SPECIAL ECONOMIC ZONES

Folly of obsession with 'innovation'

Imitation the name of the game.

In Summary
  • The best example of what might work comes from China, which so famously brought 300–400 million citizens out of poverty in a few decades.
  • This was done, not through innovation, but by imitation.

For over a week now, the political opponents of the Deputy President Dr William Ruto have had a field day, mocking him as a distributor of wheelbarrows to unemployed youths.

These gifts of wheelbarrows (as well as hair dryers and the occasional motorbike) have been contrasted with the promise made by Dr Ruto and President Uhuru Kenyatta in their 2013 campaign to “go digital” starting with a “free laptop” in the hands of every schoolchild.

I would agree that one might have expected better from a leader with such a great reputation for resourcefulness as Dr Ruto. There will always be poor Kenyans eager to line up to receive gifts from those willing to bestow them. But as many a Kenyan tycoon seeking political office has discovered to his great shock and horror, there is usually no direct causal link between the receiving of gifts from the generous tycoon, and the casting of votes in his favour.

But the more interesting thing here is that those who justifiably laugh at Dr Ruto, have not exactly come up with viable alternatives of their own.

For the real issue here is job creation. And by any measure, there is really nothing more difficult to figure out than how to create more jobs for young people entering the labour market for the first time, in a poor country.

It does not matter what their qualifications are. Creating a path to economic opportunity for those who drop out of secondary school for lack of school fees, is every bit as difficult as creating white collar jobs for university graduates.

It was not always this difficult.

Back in the earlier decades of Independence, there was a systematic setting up of training institutions, all of which offered courses that guaranteed employment.

Quite aside from the opportunities open to those graduating from the sole public university of those days – the University of Nairobi – any young Kenyan enrolling at Utalii College would easily find a job in the hospitality sector. Those who attended the various Medical Training Colleges found jobs readily in government hospitals. And so on.

I suppose it is so much easier to hand out wheelbarrows than to help prepare young Kenyans for the opportunities which will come with the Special Economic Zone currently being set up at the Coast, near the Port of Mombasa, with the assistance of the Japan International Cooperation Agency.

And with time the more enterprising of the recently-trained workers in the hospitality sector or the public health sector found employment in other African nations, or in the Gulf States. But it is now apparent that those were merely the low-hanging fruit. For there are now dozens of such training institutions, both public and private, in all kinds of fields, all sending out newly-minted graduates: but very few jobs to be found.

I think one of the reasons for us ending up in this conundrum, is that our national mythology when it comes to the creation of economic opportunity, is that we have lots of “talented youth” who are capable of great “innovation”.

This may well be true. And those who wish to devote themselves to seeking some sort of dazzling new ICT innovation should be supported in this, even given the high failure rate of such innovations globally.

But for the great majority who merely seek to find a job which pays them a decent wage, I would say that the best example of what might work comes from China, which so famously brought between 300 and 400 million citizens out of poverty in just a few decades.

This was done, not through innovation, but by imitation.

Chinese policy for economic growth essentially involved carefully studying what was already being produced in the nations which were already rich (the US, Japan, Germany etc) and finding a way to produce the same things at a lower cost.

China’s march towards global manufacturing dominance began with the creation of Special Economic Zones around key port cities.

I suppose it is so much easier to hand out wheelbarrows than to help prepare young Kenyans for the opportunities which will come with the Special Economic Zone currently being set up at the Coast, near the Port of Mombasa, with the assistance of the Japan International Cooperation Agency.

But such SEZs are what helped China to create what was initially just a “narrow strip of prosperity” along its coast, before it expanded to become “the world’s factory”, creating hundreds of millions of jobs in the process.