A couple of weeks ago, President Bola Ahmed Tinubu was in China for talks with his Chinese counterpart, President Xi Jinping, ahead of the 2024 Summit of the Forum on China-Africa Cooperation (FOCAC), which was held in Beijing, China. President Xi announced at the end of the meeting that his government would encourage more Chinese conglomerates to invest in Nigeria. That is cheery news because the country needs massive investments to turn around its ailing economy and give Nigerians a better deal.
China’s footprint in Nigeria
China has typically considered Africa, particularly Nigeria, strategic to its growth agenda as a source of raw materials and a ready market for its industrial products. Today, Chinese businesses in Nigeria are big players in the manufacturing, telecommunication, financial services, transportation, energy, and infrastructure sectors. Chinese companies such as ZKTeco, a digital security firm; Huawei, an ICT giant; Guangzhou Automobile Group Company (GAC); Western Metal Products Company Limited (WEMPCO), a steel mill; and Golden Gate, in the food industry, and many others have invested billions of dollars in the Nigerian economy.
These investments and investments from other sources have helped the country in terms of job creation, government’s revenue drive, and transfer of knowledge and skills. However, impact has been limited hence, Nigeria’s need to rejig its foreign direct investment or capital importation policies in line with the digital age to ensure it derives optimum benefits from such investments.
Eyeing a slice of the global digital market
The reality is that the world is going green and digital and economies are jostling to position for a reasonable share of these markets. Countries with green or digital products to sell will no doubt gain a better footing in the global market. Nigeria has the major ingredients needed to be a big player in the global digital economy. It has a youthful tech-savvy entrepreneurial population and has already stolen the lead in Africa in tech development. For instance, Lagos was the only city in Africa in the Global Top 100 Startup Ecosystems in 2023, and one of three African countries ranked for 2024. And, in funding terms, Nigeria is ahead of Nairobi and Cape Town in the 2024 ranking.
Building a strong R&D for competitiveness
However, the country would need to strengthen its research and development (R&D) capabilities to unlock the full potential of its talent pool and compete favourably with other economies in the highly lucrative tech market. Policymakers must devise a way to ensure that a portion of the investment dollars coming into the economy is spent on R&D. The government needs to encourage the big Chinese companies and other investors expected to invest in the economy to consider allocating some of their investments to R&D.
R&D, academia and growth of tech ecosystem
An R&D sector, driven by academic institutions, is critical to the growth of the tech ecosystem in terms of increasing the stock of knowledge and engendering new product development. Speaking on this nexus between tech and academia, the Minister for Communications, Innovation, and Digital Economy, Dr Bosun Tijani, said, “Academic institutions are part of a larger technology ecosystem that is missing. For the African continent, not just Nigeria, there’s not that kind of funding for ecosystems.” Top global performers in the digital market like the US, South Korea, China, India, Sweden, the UK, and many others rely heavily on a robust R&D sector.
Benefits of R&D
Some of the benefits of R&D include industry and academic institutions’ collaboration, which would help companies gain access to academic expertise while the universities receive much needed funding to tackle real-world challenges. Such partnerships can help bridge the gap between academic research and practical application in the tech industry and the real world. Across the globe, universities regularly collaborate with tech companies on joint R&D projects. Quantum computing, AI models, and cloud-based technologies were outcomes of such collaborations between tech giants like Microsoft, Google and universities like Harvard, MIT, and Yale.
In fact, universities abroad have a unit called technology transfer offices (TTOs) that assist in converting academic research into marketable products through licensing of developed technologies to private companies. Such collaboration will be particularly useful to Nigerian universities that often struggle for funding for research work. In 2019, for instance, ZKTeco showed a strong interest in developing an R&D centre in a top university in Nigeria and scale that over a period of time. The plan is still in the pipeline.
Research and development helps to build and enhance local expertise by encouraging the training and growth of tech professionals and scientists. The country already has the latent talent pool to draw from to drive technological advancement and innovation. The local experts created through R&D will generate new ideas that will help drive the development of innovative products relevant to the economy. R&D can also lead to adaptation of global innovation to address local needs thus making the innovation accessible and affordable.
The entrepreneurial spirit of Nigerians is well known. A report by Africa: The Big Deal, a research firm, showed that from 2019 to 2023, Nigerian startups received 29% or $4.4 billion of the $15 billion invested on the continent. A robust R&D sector will further stimulate entrepreneurship in the country thereby helping to develop a new wave of Piggyvests, Flutterwaves, Wakanows, and Iroko TVs that will enable Nigeria to strengthen its tech ecosystem and compete globally.
India, China, South Korea, the US, and others are today net exporters of technology products and services globally due to strong R&D sectors. Nigeria’s quest to diversify its economy and build a strong industrial base that will wean the country from import dependence can be achieved through a functional R&D space.
Impact of R&D in other climes
Examples abound across the globe and in different industries of how R&D has engendered technology breakthroughs. Holland’s R&D sector has helped transform traditional farming. Vertical farming and precision agriculture birthed solutions such as minimal land and water use to generate high crop yields in that country.
Massive investments in R&D by Huawei, Qualcomm, and Samsung largely led to the development of 5G technology, with its hosts of high functionality and benefits. 5G has in turn led to the development of smart cities. MacBook, iPhone, and iPad were all a result of Apple’s investment in R&D. So are Tesla’s innovations in autonomous driving and electric vehicles, and OpenAI’s creation of ChatGPT and DeepMind’s AlphaGo. MIT Media Lab contributed to the development of robotics, while Dropbox (MIT) and Facebook (Harvard) were created by university students/researchers.
Margaret Thatcher is forever hailed as creating the foundation for Britain’s tech industry to blossom. Her government understood the symbiotic relationship between entrepreneurship and academia and introduced policies to strengthen the relationship.
Nigeria needs investment in R&D
The Nigerian government needs to adopt a similar strategy by introducing a comprehensive set of policies that will help build the country’s R&D sector. President Tinubu saw firsthand how R&D can help enhance knowledge and birth new ideas when he toured the Huawei Research lab when he visited China. It is encouraging that he was able to secure a “commitment from Huawei to establish a joint solar PV test lab in Nigeria. That is a good step forward. However, this government must quickly work to remove some of the barriers to R&D in the country such as bureaucracy, insufficient reward or recognition for researchers, poor funding, and inadequate or nonexistent laboratories, among others.
R&D to boost drive for $1 trillion economy
The Tinubu administration has expressed a desire to build a $1 trillion economy. That is achievable if the country can develop digital solutions that will address real-world challenges. However, a strong R&D sector is critical to such development in terms of helping to create new ideas and innovative products, enhancement of knowledge, job creation, attraction of investments, less dependence on imports, development of local industries, and talent export.
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