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Zim needs ICT policy
Caleb Chihota
June 30, 2005

http://www.herald.co.zw/index.php?id=44822&pubdate=2005-06-30

SILICON Valley in California does not have the monopoly or hi-tech brains. The successes of India, Ireland and Israel bear testimony to the fact that world-class innovations are possible anywhere, anytime.

There is absolutely no reason why Zimbabwe, too, should and cannot be a hot bed of hi-tech innovation and development.

For one, we have better weather than Ireland; and the Zimbabwe dollar exchange rate makes our country an excellent base from which hi-tech products could be developed and tested cheaply for international markets.

If Zimbabwe is to compete and claim its rightful position and skills in the global economy, there is need to foster an entrepreneurial culture in the citizens.

At present, Zimbabwe is a major importer of information technology products such as computers, printers, consumables and software, all of which are bought using scarce foreign currency.

It is the National Empowerment Group (NEG)’s view that in order to preserve the little foreign currency at our disposal, arrangements with overseas manufacturers, which could enable Zimbabwean companies to manufacture some of these products locally and under licence can be negotiated.

With more financial and infrastructural support, Zimbabweans can come up with world-class technologies that can revolutionise the business landscape the world-over.

Zimbabwe is blessed with a highly educated workforce equipped with a variety of skills that can compete with the world’s best hi-tech brains.

Ireland, for example, has become one of the leading manufacturers of information technology products in the world, yet the Irish manufacture the products under licence from international companies such as Microsoft, Dell Computers, General Electric and many others. In so doing, the Irish create not only jobs, but also earn foreign currency and contribute to the growth of their economy.

Our Government must be applauded for establishing a Ministry of Science and Technology Development, currently headed by Dr Olivia Muchena to support the innovations and technological advances initiated by local entrepreneurs.

The Government must also be hailed for its efforts in narrowing the digital and technological divide between rural and urban areas which is ensuring that every rural area has access to Internet services.

President Robert Mugabe has donated computers to many urban and rural schools to enable them to have access to information technology.

The land reform programme, also necessitates the establishment of internet kiosks in all rural areas and at all growth points where resettled farmers can access the internet for agricultural activities, especially on the growing of particular crops and for ease of communication.

The Government has also promoted investment in new technologies by expanding information technology and telecommunications infrastructure by licensing private mobile phone network operators and a fixed line operator.

The information technology sector should be viewed as a special sector of the economy, with the potential to increase productivity, boost competitiveness and encourage higher levels of growth.

NEG, however, believes that it is now time that all stakeholders stop paying lip service to the need for innovation and technical development.

The Information and Communication Technologies (ICT) policy framework has been talked about for a long time and for the sake of development of this important industry, there is need to finalise the ICT policy framework.

This is because the implementation of the ICT framework will certainly revolutionise the ICT industry.

NEG advocates for the establishment of an Information Technology Venture Capital fund that will invest in innovation and business incubators that should help to turn entrepreneur’s ideas into good technology businesses.

The proposed Information Technology Venture Capital Fund will provide the much-needed support.

The Innovation hubs and incubators could be in the form of:

• Facilities where entrepreneurs can share work space and ideas.
• Partnering students from NUST, Bindura University of Science Education, Chinhoyi University of Technology and SIRDC, to come up with ideas that can be commercialised.
• Speeding up innovations and fostering the transfer of ideas and skills between businesses and academia.

In Zimbabwe, we definitely need the establishment of an Information Technology Venture Capital Fund, whose main role would be to seek for new inventions and the financing of any technological development projects.

The proposed fund will enable us to come up with new technologies to process our granite, our tantalite, our platinum, our gold and many other minerals and agricultural products; all these can be developed into value-added finished products for export.

Pursuing such an initiative would help in import substitution, export generation, technology transfer and creation of new technology enterprises.

The venture capital market in Zimbabwe is keen to finance established and mature industries that no longer have the capacity to create new employment.

Our local venture capitalists have shifted their thrust from high-risk development seed capital investment to replacement capital for Management Buy-Outs (MBO’s), turnarounds and acquisitions.

The US boom has been driven by an unprecedented explosion of "risk capital" led by venture capital funds and initial public offering.

The first time, if we are serious about economic turnaround and development, we need a set of financial institutions devoted to systematically finding and funding innovation.

Here, will be for the first time, a market place in which entrepreneurs with bright ideas can actually get enough funds to challenge existing companies.

In the US over the past 10 years, venture capital funding has swelled from about US$5 billion annually to US$500 billion today.

New economic powerhouses such as Oracle, Cisco, Netscape, Microsoft, Amazon, Yahoo to mention a few, all grew explosively because they received venture-capital funding in their early days.

The availability of financing and the opportunity to get rich from a new idea drives innovation at a faster pace. And faster innovation, in turn, drives productivity growth higher, lowers inflation and accelerates investment. This is why some countries have benefited more than other industrialised countries from the technological revolution.

Although some industrialised countries have access to the same technology as their counterparts, they have lagged behind because they have been unable to match the risk-taking capabilities of their counterparts’ financial markets.

The Old Economy marshalled the forces of the financial markets to support investment in physical capital. The new economy marshals financial resources to support innovation.

The availability of capital for start-ups creates new competitors in virtually every industry. Existing players are forced to adapt innovations at accelerated pace-whether they want to or not.

This turbo-charging of innovation depends on easy access to capital.

We believe that we can build our own Zimbabwean car, mobile phone handset, watches, calculators and these could be exported in the region and internationally.

We can become the economic giant of Africa, only if as a nation we commit ourselves to this goal, that is the private and public sectors.

Raising funds for the Information Technology Venture Capital Fund can be implemented in various ways. Bonds can also be issued for the capitalisation of this fund. Government could issue and guarantee technology bonds for this purpose through the Minister of Science and Technology Development. Pension funds, insurance companies, institutional and public investors would be invited for subscription of these bonds.

NEG believes that there is need to lobby world leaders to make substantial investments in Information Technology (IT) as an integral package of any African development programme that will have to be adopted by the United Nations. If current trends are not counteracted, Africa risks exclusion from the world’s new economy.

Information technology skills to Zimbabwe and the continent are critical for the stimulation of an African Renaissance or economic revival.

* Caleb Chihota is the President of the National Empowerment Group.

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