How some Zimbabwean firms have lost ground in export markets - failure to cope with technology

Zimbabwean manufacturers used to be competing fairly in the international markets. Distortions in the Zimbabwean economy have resulted in many companies fast losing their competitiveness in the past 3 years. The basic reason for losing such competitiveness is the failure to keep pace with changes in production process technology, for whatever reason. Those firms who failed to make optimal investments in technology lost their markets because they could not meet the product quality demands of export markets.

Symptoms of Failure to Cope with Technology

The following are the symptoms among Zimbabwean companies who have since fallen behind in technology: -

• Uncompetitive costs of production relative to what foreign competitors
• Deficiencies in product quality

Why did the Zimbabwean Companies fail to upgrade their technology?

Some firms had made initial capital investments in labour-intensive production processes to take advantage of the relatively low labour costs which prevailed in the country. However, the change in the state of technology rendered such methods ineffective to meet the required quality and precision in finished products. In some cases, investment in more automated production methods has become necessary. There are several factors which inhibited investments by Zimbabweans in improved technologies. Some of the reasons are as follows: -

• Some firms do not have search mechanisms for information on changing technological and market conditions and do not keep abreast of the technological trends in their industries. Such companies see no reasons for attending international trade fairs or technology exhibitions.
• The information gap had not been filled by any institutional arrangements initiated by ZimTrade, Government or industry associations for various reasons.
• Some firms had not made any investments in improved technology for lack of foreign exchange needed for importation on vital cogs of driving technology.
• Other firms could not make any investments in improved technology for lack of accumulated profits which could be ploughed back into the enterprises. Such firms had either accumulated losses or had failed to generate profits for a long time.
• Some firms had suffered from the effects of rigid price controls which prevailed in the country.

Zimbabwean firms had been in financial problems for a long time which eroded their capacity to make any significant investments in capital equipment, training and innovations. Investment in general had been low or stagnant.

What Should Be Done by Zimbabwean Companies

The following are methods which are relatively easy to implement but do have amazing results: -

• Some firms must put considerable efforts into improving their competitiveness by way of making serious investments in technology. Why ‘effort’? For some companies it is a matter of efforts - some companies’ management think they can do with highly skilled labour only to beat competition but I feel it is short lived. In some cases, investments in more radical changes in technology are needed to include changing to the use of microelectronic controls. Management have to prioritise the modernisation production process technology in order to keep afloat in the export market
• Top management has to develop appreciation of the pace and trends of technology development elsewhere, as a guide to the kinds of investment that must be made to create and develop new technological capabilities.
• Attend international exhibitions to keep abreast with changes in technology.
• Enter into partnerships with foreign companies or attract foreign shareholders who bring in new technology.