White Collar Cubicle “Rats”
This post is prompted by a situation I found myself in last week, which got me thinking about the changing dynamics of this global economy we are now living in and the impact it will have (psychologically) on many people ( particularly those who are older, but still not old enough to retire). I think this post will apply to anyone regardless of the geographic location in which you are based, but first, I want to begin by outlining the situation I found myself in last week.
So, last week, a temporary employee was sent over to our office and her job was to help us out with very simple administrative tasks that we needed to get done. However, on the second day that this employee was there, we run into problems with her because of a combination of factors, which included: having a bad attitude, arrogance, an inability to comprehend simple instructions and a refusal to follow what she was being told to do.
From the short conversations I had with her, I was able to extract certain biographic data about who she was. She was a woman in her fifties, who’d worked for 20 years at a large insurance company before being laid off seven months ago. She was now collecting unemployment, but she told me that once she noticed her savings account gradually diminishing, she decided that it was time to get back into the work force and try and get a full-time job before her unemployment benefits run out. So, here she was, at our offices, ready to work (or so she claimed).
Anyway, as soon as we started telling her to perform certain tasks, she just started getting flustered, angry and in some cases, even depressed. At one point, she even started yelling that she wasn’t going to get “ordered” around by fifteen different people. It wasn’t the way she worked and she was going to call her temp agency to find out exactly what was in her contract so that her job could be clearly defined. Her mental breakdown, which occurred only on the second day of work, was shocking to me. Afterall, her was an unemployed woman, who clearly said that she needed to find a full-time job because her savings were diminishing, but faced with the reality of having to perform (what she considered) to be menial tasks, she just lost it and was unable to function.
So, to make a long story short, we were forced to get rid of her by the end of the week on Friday. We called the temp agency and asked them to tell her not to return on Monday. Nobody in the office (or anywhere else for that matter) has time to deal with people’s attitude issues or mental breakdowns. However, as I was taking my walk home with my ipod in my ears, listening to Fally Ipupa’s latest album, I began to think about this 50-something year old woman and what a difficult position she was in. Here was a woman who simply had not come to terms with the realities of this new, global economy. She had a 3 year old grand-daughter who she was supporting because her 20-something year old son couldn’t afford to do it on his own, her savings account was dwindling and yet, she was wailing to me about how she wasn’t going to accept just any job, but what choices does a woman like this really have?
From speaking to her, I could tell that she was not highly skilled. Her grammar was very basic, she had trouble following what I thought were very basic instructions and even needed a calculator to do simple math (14 + 11 = what? hello?). So, I asked myself, how on earth was a woman with such low skills able to survive in the job market for so many years? and if you think about it, the answer to this question becomes quite simple. When an economy is pumping and doing well, many people who may otherwise never be considered for any job, are able to float by on their sub-standard skills. This is especially so if you were lucky enough to work for a large corporation which had hundreds of thousands of employee’s where all you really had to do is hide in your cubicle and with a minimum amount of effort, you’ll be able to coast by and collect a paycheck at the end of every pay period and I think that’s what this woman was able to do for the 20 years that she worked at that large insurance company, but now, things are getting tougher. Companies are laying off thousands of people and getting back into the work force is becoming tougher because it’s an employer’s market. i.e. with so many people looking, employers can afford to be picky. Why pick a 50 year old who has no college degree and no discernible skills when you can get a 27 year old with a graduate degree and high skills who’d be willing to work for the same pay?
Heck! why even pay the 27 year old when you can get a 23 year old in India or China willing to work for 60% less? And this is why, in a global labor market, the era of the white collar cubicle rat is slowly coming to an end. I saw a comment in this excellent article in the New York Times on this inevitable outcome of labor. The comment follows:
“In a globalized economy, the supply of and demand for labor will equalize over countries. There are no governmental policies that can stop the global forces of supply and demand for labor, which determine all our jobs and wages. What? Green jobs? as soon as the technological improvements occur, they will be exported to China to be implemented. Hydrogen cars? Why, even if that highly dubious technology is viable, should it be manufactured in the country with the highest labor costs?”
I’d encourage everyone to read that article, which I’ve posted above this quote and to breeze through the comments, which I found to be very insightful because wherever you are in the world, you will be affected by this global labor market.
India and China look like they’ll become the biggest beneficiaries because they have large populations of highly skilled people who are very productive. How a small country like Kenya deals with this reality, I don’t know. The only answer I can think of for young Kenyans is migration. It happened in the 90′s when the economy collapsed under Moi and I’m predicting that it will continue to happen as the population of the country continues to rise.
Kenya’s economy simply cannot afford to support a population of 40 million people, 70% of whom are under the age of 30. In the 1970′s, Kenya’s population had around 8 million people. It has since quadrupled to 40 million. If it quadruples again in the next 20 years, you’ll be looking at a country of between 80 – 100 million people. It’s not sustainable. If they hope to work, young people are going to have to leave the country. If they don’t leave and remain there frustrated, the country will simply explode into violence.
Your thoughts…
ke,
Globalization is a good thing for Africa. Otherwise Africa would be a closed economy. Africa is yet to wake up to the opportunities that exist in the global economy.
Kenyans are too busy trying to solve their never ending political squabbles which seem to metastasize from every end of the whole structure.
Anyway without painting a gloomy picture for Kenyans. I would encourage young Kenyans to seek opportunities abroad and to improve their skills to improve the situation.
HAHAHAHA!!! LORD HAVE MERCY. FROM THE COMMENTARY AND I QUOTE!
“The American economy consists of 70% consumer spending. As we have outsourced living wage, professional jobs to India, China, and the Ukraine, the American middle class is quickly declining. Someone along the way forgot where their consumers come from… a large, upwardly mobile middle class.”
No, they’re holding out for China, India and East Europe to begin producing the next generations of braindead consumers racking up debt, paying outrageous prices for homes (largely due to xenophobia).
Then the USA will become the source of cheap labor.
KE
Kenya’s economy will get a massive boost from regional integration. Labour and capital will increasingly become mobile within the region. It already happening.
Someone here advised you to read a book titled “The Black Swan”. I dont know if you read it but its very instructive.
In a nutshell, the proposition is that economic theories do not work – including your own production theory. The agenda is driven by unforeseen events which have huge consequences.
I was surprised to learn that there are over 70000 Kenyans currently working in Southern Sudan (and not just for the NGOs). That is why I find your obsession with Kenya quite surprising and myopic. Its obvious that Kenya cannot survive on its own. Broaden your horizons.
Even countries you like to compare Kenya to e.g. India (with its massive problems), China and Brazil consist of integrated economies. India is a subcontinent, China has different countries within it. The US and the EU are other examples. Kenya is on the right path and it will very soon gather critical mass. Integration is the future.
Annon:
What you’ve just outlined really doesn’t make sense to me. At all.
It sounds like a prescription from a world bank office. First, it was all about structural adjustment programs and those didn’t work. Now, they’ve moved onto this concept of integration. Integrate this, integrate that, but it won’t work. Integrating economies that produce not much of anything is not going to lead to economic growth or even reduce poverty.
The only exception is if you are an African country with a rich resource like oil or gold, which you can then export, but if you had such resources, why even bother integrating with a resource poor country? What will they give you in return if they produce nothing?
I read the Black Swan and it was a book that hinged more on this issue of finance and trading. It wasn’t really about third world countries and what they need to do to propel themselves out of poverty.
The countries you mentioned (India, Brazil and China) produce goods. That’s how they’ve eliminated poverty, not by mere integrating (whatever that means).
In terms of Southern Sudan – Why even bother talking about that “country” or zone? The Southern Sudanese want access to the oil, but the northerners are not going to give it to them and that’s why everyone familiar with that country is worried stiff about a renewal of that 30 year old civil war.
So, again, you don’t build an economy by making nothing. I don’t know why people have such a hard time conceptualizing this.
Kenya’s agrarian economy cannot support it’s growing population. The number of people is expanding, but the land mass is the same.
KE
I didn’t know India has eliminated poverty. That is a new one to me.
Even China, which is way ahead of India has not yet managed to eradicate poverty?
What about Brazil?
You should do your research properly before making sweeping statements.
ANNON
I think you have a point in integration. Integration is not a World Bank concept as KE thinks. This is a local agenda.
We who live in Kenya want to do business in Uganda, Rwanda, Tanzania, Burundi without the bureaucratic hassles that we experience today. Rwanda is far ahead by eliminating work permits for us Kenyans. We should receiprocate and allow them to work in Kenya without work permits etc
Anyhow, integration will happen in Africa and it is already happening – whether KE likes it or not.
Annon:
India, China and Brazil have reduced their levels of poverty mainly by creating new wealth, which essentially means, ramping up your production of goods and services (so, yes, they still have poverty, but the levels are going down).
But maybe you can explain to me (more clearly) how integration will reduce poverty in Africa.
What is it that Burundi makes?
I mean, what exactly are you integrating?
This is laughable.
The endless squabbles between Annon/Anonymous and good ol’ KE. At least you are a consistent bunch. Someone should put a picture of KE right next to the word “production” in the dictionary.
“What do they produce?” is your trademark. At least you are consistent from post to post.
No point in shooting down this “integration” idea(someone explain?) But I guess you mean more efficient trade flows within the continent? I can see how that can help certain industries.. but wait a minute, WE COULDNT POSSIBLY NEED ANYTHING FROM RWANDA RIGHT GUYS? How stupid could I be, they’re just a poor war ridden country.. no point doing business with them, right KE? They produce nothing and we have no sufuria exporting millionaires yet.ARGH!!
lol.
And for the record KE could you finally tell us what Kenya should and can PRODUCE that will lead us into an 1st world economy, or at least 2nd? Something we supposedly can do cheaper and more efficiently than any other China and India? Cause as much as you go left and right with your posts/comments, your posts all read the say the same thing, unless we become a global producer in whatever sector, we’re nothing and will continue be nothing.
Boss Major:
I really don’t know what this integration business entails.
Rwanda grows coffee. Kenya grows coffee.
Kenya grows banana’s. Uganda grows banana’s.
What are ya’ll goin to be integratin’ when you don’t make jack? Maybe you can integrate all the regional versions of ndombolo.
Boss Major:
I’ve said before that the only thing I can think of that would work would be outsourcing cheap back office work that could take advantage of Kenya’s young, English speaking population who’d be willing to work for pennies on the dollar.
However, even with that, you’d still need some sort of infrastructure and support from the government and I don’t see this being forthcoming any time before 2012. I am now hearing that the only thing that will be happening between now and 2012 will be stealing. They will be massive theft because everyone knows that Kibaki isn’t coming back and it will be their last chance to eat.
I’m assuming the world won’t let Kenya collapse in 2012 — mainly because Somalia is such a mess and is such a danger, but beyond this very low baseline, who really knows what will happen?
KE,
Some questions surely need to be rhetorical…
What are the benefits of Integration ?
just ask yourself ….
What are the benefits of trade deals ??
Then fill in the blank …..
Jesus Christ !!
Mdomo Baggy:
It’s interesting you mentioned trade deals because I think countries are beginning to realize that trade deals amount to nothing more than government interference in free markets.
It leads to embargo’s, protectionism, unfair practices (like subsidizing farmers in the west with taxpayer monies so that they don’t have to compete with cheaper farmers from third world countries, etc, etc).
So, back to my point on production. If you make something that people want, they will buy it from you. Why do you need a trade deal or integration to sell it?
What you should be arguing instead, is for African governments to get out of the private economy and let people (through the forces of free markets and supply and demand … let people trade where they want and with whomever they want).
Why does a coffee farmer in Kenya have to sell his coffee through a government controlled co-op board? Moi milked these co-op’s to enrich himself.
Therefore, the case should be made for African governments to focus on implementing the rule of law (that protects private property) and building infrastructure so that people can move their goods around. After that, stay out of the economy and let the free market work (and this has nothing to do with integration).
These words: Structural adjustment programs and integration are just cockamamy words drawn up by theoretical economists at the world bank and then Africans just adopt them wholesale without really thinking about what it means for them.
KE
What is it that Rajasthan in India makes?
What is it that Luxemborg makes?
What is it that North Carolina makes?
Stop pretending that you do not understand what integration means. And by the way, integration and your much loved baby production are not mutually exclusive. But if you just produce, but you don’t have a market, then how is production helping you? The markets in Africa must become fully integrated. And I think the Kenyan govt and other govts in the region are on the right path. Integration should be speeded up. This is not a world bank term – it is a very traditional African concept. On the other hand, your much loved production is a borrowed idea which will not necessarily work in Africa.
I call horse**it on this whole Integration tomfoolery. The fifty million other ideas for Africa were perfectly fine, but of course, everything must be complicated.
We forgot to go to work and do the damn job at hand till it’s complete, no excuses or exceptions. Just FOCUS. The Kenyan culture doesn’t seem to stress success and a sense of urgency at all levels. That will continue to plague us. Some of you have the opportunity to work and conduct business abroad. It’s impeccable the work ethics some cultures have.. and it’s no wonder they thrive. what went wrong with Kenya, who knows.. but all this integration crap is all relative. I’m hugging KE’s bandwagon on this. Just don’t know about the production part yet as such. We can work with what we have for now until we get to that stage, because even if we had the next oil discovery, we do not even have the capacity to milk it for what it’s worth. Here will come in the handouts from whatever government n bla bla bla. The basics are not in place.
Now, I could worry about this bullshit all night long, but I’ll seek comfort in the dream that my company will hit record numbers by 2015. Because my friends, money allows me the luxury to not give a fuck.
# Home to several leading truck manufacturers including Daimler, Mack and Volvo Trucks
# Home to the headquarters of two leading bus manufacturers – Daimler and Thomas Built Buses
# Home to leading heavy equipment manufacturers including Caterpillar and John Deere
Charlotte is now the second largest banking center in the United States (after New York), and is home to Bank of America and Wells Fargo subsidiary, Wachovia. The Charlotte metro area is also home to 5 other Fortune 500 companies.
I just thought I might share some of things that go on in N.Carolina, I was actually quite surprised. The list is endless.
Boss Major:
Thanks for providing an answer that I was going to give, but let me go further.
Annon:
You cannot pick individual states within one country and ask what they produce. Rajasthan is part of India and so a fairer question would be: What does India produce and I’m sure you know the answer to that question (they make drugs, cotton, cars, steel, they have outsourcing centers, etc, etc).
Boss Major already answered your question about North Carolina, but again, you should have asked, what does America produce and I’m sure you know the answer to that question: Apple, Google, Microsoft, Coca-cola, Proctor & Gamble, Johnson & Johnson…all of these are American companies. Let’s throw in movies and television now that Avatar has grossed over $1 billion dollars worldwide. You get the picture now?
Let us now move on to the second part of this discussion and let’s focus on East Africa (Kenya, Uganda, Tanzania).
Integrating these three economies will not really make much of a difference on the ground because:
a) All three are low producing countries
b) All three have very similar economies (i.e. agricultural/agrarian economies that pretty much grow the same foods.
And actually if I was a country like Uganda, which is on the verge of discovering oil, I wouldn’t even bother integrating. I’d just sell my oil and get my cash. Nigeria is currently getting $100 million dollars a month from the sale of it’s oil. Why would a country like Nigeria, flush with it’s oil wealth, worry about integrating with a poor African neighbor? What would they gain from that?
Let’s move on to Tanzania. I am now hearing that Tanzania maybe sitting on huge deposits of gold. The current price of an ounce of gold is over $1000 dollars. For just one ounce. Now, if you are Tanzania and you can sell your gold deposits to richer countries like India and China, why would you bother integrating with Kenya? They won’t need Kenya if they discover that gold.
So, again, the fundamental problem with Africans is that we have a culture that doesn’t produce anything. Integrating with other non-producers, will not make Africa richer.
This is why I’m saying that the whole topic of integration is a world bank euphemism that has no link to any practical reality — just like the structural adjustment programs they came up. Those programs made no real difference.
I suppose one model of economic integration would be the European Union, but as I look at it now, it doesn’t seem to have done them very much good.
The following member countries are on the brink of essentially bankruptcy:
Greece…about to default on it’s loans
Spain….it’s real estate market collapsed.
Ireland…Again..real estate collapse
Britain…They’re just printing money to stay afloat now.
I don’t know, maybe slovakia is doing well. Do you know?
How did integration help these countries?
Perhaps on a more entrepreneurial side.. The fact that Kenya is behind presents lots of opportunities. More visible than in developed countries. Perhaps we can
kill the next person that mouths “integration”take advantage of this trade flow effect as I saw it was in effect in some industries.. it’s a great opportunity to find new customers for your business, expanding your network.. yadda yadda. Just make your money. Hogs get slaughtered. Keep it simple. Milk the system. You live once.Shalom.
KE
I believe the questions by Anonymous above were rhetorical meant to show you that integrated economies are better that isolated units in our age. Rajasthan does not produce much but it is kept afloat by the rest of India. North Carolina does not produce much but it is kept afloat by the rest of the union etc. That was just an analogy, correct me if I am wrong.
The same goes for the EU. The only country that is a serious producer in the EU is Germany. The others only benefit from the harmonised and integrated European Economic Area. This is what should happen in Africa.
Its already happening. A good example is SADC which helped Zimbabwe stay afloat during the recent crisis.
Boss Mayor
You seen to get the point.
Perhaps I can add a bit of context to this discussion.
KE, I think you’re lacking the perspective of the private sector in your understanding of what integration entails and in the process undercutting your arguments about actually producing things.
As a business person in Africa, of course integration helps me! If I have unfettered access to a regional market (ironically governments allowing me to trade freely and enjoy the fruits of a free market through get this regulatory and legislative fiat) I sell more goods and services and make more money in the process.
Or let’s break it down further, and look at the East Africa Customs Union. I live and work in Arusha, Tanzania. I am elated that regional integration is now getting some teeth because:
1) I look forward to a flood of highly skilled Kenyans coming to Tanzania to boost a very weak laboorforce. Granted this is more a win for Kenya and less so for Tanzania hence their recalcitrance in moving forward with a Customs Union but it doesn’t change the facts or reality of me sitting here in Arusha. Kenyans are coming, and that is a good thing as an employer
2) I look forward to Nakumatt finally getting the approval to set up a supermarket in Arusha. They will dominate and drive everyone else out of business, great for Nakumatt and great for me but perhaps not so great for local business….such is life.
Your assessment that all economies are the same is WRONG. If you spent enough time or lived in East Africa….let alone travelled it would become pretty obvious that despite the fact that we all produce bananas, coffee, tea and sisal does not mean the dynamism of all our economies are equal. Hence the reason why African economies are integrating, Kenya has a much more robust manufacturing and services sector consequently private business would like to reap the financial benefits of a larger market especially when your options are a captive larger market that is under-developed e.g. Nakumatt opening in Arusha is like taking candy from a baby. Tanzania wants integration because they accept they need an infusion of better skills, technology and acumen from their neighbors otherwise they will never build a sustainable local economy….Rwanda wants integration because of the unfetterd economic and infrastructure access to a landlocked country, ditto for Uganda……Congo wants to join the East Africa Community because frankly they are a basket case at this point and could benefit from regional investments both in human resources and capital. I could go on and on.
I could go on and on but my point is what integration means for me, living and working in a tiny corner of Africa.
Sijui
Thank you for the clarity of your post.
I am beginning to think that KE is just refusing to acknowledge the benefits of integration.
In fact, as to your Nakumatt point, it might even spur the locals to style up their act and set up competition – miracles do happen!
Sijui:
Actually, I’m not lacking the perspective of the private sector when I talk about integration. In fact, what I am saying is that government’s are way too involved in the economies of their countries and integration (whatever that means) will only expand this government bureacray, not create these efficient private markets.
I’m not surprised you mentioned Nakumatt. That seems to be the one thing everyone mentions when they talk about integration (a grocery store selling food).
And you don’t need bureaucratic integration to move labor around. In fact, that’s what the original point of my article talked about. i.e. in this age of global economics, we now have global wage arbitrage. If you have the skill set that an employer desires, they’ll be able to hire you and in many cases, you won’t even necessarily have to move and live in that country! Thanks to the advent of technology, you can now work from anywhere if you have a computer, a phone or internet access. I can hire an Indian programmer without me having to move to India. A coffee farmer in Kenya should be able to find and sell his coffee (directly) to whomever he chooses and they don’t have to be based in East Africa.
So, what people should be advocating is not a bureaucracy that will create a false sense of integration (again, whatever that means) — what you should be advocating is for corrupt African governments to get out of the private sector and allow people to do their thing. You don’t need a whole bunch of new rules to do that.
So, for example, if all three countries had a good and reliable road network or even wider transportation network, goods could be moved very easily between countries.
Annon:
To say that Germany is the only real producer within the European Union is just silly. I just have no idea how you are formulating your arguments(especially after Boss major told you what is produced in North Carolina, which in addition to what was mentioned also has a thriving research triangle of engineering and software firms).
Maybe an explanation on how federal systems of government work would clarify things for you.
Sijui:
I thought you were in Ghana and were focusing on West Africa? Were you setting up a company that sells software to trucking companies or what exactly were you doing again? refresh my memory (because I do want to ask you about dealing with bureaucracy, infrastructure and those sorts of things)
I don’t get where you came up with such a conclusion, then challenge my N.Carolina response. Yes, I did get what he meant, I just provided a valuable answer. Obviously you do not know the value of that state after a thorough response, so I will not even bother to explain.
you’re just a nobody.Sijui,
I applaud your valuable input, we need more of your perspective as someone on the ground. You presented a problem and showed us the solution it presents and how it affects your daily life. Personally, I’ve always believed in conducting business throughout E.Africa as an intermediary goal, best would be throughout Africa. It’s good to see it picking up momentum as we move along. This is all fine and dandy but do tell us some of the barriers you face.. is it mostly infrastructure, red tape?
If you are selling software to trucking companies as KE mentioned, did you reverse engineer other products or do you resell? I can imagine that’s a sizable market especially when you put all 3 countries in the mix.
Given the fact that India and China are getting the Lions share of this globalization conundrum doesn’t that already mute your point that non resource African countries are NOT disadvantaged because of their fragmentation and lack there off of such advantages as large stock of skilled cheap labor ??
Your arguments beg many questions….. If China and India have an upper hand in cheap skilled labor and production…. Then that does not write off the rest of the countries that don’t have this advantage… They can have many options available Trade agreements and Integration are such avenues. Europe is already ahead in this movement.
What ANON and Sijui are saying is really simple…. Given the advantages that these countries have then… It would only be prudent to reduce the barrier to trade through integration and trade agreements. What you are saying on the other hand is that African countries should continue doing things the same way (produce and sell without trying to securing trade fairness and reasonable market penetration) they been doing them and ignore the changes that have occurred in the world trade arena. Of course Einstein once said doing things the same way and expecting a different result is madness. But assuming that every person in this discussion is sane and sees the emerging issues of this global trade arrangement clearly then from your own conclusion If the other non resource economies don’t engage in trade agreements as a cushion then that would only be a recipe for economic stagnation. Either you are plain blindsided with these emerging issues or you are the most pertinacious pound of flesh since Sarah Palin.
Integration increases bureaucracy(give me a break !!). I don’t know where you get this idea of Integration increasing bureaucracy. I know now i don’t need a passport to work in Rwanda. I know soon EAC countries will be able to have Ipo’s in all EAC countries. I can freely sell visit the country without any fear of state interference. Why don’t you give us your own example of where Integration has increased bureaucracy ?
KE,
I’ll try to make it very simple so you can follow. Production is stimulated by market demand. If based in nairobi produce wine..you can market to kenyans..but with intergration your my market grows to tz ug rw etc (more consumers) . Thats why china and the US are bedfellows… each salivating at the others market..Google,microsoft etc..CANT STOP STaring..Yet almost everything in the us stores is made from china. Lets learn abit from the big boys ! You can produce all you want, but without a market its useless .
Mwalimu:
Yes, production is stimulated by market demand. So, let us start with what you have laid out for us.
1) Is there market demand in these African countries, especially given the high poverty rates? i.e. Market demand is stimulated by a thriving middle-class. i.e. by those who have disposable income. Therefore, even if you “integrate”, these economies, if the middle-class within ALL the countries is too small, your market demand will not be very high.
2)Then, if we move along with this point and use China as an example, the way to increase your home grown middle-class is to export your way into it. i.e. ramp up your production of goods that people in other richer countries use and need and export the stuff to them.
Gradually, over the course of 20 years, you build up a manufacturing base, which slowly begins to provide jobs for the masses and thus, starts the inception of the growth of this middle-class.
So, in conclusion, I’m still not seeing how integration helps in countries that have a low percentile of middle-class workers and that really produce the same low-end agrarian goods.
The way to reduce poverty is to create new wealth. You cannot do it through redistribution. So, how does integration help create new wealth or new industries? It sounds to me that all it does is expand (slightly) the market share of ALREADY EXISTING companies, but doesn’t create anything new.
**
Interesting article on Tanzania building a $300 million dollar fiber-optic cable with help from China.
http://af.reuters.com/article/.....7N20100202
I’m beginning to think that living in Tanzania might be a better option than living in Kenya. It’s peaceful, no tribalism, you have beautiful Zanzibar and the Serengeti, but I don’t think foreigners can own property.
Mwalimu, mdomo baggy, sijui
You can’t break it down any better. This is almost like spoonfeeding. But then again, KE is based in the US working in an office. So her theories may just be that – theories. I don’t think she has any real experience of doing business in Africa. I remember smuggling mitumba from TZ in 1989! Thank God all that will come to an end with more integration. Way to go.
KE
You cannot be serious anymore pal. Get off this high horse that US has painted for you on how economies/countries should function. That is what exactly I see behind your comments. When you combine those three countries, the middle class is not too small. It’s bigger, much bigger than it would be minus this intrergration. There is more money, bigger markets and momentum is accelerated three fold. Do not complicate a simple concept.
Obviously in the short run, it’ll more than likely Increase certain companies market share, but in the long run like any profit motivated business.. They’ll set up shop, be it offices, factories etc instead of working in their home country only.
I don’t mean to digress..
actually I freaking dobut does anyone have to offer any perspective on a more entrepreneurial side of things? I’d like to know if any of this stuff is touching the readers in some way shape or form or their business. Sijui offered some good insight.. Perhaps there is someone else out there that can give us their view.And also, if there any other entrepreneurs, what does all this mean for your business?
KE..
“The are so many people without shoes here…we need to bring the whole factory here. I’ll NEED more MARKET for my innovation.
I’ll try another example how the market stimulate production.
Maybe you’re familiar with Thomas Bata story.
It happens that a salesman was sent to africa to see whether they can market there but went back and reported that nobody “WEARS SHOES over there”. He was fired and a 2nd salesmen was sent back…big news
KE,
“in the economies of their countries and integration (whatever that means) will only expand this government bureacray, not create these efficient private markets.”
This comment does not bear out in reality, believe me.
Economic integration does not automatically translate to heavy handed government interference. Yes the opportunity for that to happen is very, very high but in reality what normally happens is that governments are overtaken by events meaning the tidal wave of private sector activity outpaces most governments ability to interfere and at most they become an irritant.
Then there is the issue of some naivete on your part, the free market does not operate in a vacuum. It always has and always will function within a political framework…it does so in the U.S., China, Timbuktu and where have you. Good infrastructure and communication links within Africa don’t just rise from the mud like a Phoenix……they are preceded by an enabling regulatory, legal and investment framework.
So whilst I agree with you that African governments should get out of the way, I am also fully aware that at some level their involvement is required otherwise there is no ‘free market’ to speak of.
As for your example about free flow movement of capital and labor……this is a bit of a chicken and egg analogy, free flow is guaranteed only if a government decides to be beningn in a marketplace so it still requires their engagement at some level i.e their consent to not interfere.
Which brings us back full circle to the EA Customs Union and other regional blocks:
1) You are right that in the global marketplace, investment and resources do not need to be tethered to a place but that point becomes irrelevant when the objective is trade and commerce within a certain marketplace, in this case it happens to be East Africa. I’ll use myself as an example, our company (husband, I and partners) buy hardware from the U.S. and Canada, have a software developer based out of Australia but that does not negate the fact that we have to SELL OUR PRODUCT SOMEWHERE…..in this case the Africa Region.
2) So yes the last thing we need is inefficient and incompetent government bureacracy, BUT AT THE SAME TIME we need enabling legislation to do business across borders and that cannot happen without government involvement.
3) In closing, I absolutely agree that in a perfect world you would have minimal government interference, and in the case of Africa, even less than that but being that we will live in the real world, I’m more than happy to deal with an inefficient and incompetent bureacracy that allows me to sell my goods across borders. Because after all the main goal is access, once you have that it is easy to circumvent the system.
Boss Major:
Actually, my examples for middle-class growth is not America. I”m really looking at China and India & if you read my comments more carefully, you would have seen that.
Annon:
I don’t know who you are, but your approach to this whole discussion is quite immature. Look at how Sijui and Mwalimu are arguing their points and follow that line. This is not personal. It’s just a discussion and hopefully your learning something from all the viewpoints. It’s not about your or me or anyone else.
Mwalimu:
This is an interesting example you are using about the Bata shoe company. Are you saying you can create demand where none exists? Or did this guy see an untapped market? i.e. he didn’t create demand. It already existed with people not having any shoes.
Sijui:
What you have said is quite interesting to me because you are not manufacturing the products. You are buying them from the west (the U.S. & Canada), are using a software developer in Australia….so, one could argue that you are simply reselling an already made product. So, where is the innovation here? e.g. are you guys and the Australian developer working on the coding and design of the software together?
And now, to the anger of everyone here who is accusing me of sounding like a broken record, you have forced me to return to my original point. i.e. Africans don’t make anything. We simply resell products that are made and produced elsewhere.
KE
Its not personal. Its just that I could not understand how you could not see the benefits of integration. They are obvious unless you want to engage in semantics debate.
I may not be as eloquent as Sijui and Mwalimu but that does not take away from my original assertion – which incidentally set off this candid discussion – that integration of the African market is the way forward for both small and big business.
As for Africans “making anything”, I still hold the view that beneficial as it may be for Africans to “make something”, that will not ncessarily be the panacea to their problems. I gave the example of some countries that arguably do not “produce” anything, but they are arguably doing ok. I maintain that view.
Boss Major:
You want to turn this discussion into something more entrepreneurial? Then essentially, you have to figure out what you are going to sell and if there’s a demand for it (wherever you decide to sell it).
Annon:
What countries don’t produce? France is the fashion center of the world…they make & export designer clothes, wines, chocolates, they make cars (Renault)…they do produce. Germany is not the only producer in Europe.
KE
Wow. Thank you captain obvious. I was just asking if there any entreprenuers who are commenting here. Think your reply was different than the question posed. No biggy. Just realized we do more bickering than show the more entrepreneurial side of things.. But let’s not get into that.
shots definitely fired @ Sijuis livelyhoodabsolutely nothing wrong with reselling. It comprises of roughly 60% of my business revenues. There tons of people making a comfortable living. Not eveyone can be a producer, someone has to make coca cola, someone has to sell it.. Etc etc. It’s the nature of business, I create a shoe, fastest way to millions is through having resellers.
Boss Major:
No shots were fired at anyone. I just thought it proved my point yet again, but yes, some people have to sell and if your good at it, why not?
N gosh, it’s Boss MAYOR.. MAYOR.. as in, highest ranking officer in municipal govt..not major.. ughh
Boss Mayor/Major…
Anyway, what are you going to sell? or make? or produce? And where are you going to sell it?
I’m in the IT services sector.
In order to make my ventures more sustainable in the long run, I’m looking to invest into quality developers to create a piece of software for me. We can say, sort of reverse engineering of programs currently used in my field, but with more focus on the requirements for companies in Kenya/E.Africa.
Look at it this way, if someone only wants to draw a picture of a square filled with black paint in it, don’t give them the Adobe Creative Suite,
lead that customer to my officejust point them to Microsoft Paint.A contributing factor to why IT progression is not as fast as you’d like it in Kenya is because software, leave alone hardware is exorbitantly priced. So it’s constantly out of reach to a decent size of the market. Now, if I could help bridge that gap, kudos to more efficient business processes.
There is nothing genius about it, it’s just an obvious gap that needs to be filled.
Now, it’s just up to me to do my homework.
KE, sorry but our objective was and always has been making money in Africa, all other things secondary.
I humbly submit that we will probably never join the big leagues of innovators in Africa or anywhere else for that matter.
I wish all you innovators out there GOD SPEED! In the meanwhile we are quite content laughing all the way to the bank and joining the swelling ranks of entrepreneurs in Africa.
Sijui:
Good for you if you are laughing all the way to the bank. At the end of the day, that’s what matters.
But let me ask you some additional question.
1) How did you know that what you were selling would work? what kind of research did you do prior to launching?
2) What is to stop a customer of yours from finding out where your U.S. or Canadian manufacturer’s are based and choosing to either:
a) Buy from them directly (or)
b) Copy you and start selling the same products as well.
Boss Major:
I thought software was becoming cheaper and cheaper today? There’s so much free stuff and with the growth of the internet, it’s become easier to locate this free software, no?
No.
1) wing and a prayer. Really. We did a preliminary market analysis when we were preparing our business plan but frankly we went on gut and instinct.
2) Nothing. Especially since none of our manufacturers give us exclusivity rights. It is a free world with one caveat, both manufacturers deal in bulk so unless it is a very large client with hundreds and hundreds of vehicles requiring fleet management they won’t bother.
3)Competition is good and the more the merrier. If you haven’t checked there are a gazillion companies in Africa doing the exact same thing we do. It is good ol’ fashioned capitalism you survive based on the superiority of your product and customer service.
Sijui:
I hope you now see my point about Africa not making anything; I mean, we don’t even put things together on an assembly line!
But let me ask you a couple of more questions:
If they’re a gazillion companies in Africa doing what you do (& assuming that none of them are making the product themselves) – i.e. they are buying it wholesale from outside manufacturer’s, how is your product different from there’s? i.e if you are all importing the product what is the marked difference between them?
I’m surprised your not importing the product from China. Would that have been cheaper for you or would it not have made a difference or where there no Chinese producers?
Also, on the Australian software engineer. Were you not able to find a qualified Ghanian or African? not that you have to hire an African, but I did become very interested in exploring this issue when you essentially told us that your entire product is manufactured in the west (even the software for it).
Products in our line of work differ by quality and technology.
A customer’s options are either satellite based systems, wireless or what they call GPRS and/or a hybrid of both.
Since we don’t manufacture any of the hardware ourselves, we look for hardware suppliers who have the most robust system at a competitive price. So yes, we looked at Chinese manufacturers, Israeli ones, Canadian ones, American ones and so on and so forth and went with the manufacturers who offered the most reliable and robust system i.e. multifunctional device that can do many things and can be used in a variety of industries.
To date, the Canadian and American suppliers are head and shoulders above all else because they have been using the technology for military purposes far longer than anyone else and hence have the best hardware further proven by rough wear and tear in Africa. If a Chinese manufacturer emerges that is up to snuff, then we will definitely reconsider. Also we are open to sourcing cheaper, no frills devices from the Chinese for those clients who want bare bones, no frills, dirt cheap service.
As for tech support in Africa, it is likely now that there are plenty of qualified professionals who could do the job however when we started we went with the support who had familiarity and experience with our manufacturers’ products and that happened to be in Australia. We developed a good relationship and have kept them on, if an opportunity presents itself definitely we would consider local support.
Sijui:
This is quite interesting information (and as I’ve said before – when people are making clean money, they will be able and willing to answer your questions in a way that makes sense).
But moving on…
Why do you think the Ghanians or other Africans are unable to source these products on their own? Is it just laziness, lack of knowledge that these products exist or what?
Also, does the manufacturer also sell directly to retailers or is it all wholesale?
Didn’t the guy just say, and I quote..
“If you haven’t checked there are a gazillion companies in Africa doing the exact same thing we do.”
You will certainly need to perfect the art of customer service if you want to take your firm to the next level. Being in a saturated field already.. it’ll be your best bet,
amongst other things.KE, I am not sure I understand your question. Do you mean why aren’t Africans manufacturing the devices ourselves? If yes, frankly we didn’t have the technology and to be honest as a staunch supporter of African enterprise, it would take me a long while before I switched to an African manufacturer just based on track record.
If your question was why don’t individual customers in Africa go directly to the source i.e. manufacturer rather than going through the middleman I think it is a factor of:
1) volume, only large customers can justify direct attention
2) economies of scale and outsourcing, same way a lot of companies who do not have in house tech support contract third party vendors to provide the same service
3) lack of knowldege. This technology has only been in the African marketplace for the past 3-5 years. It is only now that it is reaching saturation point.
Boss Major:
Thanks for pointing that out. I guess I wasn’t being clear. Outside of companies that are selling these products for profit, if you, an individual owner of a couple of trucks in Ghana want to be able to track what your employee’s are doing, why not just hit the internet, find the manufacturer in America? But Sijui answered my question: The manufacturer’s only sell in bulk, but they must be a retailer in America who sells them?
So, I guess the question is, what is cheaper? To buy from an American retailer and have your 2 items shipped to you in Ghana or to go to a company like Sijui’s & buy from her?
* What are the import taxes like in Ghana? because I think in Kenya they are very high & do import taxes have an impact on your business?
I think at some point African governments need to decide what they want to do because they can’t keep importing.
So, if they don’t have the money and know-how to set-up large manufacturer plants like those found in Asia, then the only other option I see (especially for an English speaking country like Kenya) is to go the service-oriented route. i.e. Allow private operators to set-up good telecommunications systems in the country and start outsourcing companies that will be willing to provide back-office work for a low price.
This made me die of laughter. You come to conclusions in very odd ways.
KE,
Look at it this way, there is an order to doing things in business. I’m not downplaying your queries, but the direction your questions are going.. Entrepreneurs will be doing everything in house. In business you don’t do everything because it is cheaper, you do it mostly because it makes sense. I could stock my wall unit with books on accounting and law so that I can weed out my CPA and Attorney exorbitant fees, but do you know how much time and money that would cost me? The marginal return on that idea will never pay off. It’s simply NOT MY BUSINESS.
Buying from Sijui especially as a small business makes the most sense. The convenience is priceless.
A reseller streamlines things for you. It is his business to be in contact with manufacturers. He needs them and they need him. You as a 3rd party customer, do not, and cannot justify having business relations with them. Your a small fry.
Boss Major:
Your example of a CPA or Attorney is not a good one. The CPA and Attorney you hire, will both be using THEIR OWN intellectual capital to provide you with the services you need. They are not re-sellers; They’d be using their brains, training and education to give you what you want.
This is not the same as buying an already manufactured product, which was created by somebody else’s brain power.
Also (& I’m not sure what part of the world you are based in) – but buying from a small business owner is not always the most convenient route. So many large companies and wholesalers have become very efficient (thanks to technology and thanks to their own innovations) — that in fact, cutting out the middle-man (or small business owner) is not only very possible, sometimes it is also cheaper.
Where are you based?
Boss major,
KE,
I know you like examples: Do you by a new toyota from the manufacturer or from a dealer ? aka reseller aka licensed agent…but the dealer must have mechs “intellectual capital” so not only can he service the products but REPRESENT the manufacturer eg with recalls. Same applies to cisco..to be areseller you need network engineers and techs with cisco certifications eg ccna, a+ etc..Same for emc , ibm etc etc . In summary Middlemen are very very important to manufacturers..makes life easier.
I’m based in New York City.
bow downIf I started answering all your questions,
i would need a heavy dosage of propofol,similar to the one administered to Michael JacksonI’d cry, so I’ll let Mwalimu finish you off.The premise is simple, your an entrepreneur, you need something done, you pick what makes the most sense. Now, nine times out of ten, if your a small business owner in Africa, justifying buying products from overseas isn’t high on your list. You’d rather deal with a distributor like Sijui, THEY HAVE STREAMLINED THINGS FOR YOU, HENCE WHY THEY ARE IN THAT LINE OF WORK. Now, if your looking to be a distributor, you’ll do business with the manufacturer, etc etc.
I think I’ll kick the bucket waiting before any of your comments take place. I’ll never buy coke right from the bottler so I can have it with my whiskey, I’ll never buy biscuits as a snack from House of Manji factory, I’ll never buy Harpic from the factory in Industrial Area. I’ll simply hop in my car and go to Uchumi, because guess what? THEY HAVE STREAMLINED things for me. But perhaps in the service sector this is taking place… in wait, the airline industry only? LOL!
Mwalimu & Boss:
I’m not sure what you are talking about, but again your example is off the mark because we’re not talking about buying Toyota’s here. Is Sijui selling Toyota’s in Ghana?
So, let me try and be very clear and read this slowly so that you can understand where I am coming from.
I have noticed (in the last 5 years in particular) that technology has gradually been cutting out middle-men and re-sellers, especially if you are a re-seller that deals with non-bulky items and why is this happening?
It is happening because with the internet, it has become very, very, convenient for someone to search for a product they need (online), pay for it (online) and have it shipped to them wherever they are (without ever having to leave their living rooms).
So, this idea that middle-men make things convenient for you, is no longer becoming applicable as more and more consumers discover that they can get what they need with the click of a mouse!
Actually, nowadays, you can even buy a Toyota on Ebay or Craigslist (why bother going through a dealer? especially if you are not interested in buying a brand new car?)
Therefore, given the above facts, re-selling will become less profitable for a lot of these middle-men because if the manufacturer has a website and if they decide to start selling their products directly to consumers, you can just go online and buy it yourself!
And guess what? A lot of manufacturers who previously would only have sold their items in bulk are discovering that having an online presence immediately gives them access to a worldwide audience and they are taking advantage of this.
This is why I was asking Boss Major where he was based because he doesn’t seem to be aware of what may be happening with technology and with cutting off of re-sellers and middle-men.
http://whiteafrican.com/2010/0.....ighlights/
Circle-ing back to the innovation discussion I wanted to make some few final comments and observations. One of the reasons why I moved back home was that I felt a ‘stirring in the land’ meaning an awakening amongst a small group of hardy, idealistic, optimists experimenting on entrepreneurial and innovative ideas. I frequently check on sites like Timbuktu Chronicles to see a whos who of new entrepreneurial ventures in Africa. Why I was drawn to this stirring is the fact that most of these entrepreneurs were doing stuff very much below the radar at a grassroots and small scale level. In other words keeping their heads down and focusing on their sh%*&%$#.
What is perhaps frustrating for me is the fact that almost all of this is happening without government support and incentives. Perhaps we should be glad that at least many more national economies are functioning now and on a growth spurt plus more governments are less tyrannical so at least you get room to breath, and nothing much more beyond that. I am also aware that this entrepreneurial corps is nowhere near critical mass which is a requirement if we are to truly transform our economies, it is still a preserve of middle class and upper middle class well educated ‘elites’-a minority in Africa obviously.
Still it is great to see folks ‘doing things’ and achieving modest to great success, and I am hoping that this turns in to a tidal wave at some point.
P.S. KE, I want to revisit a question you posed on Ushahidi, I would love to hear feedback from Hash to be certain but somehow I doubt he is the ‘NGO-type’ so their big picture is probably a profit making enterprise.
Import taxes are not really a factor since one of the few things governments get right is providing exemptions for certain classes of ICT products i.e. software and hardware. We pay some taxes but they are manageabl enough that we can pass them on to our customers without making the price exorbitant.
And your point about direct sale is noted. Right now fleet management systems are not sold over the counter, yes you can buy a singular GPS tracking device for one car from Radio Shack, Best Buy or another retailer, but whole fleet systems are not sold off the rack. PERHAPS AT SOME POINT THEY WILL, AND LIKE EVERY BUSINESS WE WILL NEED TO ADAPT TO THAT REALITY.
Sijui:
What question did I pose on Ushaidi? I think I was communicating with Hash via Twitter. Not sure if the questions then showed up on the Ushaidi site.
Those guys at Ushaidi are trying to save the world. Not sure if they’re into or even interested in any profit making ventures. Although I saw on Twitter that Ushaidi got a $1.4 million dollar grant from Pierre Omiydar’s foundation (Omidiyar is the founder of Ebay).
I’m glad you got my point, which Boss Major and Mwalimu had failed to get & proceeded to try and taunt me when in fact, had they paid attention, they would have gotten my point
**But anyway, how do you adjust when you don’t make the product? Do you start selling other products? How do you do it?
Sijui,
You are not cutting any middlemen, you are the middlelady , so don’t tell us that its not over the counter.
KE
Even when you buy online , it does not mean its not a reseller. I can own a web site and call it toyota.co.ke and if you buy from me,I will sent to you everything toyota..including a coofee mug from toyota.
KE,
There a current posting on Kumekucha with a certain Mwarang’ethe’s comments which I believe are very interesting. They do touch on a lot of what’s going on here.
Take a look and see.
Mwalimu:
My basic point (which I thought I made in the comment above) is that quite a few manufacturers are beginning to use both i.e. use re-sellers and retailers, but also establish a web presence where they too can sell directly.
I don’t know why your not getting my point, which is that: With the advent of technology, finding goods, services or anything else has become a lot easier. It’s not longer rocket science. A simple google search for a product you are looking for can lead you directly to the maker,wherever they are based in the world.
I also think that in some ways, many people who’ve only lived or worked in Africa may be underestimating just how efficient global business has become.
Let me give you a simple example:
I remember a glass container in my fridge cracked and I had to get a new one, but I had no idea where to find it or even, what it was called.
So, I hit google and started punching in a bunch of descriptions and after a few minutes, the manufacturer’s website showed up in the search results.
So, I found what I needed (online) but I still wasn’t sure if it was the exact glass panel I needed. Then, I looked around the site and they had a chat section that allowed you to ask a customer service rep about the product. So, I got on that, chatted with a customer service rep and was able to determine (within minutes) exactly what product I needed.
Then, I whipped out my credit card, paid for it online and in exactly 2 days, I had my glass panel.
The efficiency was astounding and the entire process took all of 15 minutes.
I’m sorry to burst your bubble, but I could have done the exact same thing, right here in NYC, ten years ago. That is not a new discovery.
Your posts tell me all I need to know on your exposure to the world of business. You definitely do not comprehend some of the concepts you are challenging people on. I shall leave that at that.
If you want to touch on our friends in Africa, trust me, they do not underestimate the value of internet and new technology. They just have not fully gotten off the ground and started making an impact but they shall get there..
someday soon hopefullyBut I see your point, the internet is making life simpler for businesses.
Just been following all your views here and you all seem to make some interesting points. One way manufacturers distribute their products is by authorized dealers (car dealerships etc). They also do it through independent distributors. Somebody mentioned about technology getting rid of the middleman (KE).
In the advent of technology however, as you also mentioned, manufacturers are finding it easy to link up with the consumer instead of using the middleman. That also has opened a chance for individuals with the same product, be it new or refurbished for example to also connect with customers (think of ebay). Probably there was some guy selling the same part you needed for your fridge KE, on ebay. Where do you classify these people? Retailers? Resellers? Middlemen? I think it’s a grey area and you can’t completely get rid of them.
So, going back to the original topic of this thread, consumers in Kenya need more “choice” as to where to get what they need thus driving the prices down; isn’t “real” capitalism about competition. And the job landscape is now changing; companies are now seeking flexibility. Outsourcing, if you ask me might slowly start dying away. Check out this article: http://www.businessweek.com/ma.....935448.htm I feel the era of the temporary worker is where we’re headed now.
Thank you P for a well thought out response.
its a relief.