Research key in driving industrialisation

Professor Murwira
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ZIMBABWE will this year invest billions of dollars in research and development (R&D), a key enabler in driving the country’s industrialisation and development agenda.

Analysts argue there would be “no magic” to economic transformation and industrialisation being championed by the Government through the National Development Strategy 1, without  meaningful investment in research and development.

While the Government has for years been shy to allocate funds towards R&D, international evidence shows that successful countries such as South Korea, Israel, Japan and Taiwan have been allocating substantial amounts into research.

For instance, South Korea, Israel, Japan and Taiwan’s expenditure as a share of gross domestic product (GDP) stood at 4,3 percent, 4,9 percent, 3,2 percent and 3,1 percent, respectively.

Similarly, while investment in research and development is considered the lifeblood of many private sector organisations, helping bring new products and services to market, many local companies have for long been in the survival mode and would require “certain amount of stability” to start thinking of investing in R&D.

This year, the Government plans to spend as much as $5 billion (US$61 million) in research in various areas including mineral and agro-processing programmes for value addition, value chains and beneficiation, equipping training and research and development institutions with state-of-the-art infrastructure, according to the Treasury.

The funds will also be spend on partnerships with private, public and other stakeholders to develop state-of-the art research infrastructure and cooperation mechanisms; and strengthen Centres for Educational Research, Innovation and Development.

“It is a modest budget but more needs to be done,” Carlos Tadya, a researcher with a local think tank said. “It is lifeblood of economies and can enhance competitiveness.”

In the global economy, when countries are said to be competitive, it is not actually governments that are competitive. Rather, competitiveness is bolstered by a vibrant productive sector, which draws from research and development, analysts say.

Economist Professor Gift Mugano said industrialisation must be powered by R&D.

“We have to be innovative in our approach to industrialisation,” he told The Herald Business and Finance in an interview. “Undeniably, in my view, innovation is an output of research while industrialisation becomes the outcome.

“What this teaches us is that we must get the right formula on industrialisation and it has to start with teaching, research, innovation and industrialisation, which is a policy being spearheaded by Professor Murwira under Education 5.0.

“However, in my view, the real impediment to the success of the Education 5.0 is funding.”

In the 2021 National Budget, Finance and Economic Development Minister Professor Mthuli Ncube said the industrialisation and development agenda relied on research and development as the country pursue the NDS 1 towards Vision 2030.

“Therefore, research in various sectors will be given requisite priority in promoting innovation, science, technology and industrial development,” said Professor Ncube.

Prof Mugano noted some advanced economies such as United States, China, German and France respectively allocated expenditure as a share of GDP equivalent to 2,7 percent, 2,1 percent, 2,9 percent and 2,2 percent.

“This is the reason why their economies are characterised by industrial complexities and these are the same countries, which are driving the fourth industrial revolution when most of our economies especially in Africa are entrenched in primitive economies which are largely extractive,” said Professor Mugano.

South Korea, with a single mineral, escaped poverty through research and development, which saw the country being a household name in international brands such as Sumsang, Kia, Hyundai, LG and is the leader in ship building, he added.

“In the region, although South Africa and Botswana allocates expenditure, which is equal to 0,8 percent and 0,3 percent, respectively to their gross domestic product, it is still meaningful in helping these countries in                                           informing their industrialisation game plans and it is for all of us to see how our economy is different from these economies in terms of economic transformation,” added Professor Mugano.

Industrialist Mr Busisa Moyo said while it was critical for the private sector to invest in R&D, companies needed to be more financially stable to fund such programmes.

“Once you are in the survival mode, thinking long term is very difficult,” said Mr Moyo, is also the chief executive of United Refineries. “That will require a certain amount of stability. Currently, the urgency is the enemy of strategic,” he added.

With the African Continental Free Trade Area that came into force on January, 1 2021, analysts said corporate research and development would enhance competiveness of Zimbabwean companies and reduce the risk of losing ground to rival firms.