Francis Stevens George

FUTURE DIRECTIONS: MAKING THE NEW ECONOMY WORK IN AFRICA

www.innovation africa.org

Technology and Economics

Growth and Development of any modern economy is based on innovation and new technology Kondratiefs Long Wave Theory. The role of technology in the upwave. Schumpeter: technology as the engine of economic growth Mensch: Only innovation can overcome economic depression.

Francis Stevens George

www.innovationafrica.org

Economic business cycles

Pol/Eco Influences
French Revolution

Technology Innovation

Impact on factors of production

First cycle (1780s-1830s)

Industrial revolution I-iron, textile, steam technology

Land-iron & coal resources Capital-OT,BKn Labour-division of labour/fact. Workers. Enterprise-investment by landowners in new industry Land-pig iron coal Capital-joint stock, issuing of notes, stable banking system Labour-education of workers Enterprise-investment by State and VCs Land-coal, petrol, other metals Capital-int. Finn. Labour-more skilled, demise of child labour, Enterprise-inter war speculation Land-alluminium, silicone, petroleum Capital-sophis. Fin mkts, Labour-highly skilled, universal education,unions Enterprise-international investment

Second cycle (1830s-1880s)

Marx

Industirla revolution II-steel industry/railroads

Third cycle (1880s-1930s)

Capitalism

Electrical engineering/electricity/motor

Fouth Cycle (1930s-1990s)

Socialism, Unionism, Consumption

Nuclear/oil/electronics/micro processing

Fifth cycle (1990s-

www.innovationafrica.or g

Globalisation, International, Integration

Information technology/telecoms/biotech/g genetic eng

Land-recycled/envio fM, Capital-single world market, money Francis Stevens George Labour-know.workers 3 Enterprise-monopolistic media,IT, private ins. investors

My Model: The Starting Point

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The world is characterise by two sets of economies.The New Economy is characterise by information literate persons creating new products and services. This new economy will experience rising living standards. At the other end, we find the Old economies. These are characterise by people with outdated skills, that participate in a limited manner in the world economy. This economy will experience stagnation and no growth. These two economies will be defined by a widening Digital Divide.

Francis Stevens George

www.innovationafrica.org

My Model: To Make the New Economy work in Africa: Starting Point Based on Joseph Schumpeters ideas
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Well educated, information Literate. These men and women participate in the economy as creative entrepreneurs.

Rising Standard of living

Create new products and services Knowledgeable about market signals Develop products that markets wants Develop new business models Create jobs, income and increase savings

FEATURES OF NEW ECONOMY

Information based Products Internet, ICT Tele Services, E-commerce Intangible Assets Net Entrepreneurs

Innovation is the driving force

Not well educated, less educated, not information literate, outdated skills. Limited participation.

Stagnation, stagnant standard of living Francis Stevens George www.innovationafrica.org

MyModel: Action Points

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To move the Old economy to the New Economy Investment in training programs for all sectors of society, developing information literate leaders, entertaining and encouraging private sector initiatives. Innovation is the KEY Time scale 5-10 years.

Francis Stevens George

www.innovationafrica.org

Time Scale is 5-10 years

My Model: To Make the New Economy work in Africa: Action Points

Well educated, information Literate. These men and women participate in the economy as creative entrepreneurs.

Rising Standard of living

Create new products and services Knowledgeable about market signals Develop products that markets wants Develop new business models Create jobs, income and increase savings

FEATURES OF NEXT ECONOMY

Information based Products Internet, ICT Tele Services, E-commerce Intangible Assets Net Entrepreneurs

Innovation is the driving force

Investment in Training Programs, Support for Private Sector Initiatives.

Not well educated, less educated, not information literate, outdated skills. Limited participation.

Stagnation, stagnant standard of living Francis Stevens George www.innovationafrica.org

My Model: To Make the New Economy work in Africa: Action Points

Govt support enabling environment-telecoms, legislation, taxation, Red tape.

Innovation is the driving force

Rising Standard of living
Well educated, information Literate. These men and women participate in the economy as creative entrepreneurs.

Invest in IT Training at all levels, support private initiatives

Not well educated, less educated, not information literate, outdated skills. Limited participation.

Stagnation, stagnant standard of living Francis Stevens George www.innovationafrica.org

Lessons from the Past.Remember

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African countries focused on commodity products. The prices of commodities fell over time. Terms of trade worsen. Many failed to diversify into products that saw rising terms of trade. Non participation in the International Trading regimes because of outdated skills. Unmarketable skills Tourism was a late comer and of course because of poor infrastructure, many could not full develop their tourism potential. Many basic infrastructure industries were government owned. Inefficient and often badly managed. Remember one of the problems in Africa has been the lack of skills in the Industrial Age. Not enough engineers to maintain machines and plants. Traditional Western aid provided some industrial infrastructure, BUT because we lacked skills and knowledge, we did not create any value from these.

Francis Stevens George

www.innovationafrica.org

Key Elements
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Need a good infrastructure. In the knowledge economy-human capital is part of the infrastructure! Tangible and Intangible infrastructure In the new paradigm, the tangible infrastructure is the information technology network. Many countries are privatising these as a condition from IMF/IBRD. Human Capital is the most important in order to create prosperity-the intangible. Intangible assets are the sources of value in the new economy. An information literate population has higher chance of increasing its standard of living than one that is not. Francis Stevens George www.innovationafrica.org

Conclusion
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To join this New Economy we need to invest in our people. Knowledge is a key ingredient in a knowledge based economy Innovate!!

Francis Stevens George

www.innovationafrica.org