Gov’t Needs Clear Policy on Private Sector Investment in Science, Technology

Science is not an alien thing for the Revolutionary Democrats. Rather, it is heavily related to them, as most were undergraduate students at various universities before revolting against the extractive feudalist regime of Haile Selassie and the subsequent military dictatorship, the Dergue. Had it not been for the political waters of the time, most were set to become doctors and engineers.

Things went in a rather different direction after their assent to power in 1991, however. The aspiring doctors and engineers became overwhelmed with the task of reconstructing the war-torn economy of the nation. What was at stake, therefore, pushed most of them to the realm of social science – economics, political science and international studies.

Considering the preeminent demands of the nation’s economy, one may argue that the decision of the Revolutionary Democrats to focus on building their capacity in managing the economic and political space was rational. This made complete sense if one discounts the temporal trend of economic reconstruction.

But economic development is a continuum of phases. Hence, it is hugely influenced by the factor of time. What is important at a certain period of time and phase of growth, is not at others. It may be this very truth that is catching up with the Revolutionary Democrats.

An earnest evaluation of the policy sphere under the leadership of the developmentalists shows that they are indeed aware of the needs of the time. They have rightly grasped the vitality of the shift in investment towards science and technology. But they remain hesitant in some aspects of their focus.

One does not have to go far to understand the shift in the mindset of the Revolutionary Democrats. Justifying their interest in enhancing the local capacity in science and technology is their decision; to make higher education proportional 70:30 in favour of science and technology; to establish sectoral research institutes, such as the Ethiopian Agricultural Research Organisation (EARO), the Textile Industries Development Institute (TIDI) and the Leather Industries Development Institute (LIDI); the restructuring of the former enterprises of the defence ministry under the Metal Engineering Corporation (MetEC) and the institutionalisation of the science and technology ministry.

Of course, one could also mention the ongoing construction of the National Information & Communications Technology (ICT) Village as yet another justification for the shift in focus of the Revolutionary Democrats. No doubt that this means a lot when compared to their stance in earlier years. But, this, by no means, is significant compared to the focus science and technology is given in comparable economies.

Ethiopia’s investment in science and technology, according to the United Nations, stands at 3.5pc of gross domestic product (GDP). This is very low compared to 27pc in Kenya, 23pc in Ghana, 19.7pc in Botswana and 14pc in Mauritius. It may be important to note that this investment involves training and education, product development, infrastructure, advocacy and marketing, and registration and certification.

If one is to go by popular perception, the time has been ripe for the Revolutionary Democrats to work towards enhanced investment in science and technology. Most cultures in the Ethiopian society associate higher values with people trained in science and technology. There has been established science and technology partnerships between foreign institutes and their Ethiopian counterparts.

Yet, the problems at stake, from political volatility to economic vulnerabilities, were forceful enough to orient the Revolutionary Democrats attention towards fixing eminent problems. That could explain their belated recognition to the importance of science and technology.

But, even then, the latest actions are done without any clear policy guidelines. There is no clear and coordinated science and technology policy that links it with agriculture, industry and services. No differentiation on where the state should focus and where the private sector needs to put its money in exists. There is no clear ambition on where the government under the leadership of the Revolutionary Democrats wants to take the nation in terms of science and technology.

Whatever happens in the sphere is a result of fragmented efforts by various agents. It is so haphazard and uncoordinated that it’s difficult to make complete sense of it, even after thorough analysis

In contrast, the world, including Africa, has ample success stories of economies that have managed to identify their competitive edge in science and technology, and invested in it to create visible national champions. The successes of South Africa in biotechnology, Kenya in ICT and Medicine, Mauritius in Production Technologies, India in Drugs and Medical Supplies, the United States in Communications Technology, Netherlands in food technology and Norway in genetic engineering show how the world managed to create competitive science and technology industries.

But there seems to an essential element missing in the Ethiopian case to simulate the global experience – the vibrant participation of the private sector in the science and technology arena. Whatever is being done in the sphere is being done by the public sector.

After all, there is no clear policy on where and how the private sector could operate in the sector. Neither is there clear incentives for investors who take the risk of putting their hard earned capital into the sector. Hence, the general situation is not favourable for investors in science and technology.

No economy that is able to create a vibrant science and technology industry, however, has managed to do it through public investment alone. Even the US – often cited by statists as having given a heavy push to its science and technology industry through state investment, especially during the industry’s infancy – has done it through the public sector. Essentially, investment in science and technology is undertaken by private investment.

Ethiopia could not be different. Instead of relying only on public investment, therefore, the Revolutionary Democrats have to create a conducive environment to attract private investment in the science and technology industries. They have to put in place clear and persuasive policies to bring global multinationals to the nation.

As much as the issue is that of Demitu Hambisa, minister of Science & Technology (MoST), it needs also to be an issue of the government at large. No structural transformation is possible without investment in science and technology. After all, continuous enhancements in productivity within an economy could not happen without research and development efforts.

Neither could the social benefits of economic growth, from better public healthcare to improved nutrition, be realised without investment in science and technology development capacity. And none of this could be built solely through public investment.

It is, therefore, time for the Revolutionary Democrats to review their rather fragmented policy stances on science and technology, and put in place the necessary instruments to attract private investment in the sector. Using the available tailwinds to facilitate the development of a vibrant science and technology industry, which has the capability to absorb the ever rising population of unemployed graduates, is very important.


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