Many determinants drive productivity and competitiveness. Understanding the factors behind this process has occupied the minds of economists for hundreds of years,engendering theories ranging from Adam Smith’s focus on specialization and division of labour to neo classical economists’ emphasis on investment in physical capital and infrastructure and more recently, to interests in other mechanisms such as education and training ,technological progress, macroeconomic stability, good governance, firm sophistication and market efficiency among others.
While all these factors play major roles in defining the success or otherwise in global economies, they are not mutually exclusive- two or more of them can be significant at the same time and this is hereby illustrated in the 12 pillars listed below:
While these Twelve Pillars are listed individually it must be re-emphasized that they are not independent: they tend to reinforce each other, and a weakness in one area often has a negative impact on others.For example, a strong innovation capacity ( pillar 12) will be difficult to achieve without a healthy,well educated and trained workforce (pillar 4 and 5) that is adept at absorbing new technologies (pillar 9) and without sufficient financing ( pillar 8) for R and D or an efficient goods market that makes it possible to take new innovations to market (pillar 6). While the pillars are aggregated into a single index, measures are reported for the 12 pillars separately because such details provide a sense of the specific areas in which a particular country needs to improve.
Our Financial Experts and those empowered to manage the Nigerian Economy need to rethink their strategies in line with global developments and new thinking.
Are we investing in the development of these 12 pillars?
Are we aware of the fundamental roles they play in the development of economies?
The answers are blowing in the wind.