Beyond revival, beyond nostalgia!

For decades now we have sought to revive some of our ailing industries. Our preoccupation with capacity utilisation pre-dates the 90s, however, the world has evolved.

We must build new capacity from which to benchmark our success and thus leapfrog ahead towards new legacies.

The nostalgia of what used to be, has been our obsession for the longest time. The world has moved on, but we have not. Here I am not suggesting we do not attempt to fix what can be repaired.

In 2021 I was invited to an industry conference as a speaker, I spoke about how it would be difficult to build an economy of the future with a mindset captured by nostalgia.

I made a lot of people unhappy that day, that was not my intention, far from it. All I wanted to express was my desire to see an economy that is positioning itself to grab hold of new growth opportunities to leapfrog whatever great thing we had in the past.

Our peers like Kenya in the 90s are now 100-billion-dollar economies. Yes, we have had many policy blunders as well as external pressure from sanctions.

Yes, those targeted sanctions are a thorn in the flesh when foreign entities are doing due diligence on a small economy such as ours. They won’t read the fine print, especially for any industries other than the extractive sector and the agriculture sector.

When you surf the internet, “this service is not available in your country,” is such a bummer. Well, some folk may not get it, but young people trying to build tech solutions are struggling with this, often having to change their PO Box.

I digress, so we have spent over a decade obsessing about the revival of one steel company, ZISCO at the expense of an entire steel industry. Even as demand for steel grew, we still obsessed about one company, our beloved ZISCO.

Then Dinson came along, and in late 2022 they started building a plant way bigger than ZISCO. By year end (2023) they will commission that plant. Whilst we were jostling to revive one company, some people with a vision sharper than ours saw beyond that.

So, how did we view our steel industry? The same way we viewed our airline industry. We obsessed so much about Air Zim, when our obsession could have been enabling that industry’s growth. Yes, Air Zim used to fly to more than 10 international destinations (London, Lusaka, Frankfurt, Gaborone, Johannesburg, Athens, Nairobi, Lilongwe, Mauritius, Durban, Maputo, Sydney, Perth etc) and more than 5 local destinations (Masvingo, Gweru, Hwange, Kariba, Bulawayo, Vic Falls etc) but even Pan American the company famed for popularising the jumbo jet collapsed.

Even with Pan Am’s failure the industry has grown beyond anyone’s wildest dreams. The industry is always more important than one player, hence Zimbabwean airports today are abuzz with all manor of international airlines flocking courtesy of decent airport infrastructure, notwithstanding the challenges and many areas of improvement.

Because we continue to view the world through our nostalgic lenses, we have not been able to seize the moment or let alone seize the future and the possibilities it offers.

We esteem companies like CSC, Air Zim, ZISCO etc. as more strategic than the industries they belong too. Our preoccupation must be in providing new policy direction that enables wider industry growth — consistent and harmonised policy direction.

The steel industry is more strategic to Zimbabwe than ZISCO, hence Dinson and hopefully other players will come in and enrich it as well as it’s entire value chain. The meat industry has survived beyond CSC, though we are nowhere near our former glory, the key lesson is that recovery exists beyond one company. Industries are ecosystems!

Think cotton for example. Our cotton industry can not and will not be revived by cotton the commodity, unless we widen the opportunity beyond nostalgia. We produce cotton the commodity.

Ethiopia produces cotton fabric, the product. Egypt has cotton in brand form. Brand is greater than product. Product is greater than commodity. True turnaround for the cotton industry exists up the value chain and that future looks like two things — good numbers, good stories otherwise we limit ourselves to product and price.

Without which, our struggling cotton farmers are fast losing incentive. A different future for the cotton industry is dear to me because when my father died, my mother paid part of my college tuition from cotton proceeds.

Our industrial policy must go beyond nostalgia (revival), else we will see a lot of bailouts going towards companies that ought to fail so that they can resurrect with a different perspective.

How do we incentivise private sector participation in high growth potential industries? In the words of Adam Smith, It is not from the benevolence of the butcher, or the baker that we expect our dinner. Policy is the fertile soil in which ideas, capital and talent will thrive.

Industries are ecosystems. New opportunities will emerge once we start rethinking what we consider to be strategic businesses. A pivot from single business entities to an industry-based view will enlarge our opportunities. Companies may fall and fail, but industries evolve.

Our toolbox must contain so much more than regulation. We are always seeking to ban or regulate what we do not understand. When a group of young Zimbabweans set up crypto-exchange Golix, which could have been a precursor providing lessons for soft landing to Zig, we banned them.

When Max Chinkumbutso made claims about microsonic energy devices, we also didn’t take him seriously. He did what most young people do when they don’t feel supported, he changed his PO Box and took his “inventions” abroad. When we don’t understand something, we regulate it, instead of seeking to understand what it’s value could be for our society.

Yes there’s been some efforts for example with the RBZ regulatory sandbox as well as with the innovation hubs that have been set up at universities, but even those are falling victim to nostalgia.

When dishwashing liquid is in season, everyone ticks that box. We have not seen many high growth potential solutions emerge, then again it is still early days, thus we must be patient with them.

That patience must be extended beyond hubs. We must exercise and exhibit patience with the entrepreneurs and enterprises, patience with the SMEs, after all we subject them to the same tax conditions as anyone else.

Due to risk-based lending they get the most expensive money. Without a roadmap to graduate them from micro-lenders to banks, from banks to private equity, from private equity to listing, most of them drown in impatient debt and hence struggle to scale and often face mortality and become part of the statistic.

Economies are reinventing through startups and SMEs. Not the livelihoods kind of SMEs, growth-oriented SMEs like the thousands of smartphone component suppliers in Shenzhen.

After all they possess the agility and flexibility required to ignite new ideas into life, whilst larger corporations are more geared towards repetition and bureaucracy. Most businesses still survive off product lines they created 30 years ago, according to Accenture they benchmark for innovation is businesses that make 75 percent of their current revenue from activities that began in the last three years.

While I personally think that’s an extreme benchmark, it still provides food for thought regards how economies can reinvent through constantly promoting startups and SMEs that are innovating in growth sectors.

New jobs up the value chain will be created by the new. How are we enabling the new to exist and thrive? Are we doing this through finance, through policy, through diversity and inclusion, through new patent registrations or through promotion of research and development? When we ask young creatives, “where has this been done before? Are we creating an environment that enables, thinking in other ways”?

The pearls we opened this piece with are a clear example that minerals today could be stones tomorrow.

The global economy is evolving so fast, so much that inferred mineral wealth worth so much today could be worth nothing tomorrow, we are already bracing up for a shakeup in the mining sector owing to suppressed commodity price outlook.

Human capital is being replaced by algorithms through AI. The pace at which we attempt to catch up must be faster. We must learn and adopt quickly.

Who knows, maybe in pursuing and expanding new opportunities we’ll become a battery technologies powerhouse.

Zimbabwe needs to be optimised for innovation, optimised to be able to take advantage of new opportunities, beyond nostalgia!

God bless Zimbabwe!-ebusinessweekly