• Thursday, June 13, 2024
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BusinessDay

Light manufacturing in Nigeria

Watch-Designer

US watchmaking history offers lessons for Nigeria’s go-slow industrial development

Labour and an abundance of raw materials are advantages Nigeria has failed to exploit to develop its potential as a hub for light manufacturing. Making shoes and clothes require modest skills. Within two weeks inexperienced workers can learn to operate sewing machines.

Cheap “dollar” watches, first manufactured in the 1890s by the Waterbury Watch Company in the US, are a vital part of America’s “peculiar” innovation. It is the story of interchangeable parts, standardisation and division of labour. An ecosystem of apprentice mechanics and machinists and tinkers that became inventors, venture capitalists, patents and benign insolvency laws caused a manufacturing contagion: a mass production factory system that spread to the manufacture of shoes, clothes and watches which though inelegant were cheap, practical and useful.

In “The Watch Factories of America, Past and Present: A Complete History of Watchmaking in America from 1809 to 1888 Inclusive” we find protagonists of watchmaking such as Aaron Dennison. He foresaw the mass manufacture of wristwatches using interchangeable parts.

In 1846, furnished by his frequent visits to Eli Whitney’s armoury in Springfield, Dennison concluded that mass production of watches was possible. In 1789, Whitney, an inventor, used interchangeable parts to make 10,000 muskets for a federal government contract.

Whitney replaced skilled labour with stamping and cutting machines, substituting machinery, used for manufacturing standardised interchangeable parts, with the custom work of skilled labour. With unskilled workers the parts were assembled into guns. It was this peculiar American innovation that Dennison applied to watchmaking.

In 1849 Dennison and Edward Howard, a friend and veteran watch and clockmaker, convinced it was a profitable undertaking sought Samuel Curtis, a capitalist, who invested $20,000 in the venture.

Dennison spent the initial capital on a tour of England, to observe the watchmaking process and secure supply of materials. Dennison returned certain that the interchangeable system was most convenient for production of watches in the US.

The watchmaking system in England which involved outsourcing “dial-making, jewelling, gilding, motioning, etc, to others, down almost the entire length of the alphabet” came with risks: quality, timely delivery etc. Besides, the US, at the time, was short on skilled labour. In the mass manufacture of watches, unskilled labourers assembling parts made from machines raised productivity.

Though Dennison’s first venture failed, because the investors were not “bountifully supplied with money”, he founded the Waltham Watch Company, which in its prime churned millions of wristwatches.

Cities in the environs of Massachusetts, overtime, became a cluster for watchmakers. There Dennison and others with money from several capitalists invented automated machines, tweaked and tinkered and designed, reduced the number of parts for a watch and perfected the production process that resulted in cheap watches like the $1 Waterbury watch.

Rising productivity in the watchmaking industry had to contend with higher wages and high interest rates which made borrowing money to buy new machinery expensive. However, because technological improvements increased productivity and the return on capital, new investments increased. The US economy was characterised by technology efficiency, high wages, high interest rates and rapid growth.

Can Nigeria, with its abundant human and natural resources, replicate this? Can we profitably employ the millions of youth who are neither in school nor active in the labour market in light manufacturing? Can well managed companies turn leather from the north, cash crops from the west, east and south, into a shoe and agribusiness industry?

Good economics dictates that scarce resources are applied sparingly and abundant resources generously; but infrequent electricity supply and low human capital development are serious constraints.