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More Value at Upstream Layer in Technology Pyramid

Technology is the chief of the enterprising international. And it leads the usage of a constitution. Unlike the conventional political shape, this charter is Algorithms written by means of engineers, scientists, etc and not congressmen and politicians.

The international opposition is basically who has the great technical institution to write down the fine one; in this case, Algorithms, that contain patents, technical methods, equipment, and so on. As a country develops, adopts, applies and diffuses appropriately the contents of this charter, it elevates the lives of its residents. The extra innovation a state pursues, the more it refines this charter.

Economists have proven a correlation between Knowledge Economy Index (KEI), productivity and popular of living. The mission for any country is to improve its KEI range. Doing that includes appropriate education, the monetary regime and other variables that assist to improve technology capability.

The age of herbal assets dominating global trade and enterprise is long gone. What topics now are developing information and applying it. Some countries will create, others will simply eat. But wealth is concentrated on the innovative level and countries that target ingesting, without growing era will no longer prosper.

Even with the abundance of herbal resources, which generally, the consuming international locations can not independently technique without the expertise partners will now not exchange this trajectory of constrained country wide wealth without generation creation.

On this basis, I separate the two layers wherein international locations use and compete with generation as upstream and downstream layers. It is sort of a layer pyramid in which the downstream is at the bottom with the upstream seated on the pinnacle. What occurs right here is that a few nations awareness on the downstream layer even as others integrate both the downstream and upstream layers.

The maximum superior nations integrate the two layers as they seek worldwide competitiveness. They provide era roadmap that appears on the destiny and feature plans to take blessings that technology brings. They create and broaden matters and within the twenty-first century are classed as information-driven economies. In those international locations, there is planning for continuity and generation succession.

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For the opposite countries, commonly growing, they compete at the technology pyramid basically on the downstream layer. They lack the realize how to create things and commercialize technology highbrow properties. The nations are not driven by using era, rather commodities. They are liable to trade shocks and are usually economically non-vibrant. They fail to create wealth using generation and take part inside the pyramid as customers or prosumers.

Let me illustrate the usage of Nigeria in which they talk the language of petroleum. In the petroleum enterprise, there are the downstream and upstream sectors. While the upstream specializes in the exploration of crude oil, downstream does the distribution and advertising.

The cash is in the upstream region, a major cause we have the foreign partners concentrated therein. That is where the know-how creation is completed and applied in the industry. I am cautious to mention, without the information companions in Nigeria, supporting to explore this crude oil, Nigeria cannot mine this product. Verdict: the oil could be there and of no tangible monetary use.

This will comply with a pattern in which villages have water underneath them but no drilling understanding to harness the water for cooking and consuming. That is the hassle of anchoring countrywide approach at the downstream stage. It lacks inventiveness.

In Africa and many developing international locations wherein ICT has been embraced, they rarely understand that there is an extra fee than what ICT gives them. Sure ICT has helped many developing countries to improve their enterprise tactics, tools, and people. They are so excited at the powers of quicker and quicker conversation. They enjoy the wonders of e-mail, the Internet and cellular telephone and lots of extras. These stories are usually on advertising and marketing, distributing and installation of those ICT structures. They rarely cause them to and might simplest play on the downstream layer.

Their economists point out repeatedly the innovations ICT has brought to the economies. I agree ICT is stressed for innovation in such a lot of areas. Nonetheless, the good information is that there are greater advantages up in the pyramid in case you move as much as the upstream layer. By now not developing era, our techno-monetary advantages are restricted and this may not change till we move up the pyramid.

Though this point can be illustrated with any generation, I will use the ICT because it’s miles common and familiar to people. I have already illustrated the factor in the petroleum enterprise in which many developing nations rely upon petroleum refining era of the evolved countries to extract the oil. Even if they broaden technology for the distribution, the upstream idea will triumph. Nations make extra money to license technologies at the upstream stage compared to the downstream.

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Back to ICT, the upstream degree will contain designing computing structures, cell phones, routers, device drivers, and all other infrastructures that permit ICT revolution. Instead of importing the today’s cell phones, we will suppose how to design them. In 80% of the growing nations in which cellular era is used, much less than 2% of the technologies are designed and manufactured there.

Yes, there are organizations that distribute and sell these devices and make marginal profits. They can import a pc from China at $500 and sell to their customers at $650. Because the barrier to entry is so susceptible, the margins are small. Everyone is promoting and there are stores everyone. They are technology firms to their international locations due to the fact they are able to load the software program and configure the networks and get the laptop working.

Compare that with giants like Intel and AMD that take a chunk of sand (silica) and manner it. At the quit, that piece of sand of say a $1 can be bought for $3,000 because of the know-how concerned to transform the sand to a microprocessor. That is understanding and the very high-quality human creativeness and creativity. It is gambling generation on the upstream stage and this is wherein the price is.

Nations win at the upstream level because the sale margins are so massive because the goods are niche and in most instances progressive with few players internationally. It isn’t always just the alternate or margins. Upstream technology layer create desirable jobs, whether or not in advanced or developing countries. Some of the first-class jobs in Africa are within the oil giants wherein upstream era guidelines. You create enviable suitable jobs for the residents. They have the cash to spend and lift different regions of the economy. They preserve jobs that carry honor and dignity and they use their brains to shape the sector.

You can make the same case for Pharmaceutical companies that mix elements, compounds, and so forth to create capsules. Some of the drugs are sincerely expensive but the components are reasonably-priced. People pay for the R&D invested in developing that drug. In growing countries, the recognition on marketing and selling the medicine. As in petroleum, ICT, it’s miles all approximately the downstream. Why the large Pharma will have margins of 1000%, these entities can barely command 6% margins.

So in essence, in this century, there are possibilities for countries. For developing countries, in the event that they preserve to compete on the downstream layer of the pyramid, they’ll locate it hard to move ahead considering the fact that competition is basically synonymous with technology. There is more risk, greater information requirement and more price on the upstream. And we want to get there.

How will we do this? Our countries need to have essential changes in our countrywide regulations on technical training or higher Science, Technology, Engineering and Mathematics (STEM). That is the solution. I trust in knowledge and schooling evolves it. It is about the enlargement of commitments on microelectronics, nanotechnology, biotechnology, mathematics, chemistry, physics, pc science, engineering, medicinal drug, and so forth and inside a generation we will emerge as players on the upstream level of era pyramid. And attain that exceptional price therein.

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