1

Science and Technology Parks Stimulating a Diversified Economic Growth in Africa

Hauwa YabaniMD, Abuja Technology Village

Nigeria

2

Outline

Contents

Global Economy – African Perspective

Science and Technology Parks – An Overview

A “Developing” to “Developed” Nation – Need for Diversification

Role of Science and Technology Parks in Economic Diversification

Key Learning Points for Africa

3

changingThe world is

2012

$ 0

Greatest debt

Least debt 4 0, 6 8 5, 2 4 5, 3 7 9, 8 6 6

Total Debt as % of GDP

Greatest debt

Least debt

Recently

Downgraded

USA

Japan

Cyprus

Greece

Ireland

Italy

Portugal

Spain

Hungary

Total Debt as % of GDP

France

UK

Greatest debt

Least debt

Recently

Upgraded

Brazil

Colombia

Ecuador

Indonesia

Peru

Philippines

Turkey

Ukraine

Chile

Uruguay

Total Debt as % of GDP

Nigeria

Forecast E7 overtake G7

2013 Brazil overtakes the UK

2014 Russia overtakes Germany

2015 Indonesia overtakes Turkey

2018 China overtakes US; Indonesia overtakes Canada

2019 Mexico overtakes Italy

2020 Turkey overtakes Canada

2021 Indonesia overtakes Spain

2024 Indonesia overtakes South Korea; Turkey overtakes Spain

2025 Brazil overtakes Germany

2028 Mexico overtakes France, Turkey overtakes South Korea

2030 Indonesia overtakes Italy

2031 Mexico overtakes the UK

2033 Turkey overtakes Italy

The accelerating shift of global economic power

GDP ranking

2009

1. US

2. China

3. Japan

4. India

5. Germany

6. Russia

7. UK

8. France

9. Brazil

10. Italy

11. Mexico

12. Spain

13. South Korea

14. Canada

15. Turkey

Forecast 2050

1. China

2. India

3. US

4. Brazil

5. Japan

6. Russia

7. Mexico

8. Indonesia

9. Germany

10. UK

11. France

12. Turkey

13. Nigeria

14. Vietnam

15. Italy

Technology as a Key Driver to Economic Advancement

Digitalisation

Customers increasingly expect to access services where, when and how they want – using smart phones and tablets.

• Forward-looking institutions are starting to explore the growing impact of using social media to communicate with customers, cater to evolving buying behaviours.

• Mobile payments are expected to grow globally by 97 percent per annum over the next 2 years to 2015, driven by customers’ desires to shop in environments that are ‘always on, always fast and always accessible.’1

• Data stored in “Clouds” makes data management more convenient, cost-effective and secure.

• Crowdsourcing is driving innovation and enhancing the customer experience.

• Biometrics and microchips embedded under the skin may be in use by 2020.

9

The time it takes to reach 50

million users

75 years

38 years

13 years

4 years

3.5 years

3 years

2.5 years

50 days

Technology Speed and Adaptation

10

Case Study - Singapore

• In 1979, after the shock of two oil crises, the Government started a program of economic restructuring. This was achieved by modifying education policies, expanding technology and computer education, offering financial incentives to industrial enterprises and launching a productivity campaign.

• Public housing was given top priority. New towns sprang up and Housing and Development Board apartments were sold at a low cost. To encourage home ownership, Singaporeans were allowed to use their Central Provident Fund savings to pay for these apartments.

11

Case Study – Singapore Contd.

• Singapore took measures to promote innovation, encourage entrepreneurship, re-train her workforce, and even attract foreign talents. These measures boosted Singapore's productivity, so that Singapore became competitive and ready for the challenges of a knowledge-driven global economy

• Government-linked corporations play a dominant role in Singapore's domestic economy. These fully and partially state-owned enterprises operate on a commercial basis under guidelines established by Temasek Holdings and are granted no competitive advantage over privately owned enterprises. State ownership is prominent in strategic sectors of the economy, including telecommunications, media, public transportation, defense, port, airport operations as well as banking, shipping, airline, infrastructure and real estate.

• Today, Singapore is a developed country. Her income per capita is high by current developed country standards. The structure of the economy is oriented towards high income services and the production of sophisticated manufactured goods and the level of welfare of the indigenous population is higher than in many fully developed countries

12

Africa’s Macro-economic Review

A majority of the problems of Africa revolve around natural resources – “resource course”

Most African countries suffer from the “Dutch Disease” - which is prevalent in countries with large endowments of natural resources, such as oil and gas, but often perform worse in terms of economic development and good governance.

Globally, countries do not make it economically long term relying on one primary product and sustainable growth depends largely on diversification.

It is imperative African Countries find ways to diversify their economies, i.e. non-traditional sectors; expanding their range of products and exports

Embracing scientific and technological innovation through the development of Science and Technology Parks (STP) - can foster economic development and accelerate diversification of Africa’s economy.

13

Challenges to Economic Diversification

Infrastructural Deficit

Poor Innovation

Culture

Institutional Incapacity

14

Macro-economic Factors to Watch

1. Energy

2. Regulation

3. FDI Inflows

4. Socio-Political Terrain

5. Technology & Digital Economy

6. Infrastructure

7. Security

15

Science and Technology Parks

Science and Technology Parks support university-industry and government collaboration with the intent of creating high technology economic development and advancing knowledge.

These institutions offer a number of shared resources for their clients such as;

• Incubators, • Programs and collaboration activities, • Uninterruptible power supply, • Telecommunications hubs, • Reception and security, • Management

offices, restaurants, convention center, parking, internal transportation, etc.

16

Science and Technology Parks

While each country or municipality may have different reasons for creating technology parks, generally the primary purpose of a STP is to increase the number of entrepreneurial, knowledge-based small and medium-sized enterprises in an economy.

STP’s provide an environment that enables market-oriented technological development. They improve the well-being of the community they are located by encouraging a culture of innovation. They nurture the relationship between universities, R&D institutions, companies and markets and have the core elements for sustainable development. They can help bridge the gap and connect our economy to the global economy by developing industries that lead the way to diversification.

17

Role of STPs in Economic Diversification

Science parks are sources of entrepreneurship, talent, and economic competitiveness, and are key elements of the infrastructure supporting the growth of today's global knowledge economy. By providing a location in which government, universities and private companies cooperate and collaborate, science parks create environments that foster collaboration and innovation. They enhance the development, transfer, and commercialization of technology.

STP can be used as one of the investment tools of economic diversification.

They provide an environment that enables market – oriented technological development.

Improve the well being of the community they are located by encouraging a culture of innovation

They can help bridge the gap and connect economies to the global economies by developing industries

They perform an economic development function. By drawing together large businesses and start-ups in the same place: they enable clustering as well as the development of networks and trust. This allows the transmission of ideas and knowledge, which foster new companies, innovation and ultimately, growth.

18

Despite being endowed with tin, oil and gas, Malaysia has successfully diversified its economy since gaining independence in 1957 to a multi sector economy driven by high technology.

Notable impacts of technology on national development are best illustrated by the palm tree value chain in Malaysia. The country imported palm seedling from Nigeria in the early 1960s. Through well-planned R&D and technology applications, Malaysia developed commercial value from the entire palm tree:

The palm fruit was enhanced significantly to yield large quantities of palm oil and palm kernel.

Through R&D, palm oil was converted into an environmentally friendly and biodegradable drilling fluid called Petro free, which sells for more than USD 20/bbl.

Palm kernel is being converted to soap detergent and animal feed for industrial use.

The broom stick derived from the frond is crushed and compressed to make table tops and is used in car-seat manufacturing.

The interior of the palm trunk is treated with protein and converted to animal feed.

The Case of Malaysia: The Palm Tree Example

19

The Case of Malaysia: The Palm Tree Example Contd.

• Technology Park Malaysia (TPM) was established to allow high tech local companies to become global multinationals. It was designed to be the world’s most comprehensive center for technological innovation and R&D for Knowledge based industries.

• Today, Malaysia is one of the world's largest exporters of semiconductor components and devices, electrical goods, solar panels, and information and communication technology products.

• In Malaysia technology is clearly an engine of growth. Africa must not view technology as a consumable item, not something that must be created or produced but as the primary engine of growth and they key to unlocking any nations potential. Countries that want to develop must invest insignificantly in S&T.

20

Key Learning Points for Africa

Establishment of favorable incentives around tax regimes

Focus on developing their ICT and power

sectors

Synergies between academia and private

sector

1 2

3Innovation should be adapted to fulfill local

needs

International Cooperation should be

adapted for the benefit of all African

Nations

4 5

21

Thank you!