The role of micro, small and medium scale enterprises (MSMEs) as a pillar of growth in a global enterprise framework is indisputable due to their enormous potentials in absorbing a large chunk of the active and willing labour force (skilled and unskilled). However, the technological processes that can lead to increased productivity and, subsequently, the competitiveness of the MSMEs remains dimly discerned for policy recommendations towards upgrading traditional technologies for MSMEs.
The appraisal of the developments surrounding the traditional process technologies to suggest a possible framework to modernise and upgrade Nigeria’s traditional process technologies (TPTs) in a bid to improve the competitiveness of micro, small and medium enterprises (MSMEs) is essential towards the realisation of growth and development objectives.
Over the years, micro, small, and medium scale enterprises (MSMEs) have dominated many countries’ growth and development agendas, developing countries in particular. In Nigeria for instance, MSMEs are essential due to certain prevalent features – the low levels of income, weak credit security, high numbers of unskilled labour, institutional bottlenecks, rising problems of unemployment, problems of banditry and terrorism, the asymmetric and unfavourable exchange rate for import-dependent nations, and inadequate technological know-how among others.
Despite the established relevance of MSMEs in the modern development agenda, the challenges and prospects of traditional process technologies, which are the most crucial growth component of the MSMEs competitiveness, remain largely unclear in the face of policy formulation.
There seems to be no comprehensive discourse on how the prospects, challenges and opportunities around the traditional process technologies induce growth and subsequently competitiveness among medium and small scale enterprises. Discussions on the issues of upgrading and modernising traditional process technologies have been dominated by a lack of comprehensiveness and inconclusiveness.
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To achieve Agenda 2063 (The Africa we want), re-engineering growth processes and industrialisation remains the most potent option in the light of structural rigidity that has impeded African countries for some time now. Despite theories and empirical evidence across borders establishing a positive link between micro, small and medium-scale enterprises (MSMEs) and their growth potentials in developing nations, the challenges and prospects in the processes and local technologies which could lead to a competitive MSMEs growth, have not been documented in the most practicable manner.
More businesses with modern or upgraded local technologies (traditional process technologies) will help African countries amass wealth and solve incessant glitches connected with the school-to-work transition that has been the hallmark of Africa’s educational system.
Modern or upgraded traditional process technology offers benefits, such as viable paths for skills and technology advancement, growth in prosperity and income, youth emancipation, and revenue broadening. According to the World Bank (2014), scaling-up traditional process technologies was the most relevant for growth and development objectives.
The ability of a well-equipped and functional traditional process technology-based MSMEs to absorb unskilled and semi-skilled workforce is second to none in terms of welfare enhancement and the actualisation of broad growth objectives.
Technology-based MSMEs in Nigeria will be famous not for the commodities-based economic approach alone but also for their potentials for higher value-addition and their ability to protect the economy from shocks in the global commodity markets. African countries, especially Nigeria, need to begin intensifying efforts to leverage their comparative advantages through specific industrial development programmes, with its exponential population growth and largely inactive labour force.
This would enable the country to break the established global manufacturing value chains in many commodities, such as textiles, metal processing, leather and agro-processing primarily. Even the industrialised nations (the G7-Canada, Germany, France, Italy, Japan, UK, and the US) operating service-based economies are recently looking for an inventive approach to innovate their local technologies to curtail deteriorating growth and employment prospects which was previously not the case.
In clear terms, the importance of traditional process yet technology-based MSMEs output growth can never be overstated, when it comes to the context of development in Nigeria and thus needs to be given utmost consideration in development debates.
Notable experiences and lessons from the Asian Tigers (Hong Kong, Taiwan, South Korea, and Singapore) whose growth and development trajectories have challenged decades of development paradigms, suggest that breaking away from the vicious circle of – unsatisfactory technology progress, low-level industrialisation, and inadequate manufacturing output – requires an upgrade and/or modernisation of identified and prioritised traditional process technologies, across the selected value chain of key sectors of an economy.
With over 37 million MSMEs and a resource-rich economy that has failed in delivering an egalitarian society devoid of hardship and poverty for her teeming population, it becomes imperative for government and relevant government agencies to analyse the bi-components of the traditional process technologies, to identify the rust and wear in the processes leading to MSMEs improved productivity and competitiveness, while advancing policy recommendations that are welfare-enhancing.
