders, including the labour movement, some community leaders, NGOs involved in science and technology promotion and civil society organisations. This is in addition to the stakeholders constituting what has been termed the national innovation system.
The science and technology working groups had representatives from the provincial chapters. These were technical groups in the sense that they were responsible for writing the draft science and technology sectoral and thematic papers that were to be consolidated into a single national science and technology policy. These draft papers were discussed at provincial and national level.
The S&TPDF-Z successfully advocated for and contributed to the production of a national science and technology policy for Zimbabwe. The box on the previous page provides the organisational form and activities conducted by the forum.
The S&TDF-Z is a practical example in which a framework was established to involve the people in contributing towards a national science and technology policy. Variations of this approach can be made taking into consideration the specific conditions prevailing in each country, but the underlying principles of involving the people are what this alternative approach is advocating. In the approach that we suggest, the starting point is a process of consultation within a framework such as the example provided above. The objective of such consultation is to identify the needs and aspirations of the people, but beyond that, such consultations should also solicit possible strategies for addressing those needs and meeting the aspirations. More often than not, the technical "solutions" drafted by technocrats fail to take advantage of valuable knowledge – indigenous or other wise – within communities, especially rural communities.
There have been cases where governments in the Southern African region have built factory shell and technology incubators for SMEs, and these have remained shells with no entrepreneur wanting to take them up, yet the SMEs actually require such factory shells. Cases such as these occur because of lack of a complete consultative process.
An important character of the consultative process is that it should not be compartmentalised i.e. government moving from one point to another consulting the different actors such as SMEs, commercial farmers, communal farmers and labourers. An appropriate forum is one that eventually brings together all these players.
On the basis of the aspirations of the people, a common national vision should be drawn up. The activities to be undertaken by the different stakeholders to attain that vision should be identified. The role of science and technology in enabling the various actors to "fulfil" their task is then defined. Most likely, these will be activities to be undertaken simultaneously feeding one into the other with the likely creation of a virtuous circle as opposed to a vicious one. The general guiding principles should be the desire to address regional economics by creating linkages between agriculture (be it communal or commercial) with SMEs through activities such as agro processing and metal working industries for example. There is also a need to link the SMEs with large industries.
The discovery approach is interesting in that it places emphasis on the reliance on well-established technologies that are readily available but no longer patented. There are opportunities in this area as reflected by the experiences of countries such as China. China is buying antiquated, disused machinery from Western countries at negligible cost. The ANSA concept paper gives an example of the capstan lathe machine that used to cost US $100 000.00 some 15 years ago and can now be purchased for $100 on the auction floors of Europe. Such machines produce quality that is comparable to that produced by computerised technology. The technology was discarded because of the high cost of labour in Europe, but when the Chinese purchase and assemble the discarded machinery, it is used to produce quality products and out compete the West on their own territory because of their relatively low wages. This is indeed "self discovery".