Thursday, 3 October 2019

On Industrialization and Service Economy —by Princewill Odidi

3 October 2019 

"Industrialization can create wealth for a State, but may not create the type of jobs that can bail Nigeria out of unemployment."

The reason is simple. With advancements in technology, fewer people are needed to complete even more complex task. A factory that 20 years ago required 200 employees to produce 5000 items, today that same company will only require about 35 employees to achieve the same task and at better quality.  

The advancement of technology to a large extent affected human natural inputs to production relations. Now, if fewer people are now needed to produce more goods how then do we absorb the increasing human population into the work force? 

The simple answer is improve on the services economy. It will interest you to know that China last year created over 15 million jobs 70% of which came from the services sector.  

Let me use education and schooling as an example to explain my point. Hundreds of thousands of Nigerians write JAMB yearly to enter universities. 

So common sense tells us that is a market we can tap into. Let us assume we decide to invest into Cross River University, bring down her school fees comparable to rates offered by federal universities and massively improve on its infrastructure and capacity intake attracting students from all over Nigeria. 

What do you think will happen? Calabar will be flooded with students drawn all over Nigeria. Our airports will be busy as more flights will start coming to Calabar, taxi business will boom as more people now take taxis, market women start making more sales as more people go to market chasing few goods, farmers start making more money as their products are all sold out, landlords make more money as more students rent houses, provision stores sell more as more customers flood the stores, now virtually every sector and every business becomes really busy requiring more hands, thats where new jobs and employments arise as the store keeper needs a new attendant, the market woman needs to expand so she hires new hands, new houses need to be built, so mason, carpenters, builders, engineers, architect are all very busy, building, developers need new permits, long lines in government offices, so government has to hire new hands to reduce work load, tailors, shoemakers, farmers, taxis drivers, hair makers, barbers, nail polish, virtually every trade booms. Note, a simple policy to invest in education and increase students intake capacity can turn around an entire economy of a state.  

We do not need to build new schools to archive this goal, just invest and expand on what you have. Education is a massive market in Nigeria, Healthcare of a state of the Art hospital in Calabar that meets all international standards like hospitals in India and overseas can also attract human population to Calabar. 

Just think of any industry that can attract more people to Cross River State, the value chain and how it will jump start employment in the service sector is unprecedented. 

The Chinese, the Japaneses, the Americans and Europeans are all investing and expanding their service sectors to create jobs, we don't need to reinvent the wheel we can copy. 

If Africa must move forward, we need to start thinking outside the box, we have been caged for too long. Our politicians spend too much time thinking on how to make money and suppress the people rather than on how to create collective wealth and improve on general wellbeing of the people. 

The solution to the good life for our people is not money, it is not oil wells, it is smart thinking. Ayades industrialization efforts if properlly managed will create new wealth and revenue for the state, don't bank on it that it will create jobs remarkably, if we really need to create jobs for our teaming youths, we need to expand the services sector. The Chinese are getting it, we too, we can!

Princewill Odidi
Social entrepreneur, development consultant and social commentator 

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