THERE has been a revolution in Zimbabwean industry over the last 15 or so years. Anyone depressed by the economy should take a trip around any of the industrial sites in Harare. These are growing with new buildings going up almost all the time. It is almost impossible to find industrial premises to rent and even the “for sale” signs usually mean that a property owner with a full rent book wants to retire in luxury than a business that has gone bust and has had to close.
But the nature of this industry has changed dramatically. Most of the new buildings are factory shells, housing a vast number of small and medium businesses, rather than giant factories.
This is not a bad change. For a start, most of the new industries have higher average earnings for each employee and many are what amounts to partnerships between several skilled people. It is not unusual to find, in these businesses of five to 50 employees, that half the staff drive to work.
The old model of a huge factory with a handful of highly-paid bosses and hundreds of workers on the minimum wage appears to becoming rarer each year.
There is nothing wrong with this change. In fact, across much of Europe this is the industrial norm. Germany, the European giant, is built on these middle businesses, industrial companies with less than 250 employees and usually owned by a single family and run by a member of that family with an engineering degree.
Such industrial concerns require a high percentage of skilled workers. The old “English” model of giant factories employing large numbers of “working class” men on weekly wage and weekly notice when fired, supervised by a small gang of middle and upper class managers, is dying out.
Unfortunately that “English” model was all too common in colonial Rhodesia, large numbers of cheap semi-skilled black men supervised by a handful of whites, with Bulawayo regrettably being designated the industrial centre and having more than its fair share of such dinosaurs. And that is perhaps the major reason why Bulawayo has been so badly hit by the economic change while Harare’s industry continues to grow, albeit in a different direction.
It seems clear that any industrial policy for Zimbabwe must incorporate a major component of these new mid-sized businesses. They tend to create skilled, better paying jobs; they ensure a larger number of owner-managers, and they are easier to create and cause far less damage if they are forced to close.
In an African context, Zimbabwe has certain advantages to becoming a centre of specialist skilled industries. The educational policies of the last 33 years, produce every year, a large batch of men and women who can be trained; we have a tried and tested apprenticeship scheme, backed by technical colleges, that can impart many of the skills we need in both practical and theoretical aspects.
We need to grow that, and one of the jobs of the new Education Minister must be to bring in more technical subjects into our schools, while his Higher Education colleague looks at expanding technical colleges, adding more and seeing how universities can boost the number of engineers. We probably need to be able to ensure that those who do well at technical colleges can enter graduate ranks with the minimum of fuss and no duplication of what they already have been taught.
The other thing a Government can do is make it simple and cheap for anyone to start a business. There should be a minimum of bureaucracy. After all, what is really required? A new business should not use the name of an existing business, it needs to have a safe working environment, it must be in a suitable area (you do not need hammering in a residential area for example), it must be known to the tax authorities, and it needs to follow modern labour law.
If we could compress the registration steps to 10 business days, we would have a really business-friendly environment. It should even be possible to have a provisional registration if some steps, such as the labour law aspect or the advertising for objections by a city council, need longer. While these might be necessary, they are only a formality in 99 percent of cases.
Zimra for taxes, the Registrar of Companies for a legal existence, NSSA for safety and the local authority for rates and zoning should be the only required stops before opening a business, with the rest following as other entities that need to know are told by these four.
Governments do not have to plan these businesses. There are plenty of bright skilled people ready to go it alone. They do not need help as a lack of hindrance.
Where Governments might have to look at some planning is with the few giant enterprises still required, steel-making for example. But even this planning might simply be making it easy to start.
We have several huge and successful industries — tobacco processing, cotton ginning, cement making — where the Government owns no shares and does no planning. But it certainly made it easy for these to start up.
Generally, Governments are not that good at micro-managing. Almost every country has switched, the most spectacular being China, whose Government is still formed from the Communist Party, but where the Government ensures that pro-business policies and infrastructure are present and leaves the industrial planning to the market. And even infrastructure is largely a catch-up.
So we think Zimbabwe’s industrial emphasis should be on making business easy. Water in Bulawayo, good roads to deliver goods, Zesa able to expand and provide energy, swift and easy formalities to open a company, simple tax codes, adequate educational back-up to ensure supplies of skilled men and women. The list is not long, but it does need to work.
And if anyone wants proof that this can work, then spend a day hunting down a “to let” sign in Graniteside or Msasa, or Bluff Hill or Workington or Willowvale or Southerton. And try not to get too impatient when your search is slowed by the brick lorries.