BOTSWANA’S COMPETITIVENESS POSITION IN THE BUSINESS EFFICIENCY FACTOR
This article is the third in a series of four articles that analyze Botswana’s competitiveness landscape by observing four critical areas, known as factors, considered key in promoting a nation’s overall competitiveness.
These four factors are economic performance, government efficiency, business efficiency, and infrastructure. The focus of this article is Botswana’s competitiveness position with respect to the business efficiency factor.
According to the IMD World Competitiveness Yearbook, Botswana’s overall competitiveness rank is 61st out of 64 economies, with a competitiveness index score of 38.9 out of 100. With regards to the business efficiency factor, the country is ranked 63rd out of 64 countries with a score of 23.8 out of 100 (as shown in figure 1). The rank for the remaining factors is 62 for economic performance, 42 for the government efficiency and 63 for infrastructure.
The business efficiency factor assesses the extent to which the national environment encourages the private sector to perform in an innovative, profitable, and responsible manner. The factor includes components which measures the level of productivity in companies, availability of skills in the market, the cost of labour, the efficiency of financial markets, the efficacy of management practices and how values in the general society shape and affect the efficiency of firms.
A high participation rate of females in the labour force (ranked 1st) and a low competitive cost of labour for firms (ranked 4th) are Botswana’s notable strengths in the business efficiency factor. Impressive rankings were also achieved in matters related to entrepreneurship performance with indicators showing a high total early-stage entrepreneurial activity (1st), a low entrepreneurial fear of failure (2nd) and a high women representation in the management of companies (1st). The World Economic Forum’s (WEF) 2020 Special Edition Report also showed that entrepreneurial culture in Botswana has strengthened in the past decade. However, it also points out that this has not yet fully resulted in the creation of new firms.
Botswana’s weaknesses in the business efficiency factor is centred around the inefficient and low use of digital tools and technology (64th), the low utilisation of big data analytics in decision making (64th) and the low rate of digital transformation (64th), as shown in Table 1. These rankings cause great concern as digital technologies can enhance Botswana’s private sector resilience, improve service delivery, expand access to global markets and foster efficiency. It is along these lines that expedition of the digital transition is one of the key strategies adopted by the Economic Recovery Transformation Plan (ERTP), with an allocated development expenditure budget of P3.1 billion. The ERTP aims to establish an ICT incubator Hub that would provide low-cost internet, infrastructure, and mentorship to the private sector.
Table 1: Botswana’s Business Efficiency Factor Weaknesses
Source: IMD World Competitiveness Yearbook, 2021.
|Use of big data and analytics
|Use of digital tools and technologies
As shown by Table 1, the country is not doing well on indicators related to employee training (63rd), and talent retention (62nd). These results are attained irrespective of the Human Resource Development Fund (HRDF) managed by the Human Resource Development Council (HRDC) on a levy grant system. According to the 2019/20 HRDC Annual Report, training uptake as measured by the number of companies claiming from the fund relative to the total number of levy payers stood at 24 percent. The WEF report also states that talent shortages in Botswana have become more pronounced, underpinned by outdated education systems and misaligned worker incentives and rewards. .
Botswana also struggles with low worker motivation (64th) and poor customer satisfaction (64th). This aspect was also highlighted by the Post Retreat Speech which acknowledges that service delivery is on the decline. Unfortunately, poor service delivery, low work ethics and low worker motivation adversely affect business operations and efficiency, which in turn hampers national competitiveness. To address these issues, the Ministry of Employment, Labour Productivity and Skills Development (MELSD) in collaboration with BNPC is developing a National Productivity Blueprint. The Blueprint will provide policy direction and focused actions aimed at improving these issues at both national and sectoral level. .
To address the issue of poor service delivery, the Reset Agenda advocates for a mindset change. However, it is worth mentioning that instigating a mindset change at national and societal level is not an easy task. In addition to education training, two techniques that Botswana could utilize to accomplish a national change in mindset are social marketing and design thinking. Social marketing is a technique that uses commercial marketing principles to change or maintain people’s behaviour for the benefit of individuals and society. Utilizing similar social marketing methods with short messages that draw attention to the importance and benefits of high job performance, quality service delivery and strong work ethic, for both the individual and the nation, could result in a national mindset change that could have ripple effects on productivity. As recommended, Botswana should also explore the use of design thinking to instigate mindset change at national level. Design thinking is a tool widely used to tackle and provide innovative solutions to ill-defined problems (such as low work ethic) as it reframes them in human-centric ways and focuses on what’s most important to the user. .
In conclusion, business efficiency in Botswana is mainly constrained by the low use of digital tools and technology, the low utilisation of big data analytics and the low rate of digital transformation. In addition to this, there are also issues of low productivity levels resulting from poor service delivery and low worker morale. As indicated by the Post Retreat Speech, a mindset change at national level is required to reverse this. Although this may sound highly plausible, instigating behavioural change of this nature at societal and national level is not an easy task. It is highly recommended that a concrete and well researched plan be developed for this purpose.