The global competition is largely who has the best technical group to write the best one; in this case, Algorithms, that comprise of patents, technical processes, tools, and so on. As a nation develops, adopts, applies and diffuses appropriately the contents of this constitution, it elevates the lives of its citizens. The more innovation a nation pursues, the more it refines this constitution.
Economists have shown a correlation between Knowledge Economy Index (KEI), productivity and standard of living. The challenge for any nation is to improve its KEI number. Doing that involves good education, economic regime and other variables that help to improve
The age of natural resources dominating global commerce and industry is gone. What matters now is creating knowledge and applying it. Some nations will create, others will merely consume. But wealth is concentrated at the creative stage and nations that focus on consuming, without creating
Even with abundance of natural resources, which in many instances, the consuming nations cannot independently process without the knowledge partners will not change this trajectory of limited national wealth without
On this basis, I separate the two layers where nations use and compete with
The most advanced nations combine the two layers as they seek international competitiveness. They provide
For the other nations, usually developing, they compete at the
Let me illustrate using Nigeria where they speak the language of petroleum. In the petroleum industry, there are the downstream and upstream sectors. While the upstream focuses on exploration of crude oil, downstream does the distribution and marketing.
The money is in the upstream sector, a major reason we have the foreign partners concentrated therein. That is where the knowledge creation is done and utilized in the industry. I am cautious to say, without the knowledge partners in Nigeria, helping to explore this crude oil, Nigeria cannot mine this product. Verdict: the oil will be there and of no tangible economic use.
This will follow a pattern where villages have water underneath them but no drilling expertise to harness the water for cooking and drinking. That is the problem of anchoring national strategy at the downstream level. It lacks inventiveness.
In Africa and many developing countries where ICT has been embraced, they rarely know that there is more value than what ICT gives them. Sure ICT has helped many developing countries to improve their business processes, tools and people. They are so excited on the powers of quicker and faster communication. They savor the wonders of email, Internet and mobile phone and many more. These experiences are primarily on marketing, distributing and installation of these ICT systems. They rarely make them and can only play at the downstream layer.
There economists point out repeatedly the innovations ICT has brought to the economies. I agree, ICT is wired for innovation in so many areas. Nonetheless, the good news is that there are more benefits up in the pyramid if you move up to the upstream layer. By not creating
Though this point can be illustrated with any
Back to ICT, the upstream level will involve designing computing systems, cellphones, routers, device drivers, and all other infrastructures that enable ICT revolution. Instead of importing the latest cellphones, we will think how to design them. In 80% of the developing nations where mobile
Yes, there are businesses that distribute and sale these gadgets and make marginal profits. They can import a laptop from China at $500 and sell to their customers at $650. Because the barrier to entry is so weak, the margins are small. Everyone is selling and there are shops everyone. They are
Compare that with giants like Intel and AMD that take a piece of sand (silica) and process it. At the end, that piece of sand of say a $1 can be sold for $3,000 because of the knowledge involved to transform the sand to a microprocessor. That is knowledge and the very best of human imagination and creativity. It is playing
Nations win at the upstream level because the sale margins are so huge because the products are niche and in most cases innovative with few players internationally. It is not just the trade or margins. Upstream
You can make the same case for Pharmaceutical firms that mix elements, compounds, etc to create drugs. Some of the drugs are really expensive but the ingredients are cheap. People pay for the R&D invested in developing that drug. In developing nations, they focus on marketing and selling the drugs. As in petroleum, ICT, it is all about the downstream. Why the big Pharma can have margins of 1000%, these entities can barely command 6% margins.
So in essence, in this century, there are opportunities for nations. For developing nations, if they continue to compete at the downstream layer of the pyramid, they will find it hard to move forward since competition is basically synonymous with
How do we do that? Our nations must have fundamental changes in our national policies on technical education or better Science,