Africa has a history of supply of poor products by uncompetitive local companies. It has also been said that the secondary industry is a barren land. Despite being poor, Africa had an expensive labor force. Chinese companies with remarkable expansion do not hire locals in Africa. The reason for this was that labor was not available for the high wages. African countries are relatively expensive compared to their national income levels. Prices are high due to high food procurement and logistics costs. In conjunction with this, the composition was such that labor wages would increase. At first, I was surprised to hear that UNIQLO, an excellent Japanese company, is expanding into this barren land of the manufacturing industry.
If you look closely, you can see that Swedish apparel maker H & M and a Chinese company's garment factory have set up operations in Ethiopia, Africa. This Ethiopia was close to Europe and the United States, and had the advantage of being tax-free, especially for clothing destined for the United States. UNIQLO plans to gradually increase production while establishing a system to secure a labor force capable of mass-producing high-quality clothing. Eventually, it seems that they want to make it an export base to Europe and the United States. The world's clothing is still supported by the strong consumer motivation of the United States and Europe. It seems that there are some conditions for Ethiopia to become an export base in Europe and the United States. When this condition is met, the area may become a factory in the world.
The SDGs (Sustainable Development Goals) that are currently attracting attention have 17 goals and 169 targets. For example, the first four of 17 are 1. Let's get rid of poverty, 2. Zero hunger, 3. Health and welfare for all 4. The goal is to provide high quality education to everyone. These are issues African countries have in common. Therefore, I considered a mechanism to solve these problems that African countries including Ethiopia have. The hint is Ford, an American car company. Henry Ford doubled his employee's salary to sell a car called the T-type Ford. When Ford raised his salary, other companies were forced to raise their salary. Income levels across the United States have risen sharply due to Ford's salary increases. When the United States reached a certain wage level, it became a country where cars, refrigerators and televisions could be sold. If you choose a country with a high salary, your country's consumption will increase and you will be able to mass-produce consumer goods. Then, the price of the product becomes cheaper. In general, motorcycles become more popular when GDP per capita exceeds $ 1000. Mobile phones are already widespread in Africa. Growth will accelerate once information and transportation are in place. If these two can be cleared, the industrialization of Ethiopia may be realized. By the way, Ethiopia has a per capita GDP of $ 1000, which is about half the income of neighboring Kenya's $ 2,000.
Therefore, I thought about how to manage the manufacturing industry well in Ethiopia. There are cases where a poor country has enriched the country by attracting garment factories. Bangladesh now has a per capita GDP of $ 2000, which was around $ 100 in the 1970s. The country has grown to become the world's second largest exporter of clothing. By becoming the second largest exporter after China, it has increased the national income of 160 million people. There is a reason for such achievements in a short period of time. Because Bangladesh was able to be self-sufficient in my staple food, it was able to work in the textile industry even with low wages. Developed countries have also adopted a policy of relocating factories from China and Vietnam for the purpose of this cheap labor force. And this time it's Africa. UNIQLO will begin production in Ethiopia. This country has one of the lowest labor wages in Africa. It seems that there is an environment in which garment factories can be operated at lower labor wages than in developing countries in Asia.
Despite many disadvantages, expectations for Africa are rising. It is also called the largest frontier in the 21st century. Contrary to expectations, many African countries have failed to industrialize. Manufacturing, which has high job creation capacity, is stagnant, and unemployment remains high in many countries. Curiously, despite the large number of unemployed people, the stagnation in the manufacturing industry is due to a shortage of human resources. Most of Africa's local industries, including Ethiopia, are small poor businesses. Looking at the workplace, raw materials and semi-finished products are messy and mixed, and they are randomly piled up on the floor. Poor work attitudes such as feelings about time and handling of parts are reducing profits as a company. Insufficient basic academic ability, such as the inability of employees to perform simple calculations, is also an issue. There are still a small number of companies doing accounting, and there are also situations that are not seen in developed countries, such as the escape of sales.
Japan's strength in human development has experience and achievements in Asia. Japanese companies have contributed to the industrialization of Southeast Asia using a method called Kaizen. Based on tidying, tidying, cleaning, cleanliness and discipline, Kaizen does not require a large capital investment. At a factory, we conducted training centered on this Kaizen. This was done by the Japanese public and private sectors for small and medium-sized enterprises in Africa. A follow-up study three years later has reported good results. There are an increasing number of cases in which managers who participated in Kaizen training continued Kaizen and succeeded in producing new products and developing sales channels. The spread of Kaizen is driving the growth of local industries and the attraction of foreign companies. Now it is necessary to create jobs that unemployed people can work for.
Improving people's daily lives is a top priority as a foundation for the growth of the African economy. To secure local human resources, it is essential to have human resources who can work. Even if wages are low, foreign companies will not enter if the quality of human resources is low. Furthermore, it is essential to develop managers who will drive the growth of the local industry. Cost reduction through localization will increase the number of attracting companies and raise the level of the economy as a whole. Local companies can no longer compete with financially-powered China alone. While using Chinese companies, local companies will also create a mechanism to make profits. In a sense, Bangladesh is helpful. China also has overproduction facilities that cannot cover production and consumption only domestically. It is time for China to sustainably build win-win relationships with other countries. Chinese companies alone may break the balance of profits. In such a case, one option is to take root in your own industry while using Japanese companies and Western companies. If the industry can secure a certain level of productivity, it can afford to the funds. If the funds are used to improve irrigation facilities and irrigation facilities, the country can be enriched. After that, the agricultural population will be moved to the industrial field and the employment environment will be improved. To that end, it is necessary to make a qualitative shift in the labor force. The developed countries of the world will eventually run out of labor. The mechanism that enables human resources to cover it from Africa, including Ethiopia, will be a win-win for the world.
As an aside, Japan's GDP per capita in recent years has been $ 42,000. By the way, Switzerland is $ 80,000, Luxembourg is $ 105,000, and Ireland is $ 70,000. African South Africa costs $ 5,000, Ghana, Congo, Kenya, etc. costs $ 2,000, and Ethiopia costs about $ 1,000. To grow the economy, it is necessary to increase the labor force, accumulate capital, and advance technology. In order for developing countries to develop, cutting-edge know-how of developed countries such as environmental technology is indispensable. This continent is characterized by a large number of young people not only in terms of population size but also in population composition. Some young people are also growing up in digital technology. By 2050, 151 of the 195 countries in the world will be unable to sustain their population. Under such circumstances, the population of only the African Continent will increase. With a population of 2.5 billion and abundant resources, Africa is in a position to enjoy sustainable development. From now on, I would like to build a friendly relationship both physically and mentally with Africa, including Ethiopia.