OPEN ECONOMY: The Indigenisation puzzle, technology excludability

The analogy of a jigsaw puzzle seems fitting when referring to indigenisation.

A jigsaw looks simple enough when put together, but it is terribly elusive when pieces are dispersed all over the place.

Zimbabwe’s indigenisation law intentions seem very simple and straight forward — we want to benefit from the natural resources found within our borders.

If those benefits are to be shared, we’d like the marginal dispensation of 51 percent.

Yet, we have been unable to derive noticeable benefit in relation to our interactions with foreign counterparts. It seems that somehow, we haven’t been able to put together the right pieces of the puzzle.

For any policy implementation to achieve its purpose, there are political, structural, distributive and industrial pieces to consider.

In our case with indigenisation; the politics have been certified in our incumbency, structures put in place through the respective indigenisation ministries, and distributive benchmarks have been elaborated at 51 percent for sectors in natural resource extraction.

The missing piece remaining is the industrial element of natural resource indigenisation.

I advise that we advance the industrial element to potential foreign counterparts within the context of technology excludability.

The industrial element is made up of the operational processes found within a value chain.

Value chain processes include mining exploration, reserves valuation, aero-magnetic surveys and right up to the final mineral refinery that avails products in a readily available condition for desiring markets.

These value chain activities can be viewed as the technology that enables extractive productivity of our natural resources: this technology poses our greatest challenge as a sovereign nation.

We have mineral deposits within our borders but we lack the technology needed to transform these minerals from their natural state to the final condition of market value.

We are a nation disadvantaged by the lack of technology necessary for a self-reliant, productive, indigenous mining sector.

On this premise, the concept of “technology excludability” becomes very relevant to our indigenisation thrust.

In fact, I would argue that it is our greatest impediment and the missing piece to the puzzle.

So profound is the concept of technology excludability that it finds a global narrative for our indigenisation ethos. We have struggled to present indigenisation as relevant to the global ecosystem, allowing detractors to portray it as somewhat of our own unique unreasonable agenda.

Technological excludability is the degree in which companies can protect intellectual property and innovation from being shared outside of their own corporate structures.

Excludability means that new technologies do not flow from one company to another; and resultantly, one country to another.

According to the Organisation for Economic Co-operation and Development, a significant cause for the slowdown in the rate of global economic growth over the last two decades is attributable to the increase in excludability.

As productive technologies have become enclosed in certain companies, accessibility is exclusive to respective owners or comes as an extremely costly privilege for outsiders.

Technology excludability is currently a contentious global issue, particularly within the context of competitiveness. There are two significant events which may shape the global economy in the 21st century taking place right now.

The Trans Pacific Partnership (TPP) is a potential agreement that involves countries that make up at least 40 percent of the world’s GDP.

The agreement is delicate in its focus on intellectual property rights and cross border disputes between private companies and the governance of respective jurisdictions. Points of contention regarding the agreement include length of patent and copyright protections.

In addition, if the TPP passes, countries would be obliged to align their domestic laws and regulations to the TPP’s rules.

The second event is a continuous debate on Net Neutrality.

Net Neutrality has to do with Internet service providers allowing access to all content and applications regardless of the source, without favouring particular products or websites.

It proposes that the full resources of the Internet and means to operate on it are easily accessible to all individuals and companies across the world.

The implications on information and communication technologies in countries are quite significant.

Whichever way these two events go, it is clear that the world is arguing over the structures in which technology is encouraged as a means of competitive advantage, however, its continued uneven distribution exacerbates inequality amongst nations causing an overall slowdown of the global economy.

This discourse at the highest level of global economic governance illuminates how our push for indigenisation and the present shortcomings we face cannot be looked at from rigid lens.

In essence, what we are talking about locally to foreign mining entities is no different to what the rest of the world is arguing over. Indigenisation is just our position in an ongoing conversation on the industrial policy which will influence the global economy over the next century.

A nation such as Zimbabwe which is behind in terms of extractive technology inherently has a dissenting view on technology excludability.

This element of industrial policy is what some of our politicians have missed in the puzzle. What we really want to achieve through indigenisation is to reduce the degree of technology excludability.

Our pursuit then must be focused on luring in technology that enables us to indigenise extractive productivity of our natural resources.

Why then would we want to outsource aero-magnetic surveys from Canadian firms or be content paying exorbitant amounts to Australian firms to do alluvial mining for us?

In similar logic, why would we want to keep on buying Chinese equipment when we can learn how to manufacture it here?

We obviously derive greater gain if we shared in these technologies to create an indigenous knowledge base within the sector.

Thus, I suggest that our indigenisation stance be one led by diplomatic persuasion towards information and knowledge parity, with an emphasis on narrowing down technology excludability.

If we become conscious of this stance, we will position ourselves for downstream benefits as well.

It is inconceivable to achieve value addition and beneficiation without creating a competitive technology base locally. With greater assimilation of technology, our mining schools benefit from the knowledge and information proximity.

This positions us also to produce a more competent local labour market.

Along with continued engagement with corporate structures, value addition and beneficiation in Zimbabwe becomes realistic.

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