Battery packaging at the Eveready East Africa Ltd factory in Nakuru. FILE PHOTO | NMG
What you need to know:
Building a knowledge economy would make the country more attractive to investors.
The recent evacuation of factory operations by two legendary companies out of Kenya is the latest in a spate of exits by multinationals that is sending a chilling message about the local business environment.
Cadbury, as most still refer to it, (later to become Kraft and currently Mondelez) and Eveready have pointed to lack of competitiveness in their local manufacturing operations as the reason they are relocating part of their businesses to other countries.
Companies like Colgate-Palmolive and Reckitt Benckiser made similar moves some years ago.
Corporations, especially multinationals, are constantly on the hunt for bargain production locations much like they do tax havens.
The bargain locations in the case of Cadbury and Eveready are Egypt and partly South Africa. There are obvious advantages to these locations.
As Kenya grapples with the factory exits on the basis of physical infrastructure hurdles and significantly high cost of doing business, the ground has shifted again.
Competitive advantage has taken a whole new dimension while we are still mapping out roads and the standard gauge rail.
It is no longer just about the hard infrastructure that we are working so hard to put up, but increasingly about a critical element that has emerged in recent years – knowledge.
Knowledge is the new frontier in business and has been for some time. In the 21st century, knowledge has emerged as the most important tool for growth that a country could ever develop.
It is has overtaken the conventional focus on physical infrastructure, energy and any other factors of production.
Kenya now has to contend not only with the tangibles but also the intangibles if it is to continue to attract investors.
The definition of knowledge is vast. The dictionary defines it as “the understanding that germinates from a combination of data, information, experience, skill and interpretation”. Knowledge is also defined as “the sum of what is known”.
For the future of any society there is need to equip every member with knowledge and skills, ranging from low to highly specialised, and all should possess equal capabilities to use and apply this knowledge productively for their own social and economic advancement.
This is where the concept of a knowledge economy came from. In this economy, the role of knowledge is to increase people’s capacity for effective action for the benefit of their own livelihoods and the economy.
A knowledge economy does not infer knowledge in all things technology. Rather, it a holistic cognisance of the knowledge and skills levels in the total economy, which can be purposely planned for, developed, harnessed, deepened and incubated in the right measure to yield a population that is capable of actively creating, producing and innovating.
Over half of Kenya’s population live below the bread line. Unemployment is the major source of poverty. Low skills or the complete lack of skills and professional qualifications is the main reason behind unemployment, even self-employment.
Literacy lays the ground for any kind of skills training. Education is thus the key that can unlock all doors into a knowledge-driven society and economy.
The concept of a knowledge society, and therefore a knowledge economy, is broad and takes longer than a lifetime to actualise. It takes a tremendous amount of resources to put up schools and institutions of higher learning. It takes an entire generation to receive quality and relevant primary, secondary and higher education as well as specialised skills training.
The role of ICT infrastructure and training cannot be over-emphasised. Knowledge is what paves way to the use of technology.
Knowledge drives not just the goods-producing industry but to a great extent, the service-based industries. Whereas factories are moving away from Kenya due to defective hard infrastructure, a supply of sufficiently skilled labour force ought to attract the service industries that rely more on people and less on hard infrastructure.
A knowledgeable Kenya is thus one that would be able to cushion its economy to the risks that globalisation exposes it to. A knowledgeable Kenya is one where citizens can create employment for themselves and for each other.
As we hope to attract and/or develop high end manufacturing, a knowledge-driven workforce can more easily embrace modern manufacturing technologies and keep up with the pace of innovation.
Africa is said to be the last frontier. But Africans themselves might not be able to take up what is right before their eyes due to a lack of knowhow.
The race to transition into a knowledge economy as a country, region and as a continent is on. A country must think big and boldly because the stakes are high.
India and China are at the forefront of the concept of a knowledge economy and significantly use knowledge as an instrument of social and economic development.
Because of the extremely high levels of skill and knowledge they have attained, they stand to challenge the traditional super power USA productivity and innovation.
How knowledge can be accessed or disseminated and finally applied in a relevant way to bring about social and economic empowerment is the full time job of the Government of the day.
Evolving the population of a nation into a knowledgeable one is today’s highest calling of any nation’s leader and the only true legacy such a leader can leave behind.
Wisdom of crowds as it has been referred to has a tremendous impact on the economic development and growth of a nation.
Commitment from the Kenya Government towards education of its people at all levels stands to transform our nation into a formidable force in years to come when it comes to productive capabilities.
