ACET’s Anver Versi attended the Japan-African Business Investment Forum in Addis Ababa and wrote his thoughts in African Business magazine.
There is little argument today that manufacturing is the most powerful engine for wealth creation. Manufacturing has been the magic key that has allowed some of the poorest nations on earth, including China, to escape their condition and lift themselves to undreamt of heights of economic power.
Globalisation and a burst of innovative technologies in manufacturing unleashed unprecedented floods of products and in the process raised living standards across the board–-except in Africa. After a promising start in the 1970s, manufacturing in Africa stagnated and was finally killed off by waves of Structural Adjustment Programmes.
But manufacturing is now back. An increasing number of African countries see it as their transformational gateway out of poverty and into a comfortable middle income status. Kenya has just produced its first ever industrialization blueprint and Ethiopia–which is currently the fastest-growing country in the world– wants to raise manufacturing from its very low base a decade ago to form 25% of GDP by 2025.
But global manufacturing is a cut-throat business. The winners are those who can deliver quality at least cost. One of the keys to manufacturing competitiveness is the quality of human skills capacity and advanced process available—areas in which most African countries are desperately short.
But as those of us who attended the Japan-African Business Investment Forum in Addis Ababa last month found out, there is a way out of the impasse. It is called kaizen and Ethiopia is leading the way in Africa. The Japanese kaizen philosophy stands for continuous improvements and the belief that big results come from many small changes accumulated over time. It was this philosophy that enabled Japan to rise from the debris of its war-shattered economy to currently reign as the world’s third-biggest economy.
In 2008, Ethiopia’s late Prime Minister, Meles Zenawi, witnessed kaizen at work when he visited Japan. He requested the Japanese to bring the philosophy and install all the systems that came with it to his country. He created the Ethiopian Kaizen Institute and set into motion a transformational process that continues to astound not only the world, but many Ethiopians themselves.
Getahun Tadesse, who runs the institute and is known locally simply as ‘Mr Kaizen’, speaks about the system with a zeal of a convert who has witnessed a miracle. “Productivity has almost doubled, waste has been slashed and quality is approaching world class,” he said. (For example, a shoe factory, applying the principles of kaizen raised its productivity from 5,000 pairs a day to 8,000 without any additional equipment.)
The Japan International Cooperation Agency (JICA) is taking the system deep into the heart of Ethiopia’s rural countryside and applying it to all sorts of activities, including crafts. The difference it is making to the lives of the peasants is astonishing. Demand for kaizen is overwhelming and a lot of it is coming from other African countries. Last month Japan and Ethiopia signed an agreement to construct a kaizen training centre.
Is kaizen the magic key that Africa needs to unchain its manufacturing genius?
*Anver Versi is the Director of Communications and External Relations at the African Center for Economic Transformation (ACET).