Talking Drums

The West African News Magazine

Computerisation: key to growth, wealth and job creation

By Kofi Tetteh

The push towards higher technology has come with substantial support from the government which has provided some finances and offered tax incentives. A consultant in micro-technology argues for an involvement in computerisation.
The World Bank's latest development report has been disquieting reading for Third World governments. It noted among other things "the crucial variable for developing countries is the ratio of interest rates to the growth of their exports earnings". Interest rates had averaged 6.8 per cent a year.

Undoubtedly, the preventive medicine would be to reduce the real interest rates and to raise the rate of growth of trade; to improve both the denominations and the numerator of this key ratio. Unfortunately, reducing the interest rate is one action the developing countries are impotent to take. However, we can improve the dominator of this ratio by the generation of more real jobs, and increasing wealth leading to the growth required.

It is with this background that I suggest that in Ghana, one of the many ways we can create jobs and real wealth is to embrace informatics - the marriage of computing, text processing and communication.

The fact is, today's technology innovations are tomorrow's survival kit. Too heavy a dependence on established companies and industries is a dangerous gamble when attacks from other countries our traditional Europe." on markets are bound to intensify.

Traditionally, Ghana had been the dominant force in the World Cocoa market as the number one producer. It is therefore necessary that we search for new job generation and wealth creation activities.

In some developing countries from which Ghana can learn, the governments concerned have entered into contractual arrangements and licences with OEM's and computer giants like IBM, ICL, Burroughs, Nixdolf, AT&T, ITT and NEC, setting up industries and factories manufacturing chips, semi-conductors, chip boards, high tolerance metal parts, moulded keyboards, plants for floppy discs for munication equipment.

South Korea, Samsung semi-conductors, produce B4 kilo-bytes random access memory chips. Because of a hardworking labour force, lower wages and effective quality control, Samsung can produce the 64k RAM chip at a price of just 80 cents, which is 25% below US price and 15% below the Japanese level. We can also take a cue from Gold Star semi-conductor, another South Korean company which is an off-shore manufacturing base for AT&T and Olivetti with which it has several technological and manufacturing agreements.

The push towards higher technology has come with substantial support from the government, which has pro- vided some finances and offered tax incentives. I could not agree more with Anatole Kalestsky of the Financial Times when he wrote: "In the short history of post colonial economic development, there are perhaps only two success stories which can genuinely be held up as economic models for other developing countries. South Korea and Taiwan are the only sizeable countries to have pulled them- selves up within a single generation from dire poverty to living standards approaching those in parts of Europe.”

The message for the government is to enter into licensing agreement with some of these high technology companies, setting up plants and industries to engage in high value added activities, utilising our large manpower resources.

The contribution of information technology to this success story is significant and substantial. I also find that as a result of a recent govern- ment policy which has streamlined import and licensing controls, India is now putting herself in the information technology gear. It has been reported that Sinclair's spectrum micro- computers are to be made soon in southern India.

Acorn computers are being assembled by the Government's semi- conductor complex in Punjab. Other companies entering the micro field in India include Commodore of the USA, setting up a project in Eastern India; Nixdorf of West Germany is to pro- duce micros and banking computers; Hewlett Packard and Apple are exploring possible tie-ups. India aims to increase production of mini and micro computers from 1000 a year to 100,0000 by 1990 as an expansion of overall production from $1.2bn to nearly $10bn in the same period.

Thus, apart from the job creation which this entails, the products go to increase the wealth of the country leading to the growth the country needs.

The change in gear is again exemplified in Singapore which is being dubbed 'Silicon Island'. The directional change in Singapore is towards higher value-added activities. Multi-national companies or their suppliers have flocked into purchase or manufacture disc drive, printed circuit boards, terminals and printers.

Coupled with this is the rapid generation of the so called 'brain service' the Science Parks which encourage research and development; higher value-added par excellence. An increase in higher value added leads to more wealth creation.

NEC, the Japanese electronics and telecommunication group, is setting up its own software centre in Singapore, while at government to government level a Japan-Singapore Institute has been established. These examples, therefore, do not leave one in doubt as to the impact of computerisation on jobs, wealth and growth.

Ghana cannot produce an IBM or an Apple yet, but we must endeavour to stay abreast with modern technology and developments and climb up the information technology ladder. If we are to see the generation of jobs and real wealth then we must shift into, high-tech gears, following the examples of other Third World countries like India, Singapore and Hong Kong.

The message for government is to enter into licensing agreement with some of these high technology com- panies, setting up plants and industries to engage in high value added activi- ties, utilising our large manpower resources.

It is not, however, for one moment being suggested here that there is avail- able the volume and quantity of venture and investment capital for very large projects. But what I am ad- vocating is that whatever resources are available for allocation to achieve national objectives, information tech- nology should be considered among the priorities for such allocations.

The impetus of high-technology on employment can further be seen and learnt from the experience of New England in the USA. The introduction of high technology industry led to some dramatic decrease in unemployment. In 1975 Massachusettes' 11.2 per cent unemployment was well above the US's 8.5 per cent. By 1984 it was down to 4.8 per cent compared with the national average of 7.5 per cent.

After losing 252,000 manufacturing jobs in the seven years to 1974, New England regained 222,000 in the next five years. Service jobs have increased, but the focus of revival has been high- tech companies, computers, defence, medical, space, communications and instruments. Some help in this case also came from the government in the form of tax cuts and incentives to prospective companies and entrepreneurs.

There are similar success stories of job creation and wealth generation in affordable. Reading and Milton Keynes in the UK. The boom in UK's 'Silicon Valley' - Reading and surroundings - has been based on high technology and high value added activities by groups like ICL, Digital and Hewlett-Packard. As a result, Reading has an unemployment figure which is far below the national average. It has been said that about 3,500 new technical jobs are created every year at Milton Keynes.

We therefore need policies, institu tions and incentives which will make more efficient use of our manpower re- sources, reduce unemployment, create jobs and wealth and reduce our vulnerability on external influences.

There is a need for effective implementation of policies that will let the people increase their purchasing power so that the availability of consumer goods, foods and groceries can be

In this regard, a firm and positive policy on information technology will go a long way to help growth.

talking drums 1985-08-12 Ghana's former vice-president speaks from exile