THE BLOG

Industrialization and the Journey Toward First World Africa

06/22/2015 04:00 pm ET | Updated Jun 20, 2016

If Africa can get through the current period of global economic uncertainty and low oil prices whilst continuing to invest in business-critical infrastructure it could be sowing the seeds for a great economic boom that is outside of the oil sector. For Africa, this would be transformational. Africa is at a crossroads; a moment in time that it has never experienced before. Shifting the focus on investing in electricity supply as well as transportation and logistics networks for instance will dramatically reduce the cost of producing goods and services, thus setting the stage for Africa to become the next great industrialized region.

The fall in oil prices is an opportunity to ramp up economic diversification efforts to usher in Africa's impending industrialization future. The biggest impact on an industrialized Africa would be on job creation and the domestic supply chain, with millions of Africans spending more on locally manufactured goods and produce. McKinsey's 2012 Africa at Work report estimated that 90 million households had joined the world's consuming classes as at 2011, a number that is estimated to rise to 128 million by 2020. This growth alone has the potential to create and sustain a virtuous cycle of demand and supply.

However, in our globalized world, a domestic market cannot survive in blissful isolation for long. External market forces applied by foreign investors and the downward pressure on prices from cheaper imports will eventually take their toll. This is perhaps one of the greatest failings of capitalism - the market will always look for a more efficient, cheaper locale. Whilst that may bring jobs in the short term, those jobs eventually become poorer paid, working conditions suffer and eventually the jobs move on.

So how can Africa respond to an impending period of industrialization whilst avoiding the mistakes of previous industrial revolutions?

The key here is to agree that Africa will not and should not become a hub for cheap mass production. Neither should an industrialized Africa come on the back of worker exploitation, minimum wage and sub-standard working conditions.

It is therefore necessary to ask questions now as to what jobs in an industrialized Africa might look like in the near future. One of the best ways to build a framework for local industries to thrive is to invest in segmented markets, new technologies and also to play to each country's strengths. It is here that governments have a role to play in recognizing which sectors to invest in, support and promote.

I would like to envision Africa's industrialized future as a creative-led one, focused on niche production of products that are needed on the continent, but that also have export appeal. I am increasingly convinced by models such as the maker movement, which have the capacity to turn consumers into makers. I believe there is huge potential for Africa to go down this path in a big, big way, especially given the rapid pace at which technology is reconfiguring economies, creating new markets and opportunities.

According to USA Today, in the United States, makers - people who employ their creative skills in craft activities, such as making clothing, jewelry, baked goods or works of craft or art - comprise 57% of the American population age 18 and up, and inject some $29 billion into the economy each year. Just imagine the potential impact this could have in a continent like Africa in the coming years, with over a billion people, and where over 40% are under the age of 15, and 20% are between the ages of 15 and 24.

Already Africa is seeing outfits such as Maker Faire Africa and Woelab introduce technologies such as 3D printing in the manufacturing space, moving prototypes into production of goods using local materials and even recycled waste.

According to ReportsnReports, world demand for 3D printing is projected to rise more than 20 percent per year to $5 billion in 2017. While professional uses such as design and prototyping will continue to account for the majority of demand, the most rapid growth will be seen in production and consumer applications. 3D printers will increasingly be utilized to manufacture direct production parts and finished goods in a wide variety of applications.

This is the kind of manufacturing environment that African nations ought to actively upscale and invest in - via regulation, funding and skills development - as it empowers citizens to become their own designers, producers, manufactures, buyers and sellers. Africa also has unlimited space in which to create clusters of community maker spaces that can support wide-scale urban manufacturing.

First and foremost however, Africa needs infrastructure. It needs electricity to ignite innovation and support the explosion of e-commerce, and it needs transportation networks to facilitate logistics and trade. This will give rise to the creation of a collaborative economy between African nations, thereby catapulting the continent into its niche industrialized future, and on its way to first world status.