Back to basics of create and produce

Source: Back to basics of create and produce – The Zimbabwe Independent January 11, 2019

A New Year is upon us — the lamps of hope for a better economy for many Zimbabweans are flickering as the cost of living remains elevated and fuel shortages persist. As we begin a new year, it is appropriate that we lease economics wisdom from the Ancient Near East to make sense of our economic challenges and subsequently tease out possible solutions at both the personal and national level.

The rudiments of individual and national economic prosperity lies in a model buried within the maiden chapter of the Bible.

The locus of the model is ensconced in Genesis 1:28 (NKJV) and it reads: “Then God blessed them, and God said to them, ‘Be fruitful and multiply; fill the earth and subdue it; have dominion over the fish of the sea, over the birds of the air, and over every living thing that moves on the earth.”

Economic prosperity is built and sustained through a four-stage cyclical process. The stages are (1) Be fruitful (2) Multiply (3) Fill the earth (4) Subdue the earth. The first three processes are first mentioned in Genesis 1:22 in reference to birds and fish.

Be fruitful

The term “fruitful” is parah in the original Bible language which literally means bear fruit. This is an instruction to produce. The concept of a fruit is first mentioned in Genesis 1:11 (NKJV) where God created “the fruit true that yields fruit, whose seed is in itself according to its kind.” The foundations of economic prosperity are found in unique seed that shape the fruit. Individuals and nations must create something. Prosperity lies in creating unique products, not in extracting what is already there.

As we begin the year, you need to ask yourself a simple question: “Am I a producer or a consumer?” If you are simply a consumer, poverty will be happy to be quartered in your home. There is neither a country nor an individual that can expect economic prosperity where little or nothing is produced. Let us train the spotlight on our country and ask a basic question: “Are we creating and making unique products as a country?” Here are our major exports as per the Mid-Term Monetary Policy Statement in order of value generated: Gold, platinum, nickel mattes, nickel ores and concentrates, flue-cured tobacco (Virginia), chromium ores and concentrates, industrial diamonds, jewelry, black tea fermented, granite, coke and semi-coke of coal. Evidently, we are not creating: our production is largely extractive — it is not too difficult to fathom why we are struggling economically. We have not come up with useful ideas to make unique things.
Nations that have created prosperity for their people have come up with innovative ideas (seed) that produce fruit (products) of their kind (unique). Countries that occupy the top rungs of the prosperity ladder have had their prosperity built around one to three unique products that form the core of a powerful cluster of highly competitive ecosystems of related industries. It is not enough just to have an original idea — to sustain prosperity, there is an endless quest to upgrade the products and come up with other original products (create new seeds). The Japanese built their prosperity around the sub-compact automobiles — it was a unique idea when they launched it in the 1970s.

This seed produced variant seeds that produced new fruit such as compact electronic gadgets. The Italians built powerful industrial clusters around the ceramic tiles and leather-ware. The Israelis have built their national prosperity around unique agricultural technologies and defence technologies clusters.

Our quasi-unique products, which had some form of originality were agro-based that vaporised when the agricultural cluster was decimated by the fast-track land reform programme. We have the original Mazoe drink, a product that is arguably unique. We need more of such unique products. The top exports for Zimbabwe are unprocessed and unprocessed primary commodities, mainly from the mining sector. Therein lies the problem: mining is not a cluster because it is based on extraction (as opposed to creation) and not built around any original product idea.

Original ideas would be high-quality tools and kitchenware. A powerful cluster of related industries where supplier industries are competitive themselves could be built around these products. What happens in the end is a diversification of high-value export sources. For instance, in the Italian ceramic cluster, design services alone generated $10 billion in annual exports. This is about double Zimbabwe’s annual exports.

Multiply

After being fruitful, the next stage is to multiply. Multiply is zerah in the original Bible language. It literally means increase. It is only possible to multiply when your product is unique. The demand for the unique product will develop beyond the domestic market, spreading to foreign markets. Multiply implies multiples. Original products generated by ingenuity can be sold in multiple countries. Our chrome, platinum and gold, just about every export product we have is not a product of ingenuity and thus cannot be sold in multiple countries. I admit that the Victoria Falls is an amazing piece of natural sculpture, unique in many respects but it cannot be reproduced — it cannot be multiplied. Israeli’s drip irrigation products and crop varieties are crafts of human ingenuity and are sold in multiple countries. One wonders why our unique Mazoe drink is not found in multiple countries. Could it be that the producers are content with dominating the local market, remaining in the first stage? Government’s drive for value-addition is not a bad idea for the medium term. Where the game is at is value-creation, not value-addition. We have unexplored opportunities in the agro-food sector to explore value-creation that can produce unique products that can be brought to the multiplication stage.

Fill, subdue earth

The third stage is “fill the earth”. This is about the unique product from human ingenuity gaining a global foothold, not just multiple foreign markets. McDonalds is a well-known example that illustrates the third stage. I gather from many people that our very own Chicken Inn’s chicken tastes are much better than chicken made by many global fast food outlet brands. Chicken Inn is still much of a local brand. McDonalds simply progressed through the stages of the model, taking their seed, multiplying it across the states of the US and then earnestly “filling the earth.” The fourth stage is subdue the earth. This is about maintaining a grip on global markets through constant upgrading.

At the core of our economic woes is a very basic truth: we are not fruitful as a country and this is shown by what we are importing — we are importing things that we never used to when our agricultural cluster was still intact. At the centre of our economic revival is doing stage 1 of the model well; we need to create as a country. We should not just produce anything and anyhow. We need a system of production; it is called a cluster. Every prosperous country builds its economy around one to three core products where it is globally competitive — it is not practical economics that a country can be competitive in every product.

This a critical truth that our country must embrace as we seek to be fruitful and competitive. We must choose a cluster to focus the energies of the nation. Our choice is not difficult — it is the agro-cluster which used to drive the economy — this is where our ingenuity to produce unique products with efficiency lies in the short to medium term.

This way we can at least enter stage 2 in the medium term and with greater determination enter stage 3.
Personal financial survival for 2019: Produce. Create.

Brett Chulu is a management consultant and a classic grounded theory researcher who has published research in an academic peer-reviewed international journal. — brettchuluconsultant@gmail.com