Youths at the Afore:Economic Recovery through Innovation and Competitiveness

By Clive Siachiyako

Globally, economies are working-out smarter ways of completely eliminate effects of the recent economic recession and gear-up for economic recovery. They are finding ways of applying institutional changes inherent to innovation and competitiveness to stimulate productivity, economic development and long term improved livelihood for citizens.

Economic trends show that innovation is a foundation for competitiveness, industrial and technological upgrading, balancing economic growth with wealth redistribution and effective provision of essential public goods and services. Innovation helps countries deal with structural changes in their economies and enable them respond to external challenges better.

Innovation is about the production, diffusion and use of new and economically useful knowledge. It is about creating domains for identifying and nurturing enterprising faculties and building globally competitive national economies. Innovation is a base for competitiveness. It is a back-borne for formulating institutions, policies and factors that determine sustainable productivity levels in an economy.

Determined to promote innovation and competitiveness, Zambia is pursuing comprehensive economic reforms that led to the establishment of Zambia Development Agency (ZDA) and other key institutions and programmes like the Private Sector Development Programme, to pioneer and facilitate private sector led economic development.

To re-emphases its determination to enhance innovation and competitiveness, this year’s Zambia International Trade Fair (ZITF) is anchored on: “Economic Recovery through Innovation and Competitiveness.” The theme conforms well to ZDA’s initiatives that promote and support innovation and competitiveness through research, market development, establishing economic zones, and micro, small and medium entrepreneurs (MSME) development via business linkages, training and business voucher programme.

Through research, ZDA provides essential information on market offers for Zambian products and investor perceptions on the business climate in the country, including pledged investment implementation. Information on investor perceptions is vital in designing investor friendly policies that consolidate domestic and foreign investment. The information helps the country determine the magnitude, source and direction of private capital flows and stocks.

Such information is also key for domestic and external policy formulation, evaluation and complementing the country’s fiscal and monetary policies to bring overall macroeconomic stability. It improves the compilation of national statistics, which serve as an early warning system for preventing external shocks such as the recent world economic crisis. These proactive measures are essential for economic competitiveness and reliability.

To provide updated information on investment, ZDA monitors pledged investment actualisation in the country. Currently, 195 companies with investment licences have been monitored out of 700 companies with licences. These companies pledged US $ 1.3 billion investment and 14 000 jobs. US$624 million of that investment has been actualised, resulting into 9 500 local jobs, representing 47 percent implementation rate.

The monitoring process helps ZDA ascertain whether an investor invested the pledged amount, employed the pledged number of people or failed to implement the project and reasons for failure. Information on skills sharing, training for employees and other savvy transfer mechanisms is also acquired for determining how much innovation is assimilated in the domestic economy to improve productivity and service delivery.

The ZDA further research on market offers for Zambian products and foreign market offers. Since information is the premium of today’s knowledge driven economies, ZDA equips exporters and importers with pertinent information for identifying ripe markets for their products. It also helps importers easily tap necessary imports miles away.

Beyond investment and trade, ZDA facilitates business linkages between MSMEs and transnational corporations (TNCs). Business linkages provide demand led business solutions for both TNCs and MSMEs. They provide MSMEs an opportunity to upgrade their technologies, business practices and technical skills and ultimately become more productive and competitive.

Currently, ZDA and cooperating partners such as the International Labour Organisation and the United Nations Conference for Trade and Development, have facilitated four business linkages between MSMEs and TNCs. The four are between Zambia Breweries, Taj Pamodzi Hotel, TATA Tannery and Picky n Pay Group, with various MSMEs in similar businesses with these TNCs.

To foster entrepreneurship in the country, ZDA trains MSMEs in business and financial management, effective preparation of balancing sheets and prudent costing and pricing. Since entrepreneurs are pulled (model after parents/ friends) and pushed (circumstantial entrepreneurs), the ZDA initiatives for MSMEs are aimed at creating a pool of entrepreneurs that can innovatively earn a positive cash flow backed by sound business systems and processes.

With its mission statement combining investment and trade promotion, MSME development, competitiveness and innovation, ZDA also facilitates the establishment of multi-facility economic zones (MFEZs) to catalyse industrialisation and value addition to Zambian products to boost their competitiveness locally and abroad.

MFEZs are fundamental factors to rapid and sustainable economic development. They are a base for sustainable prosperity and making an economy more competitive, which Zambia aims to use to create value-addition bases and implant high spirited small and medium scale entrepreneurs in them to increase the economy’s competitiveness and innovation levels.
The ZDA considers the extent and quality of entrepreneurship available in Zambia as an important matter for innovativeness, since entrepreneurs play the role of originators and coordinators of innovative activities. Thus, creating enabling conditions that promote small and medium entrepreneurs has the potential to increase innovation activities and more effective innovation. It can make Zambian products very competitive and the general economy more viable and most rewarding.

With the current status Zambia has earned in most global rankings such as the World Competitiveness Report, Ease of Doing Business, Technology Readiness Ranking, and Ease and Access to Credit, ZDA is hopeful that the combination of the country business reforms will make the economy more competitive to capital, thus becoming a hub for innovation, job and wealth creation and sustainable development.

The ZITF’s theme: “Economic Recovery through Innovation and Competitiveness” has set the mood for enhanced competitiveness and innovation to speedup economic recovery and gear-up for sustainable economic growth and development. With combined efforts, Zambia can gain more. Visit ZDA at the ZITF and learn more on how to get the right support to enable your business grow to its full potential and increase its economic contribution.