A first-generation Nigerian bank has a white horse as its logo. The problem was that the horse was tilting backwards and stationary. Corporate branding efforts sought to change this. The lethargic horse was transformed to an energetic one, reaching forward, on the move: the logo became more entrepreneurial. This new brand identity won an international award for ‘best brand development to reflect changed mission/vision/positioning’.
This contrast between the dull/lethargic/backward-looking and the vibrant/energetic/forwarding-looking symbols is the common characterization when contrasting the state sector (government) and the private sector (business). Most analysts believe that the best government is that government that creates the enabling environment then steps aside for the private sector to do the innovation and transact business.
Researchers at the Nigerian Institute of Pharmaceutical Research and Development (NIPRID) deserved the Nobel Prize for Medicine. A drug for the treatment of sickle cell disease made from traditional herbal ingredients was discovered at the institute decades ago. However, a lack of entrepreneurial spirit stalled the production, commercialization and marketing of Niprisan, the anti-sickle drug. It is estimated that about 12 million people worldwide are affected by sickle cell anaemia. The potential market for the drug is worth more $1 billion, with virtually no competition, as the only other drug available (Hydroxyurea) had serious side effects. The patent for Niprisan was filed in the United States of America in 1998 and expired in 2017.
Entrepreneurial spirit has actually entered some state-owned enterprises in the past and present. During its time, the Midwest Line (later Bendel Line) was probably the best-run transportation company in Nigeria. Bendel Line was run professionally for decades, had well-maintained Peugeot vehicles and their stations were designed like train stations in Europe. The National Engineering and Technical Company Limited (NETCO) is a state-owned company, a subsidiary of the Nigerian National Petroleum Corporation (NNPC). NETCO declared a profit of N6.75 billion for the year ended 31st December 2018.The simple characterization of the state as sluggish/backward and the private sector as vibrant/innovative is not always true. The Nigerian state can become more entrepreneurial in the 21st century.
The world celebrated 20th July 2019, marking fifty years since humans landed on the moon via the Apollo 11 lunar module, on 20th July 1969. The Apollo program was birthed out of an ideological battle between the U.S. and U.S.S.R. for supremacy during the cold war. The mission to the moon produced many novel scientific breakthrough and new directions for science and technology, spill overs that created a rich scientific legacy. The lunar landing project was almost a decade in the making, since President Kennedy proposed that the U.S. government, the state, should “commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.” The term ‘moonshots’ now describes lofty targets, missions, goals.
Mariana Mazzucato is the author of the book ‘The Entrepreneurial State’. Mazzucato believes that mission-oriented thinking (moonshots) is vital for the government of any country. Missions from the state can stimulate innovation, entrepreneurs, and make available opportunities for private sector profit making. The state can take risks on very large missions and projects that the private sector may hesitate about. Far from being a slow bureaucratic machine that should make way for the private sector, the state can become risk-taker-in-chief. Only the state can provide the long, patient, financing needed for certain kinds of projects or innovations.
Mazzucato showed that the beloved iPhone, commonly thought as being the work only of private sector entrepreneurs, actually has that state behind a lot of its success. The U.S armed forces invented the internet and pioneered GPS Positioning (without which the iPhone would be ordinary). Government funding in the U.S. enabled universities to create touchscreen technology and the HTML computer language. Funding from the U.S. government was made available to create Silicon Valley during its formative years. Even Google is not exempt. At the centre of Google’s success is its search engine, made of an algorithm that was developed through a government grant. It is instructive that the U.S. known as the home of entrepreneurs, had massive government investment that enabled vital innovation. The U.S. government is an entrepreneurial state.
Traditionally, the role of the state (as taught in economics textbooks) is to fix market failures such as monopolies, negative externalities and provide public goods that the private sector cannot provide at a profit. But, in the 21st century, the state can be more that a ‘market fixer’ the state must also be a ‘market shaper’.
Uyiosa Omoregie
Uyiosa Omoregie is certified management consultant and fellow of the Institute of Management Consultants
He can be contacted at [email protected]
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