Harnessing the Demographic Dividend to Fast-Track Industrialisation: A Case in the ICT sector

Abstract

Eswatini ranks very low in the Global Competitiveness Index (GCI). Conceivably, this draws from the fact that Eswatini is a consumer of goods and services produced from outside the economy. In this paper, we use data from the GCI, International Telecommunications Union (ITU), and Global Innovation Index (GII) to argue that Eswatini should focus its industrial policy towards the creation of tacit productive capacities amongst SMEs in the manufacturing sector to drive large-scale industrialisation. The paper shows that by doing this, Eswatini will position herself to be a leader in the manufacture of industrial goods in the region and in the long-term be able to attract foreign investors to the country. In particular, the study analyses panel data of 5 African countries to illustrate that manufacturing in the ICT sector could contribute to increased economic growth, particularly if targeted towards technologies that are in high demand among the youth- such as smartphones, laptops, and other similar gadgets. The paper juxtaposes its main treatise with Africa’s youth bulge and shows that with every 1% increase in the youth population there will be a 4.79% increase in the adoption and usage of ICTs by the youth. This suggests that there is an opportunity for the country to anchor its industrial policy on the production of those technologies that are in high demand amongst the youth. The key message in the paper is that building tacit knowledge and skills in the manufacturing of high technology products could reduce youth unemployment, attract foreign investments, and create opportunities for industrial development and industrialisation. The paper concludes with some considerations for industrial policy in Eswatini.