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Unpacking President Masisi’s dream: The Knowledge-Based Economy

SHARE   |   Tuesday, 06 November 2018   |   By Dr Letshwiti B. Tutwane
Masisi Masisi PRESS PHOTO

Every president comes to office with his development agenda. For President Mogae, HIV/AIDS was a big problem for the country in the 1990s and he made it his main business to tackle it. He managed to attract millions of donor funds and today almost everybody in this country knows about the danger of this disease and the need to test and get assistance. For president Ian Khama local procurement and youth empowerment were key. Today we have preferential treatment for youth in government business and procurement systems and emphasis on local procurement continues in many sectors.

For President Mokgweetsi Masisi consultation and the Knowledge-Based Economy seem to be the new mantra. His Vice-President Slumber Tsogwane gave impetus to the concept in his remarks when welcoming the Indian Vice President to the country last week – Knowledge-Based Economy is the main dream of the new president. This is a good dream, the one that many African countries need to have. Kenya and Nigeria seem to be moving in that direction, hence the interest of Bill Gates and Mark Zuckerberg in visiting those countries. However, in as much as I commend the President for having this vision, he needs to walk the talk, lest this becomes the usual political mumbo jumbo of the ruling party, like one called economic diversification. I have lost count of budget speeches that have contained that hollow phrase. I recall it from the time of President Masire in the 1980s up to the Khama presidency. I challenge anybody to give me figures that show that any significant progress was made in this respect. What are the indicators? President Masisi must have this in mind as he sings his mantra. Just like President Khama when he started his term in 2008, he has a lot of public good will. Most of us want him to succeed. His success will be success for the country. But he needs to put in place a number of measures in order for that to happen.

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At this point let me explain what the term knowledge-based economy means. It refers to an economy that is directly based on the production, distribution and use of knowledge and information. This essentially takes the trajectory of highly skilled employees and investment in technology. This means that government should not put bottlenecks on immigration needed to achieve this objective and universities must align their curriculum with industry needs.  Knowledge based economy thus is a fusion between knowledge and technology to produce both goods and services for the economy.

Now back to what the President needs to do: The first thing is that his government must create the appropriate legal environment that facilitates his dream. There might be need to legislate for special economic zones which typically come with preferential terms such as tax rebates and special import and export terms. Existing parastatals may need their mandate adjusted to align with this vision: I have in mind BITRI, the Innovation Hub and NAFTEC. The three government sponsored universities (BIUST, UB and BUAN) must also be brought on board. Research and innovation is a must for this dream to succeed. State of the art research laboratories are needed too. This means that both student and lecturer projects must address existing societal problems. We may also need to have an elite apprentice system where we place out science and technology graduates with firms in tech strong economies like the USA, China and South Korea and we build strategic partnerships with companies in those countries, directly linked to our local companies. This is what is termed national innovation systems: a network of a community of actors which is international in nature and comprises government, academia and industry.

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The government must be willing to spend money on this dream too and lots of money for that matter, provided it is for a good cause. We have had lots of billions wasted on the so-called e-government project, which is ironically a building block to a knowledge based economy. But with government failing to fund UB alone one wonders if it will be willing to spend on the president’s major dream. Of course it is not only government that must contribute financially. Private business needs to be convinced to invest in research and technology. It must see value for its money. And this is where FDI comes in. Strategic partners are needed for this. With the Indian Prime Minister in the country, the government had the right man in town. India is one country that is increasingly becoming a tech giant. Japan, Canada,  China, the USA, South Korea and European countries such as Germany, Sweden, the Netherlands and the UK are also other potential partners. Actually, Organization for Economic Cooperation and Development (OECD) member countries in the late 1990s came up with a comprehensive policy document outlining their knowledge based economy design which we could learn from.

I will be listening with keen interest to the President’s State of the Nation Address on Monday and his Finance Minister’s budget speech next February. It is my expectation that these speeches will add details to the skeletal outline of the knowledge based economy rhetoric. I have further suggestions of what the knowledge based economy should look like. It must have indicators to show us that we are making progress. For instance we must measure the share of tech industries in the whole manufacturing sector. We must measure them as a percentage of the GDP.

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Of course it is admitted it is not easy to measure knowledge and innovation. However OECD countries have developed a system of measurement which includes measuring knowledge inputs, measuring knowledge stocks and flows, measuring knowledge outputs, measuring knowledge networks and measuring knowledge and learning. For instance, when measuring knowledge inputs we may have regard to expenditures on research and development, employment of technical personnel and engineers, patents and international balances for payments on technology. For outputs we can measure the proportion of knowledge stock that has been injected in the economy. Technology flow matrices can be developed as indicators to measure inter-industry flows of research and industry infused into intermediate and capital goods. In the OECD countries they have classified their industries into high tech (aerospace, computers, pharmaceuticals, etc.), medium tech (motor vehicles, chemicals, rubber and plastic equipment, etc.) and low tech (petroleum refining, ship-building, food and beverages, wood and furniture, etc.). This is for purposes of measuring knowledge output. These measures are based on the assumption that certain knowledge intensive sectors are key to the long term performance of countries as they produce spill-over benefits, providing high skill and high wage employment, as well as higher return to both capital and labour.

I have tried to simplify and summarise otherwise very technical information which is typical in the knowledge based industries. More space is needed to clearly articulate these issues. My apologies!

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