Lessons from China and India on closing the skills gap and creating local jobs

Every time I visit India, the number of local products used by Indians in their day-to-day activities impresses me. From textiles to motor vehicles, Indians are loyal to their own products.

In Kenya, however, one would hardly see local products in use even in places that should be encouraging local consumption of goods and services.

This difference in approach to development could be our Achilles heel in our efforts to become an industrialised country.

The general affinity Africans show for foreign products can be explained by, among other concerns, the low quality of locally produced goods and services, poor skills development and lack of awareness about available products.

Many of the newly industrialised countries (NICs) developed on strong local markets, something India is practising with success.

Mahindra and Tata vehicles may not have been among the best when they were introduced but Indians stuck with them, enabling the manufacturers to go through a learning curve and to improve the products.

LOVER FOR THE FOREIGN-MADE

Today, Tata Motors especially can effectively compete with any heavy-duty vehicle manufacturers anywhere in the world.

Many remember the introduction of the Hyundai Pony in Kenya. It was a contraption of some sort but it was popular in Korea.

Over the years, Hyundai has improved the engineering of their vehicles to the extent that the company was one of the major sponsors in the just concluded World Cup.

Malaysians, too, struggled with their Proton, which incidentally started production after Kenya attempted to produce the Nyayo car.

The Nyayo car failed not because we could not replicate what other nations had done but because we ridiculed it and compared it with Toyota, which had been manufacturing vehicles for decades.

The government caved in to pressure and abandoned the project and today Kenyans import Proton from Malaysia and Tata and Mahindra from India, supporting employment in those countries.

Meanwhile, our people are very proud of their German and Japanese cars, which they drive with pride as they pass local unemployed youths. Sadly, they cannot make the connection between their luxury and wanton unemployment.

THE HAZARD OF MITUMBA

We once made great progress in the textile industry to the extent of exporting but that too was run down.

The ginneries closed as farmers abandoned cotton farming. The cotton industry and the entire nascent textile industry was politicised to camouflage imports of used clothing.

Used clothing, or mitumba, has become a major industry that contributes nothing to the local economy.

It contributes no skills, no manufacturing capacity, and no income to farmers.

It has, however, taken a new dimension, with rich exporting countries now undermining Africa’s determination to build a textile industry (read Rwanda) that will create jobs and reduce poverty.

Yet, the Continental Free Trade Area (CFTA), if it doesn’t turn out to be another dud, is to leverage the new initiative to foster Africa’s industrial development for greater economic growth and eventually deal a major blow to the continent’s twin problem of poverty and unemployment.

Since the CFTA was signed, hardly anything has happened to signal the start of this important initiative that has eluded Africa for several decades. Instead, Africans are trooping to Asia to import all manner of goods.

SKILLS DEFICIT

The big question is: How do we get to like our own goods and services? What sacrifices are we willing to take, as Korea did and as India is doing now, in order to build a vibrant manufacturing sector?

We must learn about India and China to get the inspiration to move masses out of poverty.

With more than 2.4 billion people, the two countries have risen economically at unprecedented rates.

Some economists attribute their growth to globalisation, in what renowned economist Joseph Stiglitz calls the closer integration of the countries of the world as a result of lower communication and transportation costs and reduction of manmade barriers to movements of goods, services, people, capital, ideas, and knowledge.

With one billion people, Africa should be emulating China and India. Unfortunately, many studies point out that Africa lacks the resources, technology and necessary education to take advantage of new opportunities.

For example, even as Kenya prepares to launch major housing projects under the Big Four agenda, there is an acute shortage of artisans.

The skills deficit is a major problem not just for Kenya but many sub-Saharan countries. Yet unemployment continues to soar. Similarly, the manufacturing sector will encounter a skills gap as China sheds more jobs to other countries like Vietnam and India.

TECHINCAL TRAINING

Without deliberate policy measures, it will take Africa many more years before it can competitively take advantage of emerging opportunities. This is because there aren’t many young people willing to study technical education. Many want courses that will likely take them to non-existent white-collar jobs.

To create employment, therefore, there must be a deliberate plan to develop the skills not just for the country but the region.

In my view, what I would call my theory, it is not just the government that should take blame in our apparent failure to exploit opportunities in Africa.

Opportunity exploitation is a product of individual decisions, culture and context, especially the role of government in encouraging citizens to take advantage of opportunities around them.

The dynamics at the individual level are influenced by culture and policies that the government favours.

If, for example, society accords greater respect to anyone who earns a living from work of any kind, individual decisions on what job to take up will not be discriminative, as they are at the moment.

The same will happen if government policy favours technical training as a strategy to fill the skills gap in artisanal work.

CHANGE IN ATTITUDE

The Higher Education Loans Board should, for example, shift its priorities to areas that have the greatest skills deficit and provide incentives to young people to consider technical programmes.

With such interventions, there will likely be a change in attitude to exploit talent and get young people to have the right skills to improve product quality and compete with the preferred foreign goods.

There is also the need to start a massive campaign to educate Africans on why buying local goods matters. Most people complain about poverty but have no idea that they are part of the problem.

A state corporation like Brand Kenya should take this as part of their mandate, and companies that buy certain local products should be given a tax incentive.

We are all part of the local economy and if the resources have to trickle down, we must keep these resources here at home.

We have perhaps the best conditions to grow oranges locally but if you visit local stores, much of the fruit comes from the Middle East and South America.

Recently, when Interior Cabinet Secretary Fred Matiang’i questioned a foreign national what he could bring to Kenya as a mason, little did the minister know that there is a skills crisis in the construction industry.

EXPORT-QUALITY PRODUCTS

In the furniture industry, we need some tweaking with intensive and rapid skills development to get the sector to produce export-quality products.

Otherwise, as with the textile industry, we will let these nascent industries slip through our fingers, thus making us even more dependent on imports from other countries.

We cannot create local jobs unless we exploit the abundant opportunities around us by biting the pain of going through a learning curve.

We have a choice to make. We either decide to go through a learning curve and lower the cost of our textiles and furniture to create jobs, or become dependent on mitumba to enrich other people at the expense of local jobs.

Lack of skills and resources to rapidly build local manufacturing compromises Africa’s future. It is, however, possible to start campaigns to buy local as a strategy to create and retain jobs. There are lessons to learn from China and India.

The writer is an associate professor at University of Nairobi’s School of Business. Twitter: @bantigito