The development of the spirit of entrepreneurship and the right policy climate are the two critical factors underlying President Goodluck Jonathan’s pursuit of industrialisation and economic transformation for Nigeria. The same factors are the backbone of the rising of Israel to a global model in economic development. Israel now has the largest number of foreign company listings on the NASDAQ. The nation of just about 7.1 million people has the second highest concentration of high tech companies in the world, after Silicon Valley.
Israel is renowned as start-up nation in reference to its exceptional ability to nurse and nurture new enterprises. A nation that can now be referred to as the Silicon Valley of the Middle East, was 30 years ago in about the same state with modern-day Zimbabwe. Israel now boosts of stable economic growth significantly shielded from the last global financial crisis.
The state of Israel has produced more start-up companies than peaceful and stable nations like Japan, China, India, Korea, Canada, and the United Kingdom. According to The Economist, Israel now has more high-tech start-ups and a larger venture capital industry per capita than any other country in the world. According to the World Economic Forum’s 2010-2011 Global Competitiveness Report, Israel leads the world in numerous innovation metrics, ahead of the United States – the world’s leading economy.
The Jewish state that has no shortage of problems has, in the span of just a few decades, transformed itself from a semi-socialist backwater into a high-tech superpower, according to The Economist. Per capita, it gives birth to more technology startups and it has become the destination for more venture capital than any other country in the world.
In December 2012, Israel shared with 141 member countries of the United Nations its expertise on encouraging entrepreneurship as a model for poverty eradication, job creation and creativity in marketing and technology.
Between the mid 1970s and early 1980s, Israel faced a far more potentially devastating economic stagnation than what we have yet seen in Nigeria. By 1984, Israel recorded an average inflation rate of 450%, reaching a high of around 950%. Huge military spending was the problem, which built up huge fiscal deficits – financed by printing money. A banking crisis happened on top of the inflation problem and enormous capital flight rubbished the country’s external sector that was already in a severe pain of external debt overhang.
The good news for Israel today came out of the economic crisis that kicked off reforms that laid the groundwork for Israel’s present-day prosperity. A government economic summit in 1985 designed a plan that slashed government spending, devalued the currency, settled for an independent central bank and ended the arrangement in which wages rose with prices. These changes laid the foundation of the modern Israeli economy, shifting from the workers’ state towards mainline modern capitalism.
The doors were opened to investors- the missing ingredient in the nation’s development index with the Yozma program – a $100 million state-owned venture capital fund that opened for business in 1993. Israel is presently the world leader in venture financing. In 2010, the country attracted $170 of venture capital per person, more than twice America’s $75 per person.
Despite huge resources, Nigeria has continued to face problems of unemployment, poverty and insecurity because it is not a producing nation. The experience of Israel is telling us that prosperity and poverty of nations are a function of the state of entrepreneurship development, not the quantum of natural resources they have.
We welcome our President’s big dreams in respect of industrial revolution and economic transformation. These are not different from the ideas that have transformed societies elsewhere. Israel’s 1985 summit that worked a turning point for the nation was a one-day event.
We have just concluded a three-day world economic summit from which Nigeria and the rest of Africa are expected to work out their economic transformations. A major step in this direction is for Nigerians and Africans to decide to begin to invest in their own countries rather than continue to expect that foreign investors will be the people to develop our economies for us.
For the dream of a better Nigeria to come true, somebody must have dreamt it ahead of time. Can we therefore keep behind all of our differences and dream with the President the big dreams for our nation so that we may also share in the glory of their realisation.
Nigeria has been able to maintain rapid economic growth despite that the manufacturing sector contributes only 4% to GDP. The immense growth potentials of the economy can be better appreciated if government’s plan to raise the contribution of the manufacturing sector to GDP to 10% by 2017 is realised. A determined effort to realise this target could perhaps be the beginning of Nigeria’s own economic miracle.
