Introducing Austin’s Five Forces Model For Analysing Sustainable Development
Introducing Austin’s Five Forces Model for Analysing Sustainable Development
The sustainability dilemma is becoming more apparent. Working as a consultant at the Sustainable Development Goals Center Afrique (SDGCA) in Rwanda and on the World Economic Forum's (WEF) Global Agenda Council exposed me to the global framework for economic growth that safeguards humanity's and the planet's fundamental pillars.
The Sustainable Development Goals are about People, Planet, Prosperity, and Peace – and about ensuring that development is inclusive and leaves no one behind. These tenets were reinforced further during my interview with Professor Paul Romer, a Nobel Laureate and former World Bank Chief Economist.
Organizations, Population, Enablers, Infrastructure, and the Socio-Political Environment are the Five Forces driving sustainable growth.
ORGANISATIONS
The organization, whether public, private, start-up, or non-governmental, is at the heart of job creation.
A widely held axiom is that government cannot provide all jobs and is incapable of shouldering the entire economy on its own. Take Nigeria as an example; with government spending accounting for 5.7 percent of GDP in real terms (2019), non-government economic activity accounts for nearly all of GDP (about 95 percent ). This 95 percent must be empowered in order to stimulate economic growth.
What better vehicle than entrepreneurship to catalyze this economic growth?
Entrepreneurs provide 80% of jobs in many economies. Globally, it is well established that Small and Medium-Sized Enterprises (SME's) are a critical engine of economic growth and development. This sector is responsible for the majority of advancements in new products and processes, provides the majority of employment opportunities, and serves as a leading indicator of an economy's overall performance.
While there are only about 161 companies listed on the Nigerian Stock Exchange, the National Bureau of Statistics reports that the total number of MSMEs in the country was 41.5 million in 2019. Consider the number of jobs that would be created if each of these businesses were permitted to hire just one additional employee.
POPULATION
A developing society is based on the ideal of equality of opportunity for all members, allowing for the achievement of the highest aspirations and goals. While society used to be divided into haves and have-nots, it is now more divided into those who are included and those who are left behind.
This inequality is more pronounced in emerging markets, which account for 80 percent of the world's population. According to the National Bureau of Statistics, Nigeria has a 32.6 percent unemployment rate, while the youth unemployment rate (15-24 years) was 58.3 percent in 2020.
Young people who are unable to find work still require food. With a scarcity of legitimate options, illegal means become alluring.
Youth unemployment has been shown to increase all types of crime. Africa's population is expected to double to 2.5 billion people by 2050, roughly equal to the current combined population of India and China. Without a credible strategy for long-term employment, this could be a ticking time bomb.
What's more concerning is that, while the population grew at a 2.6 percent annual rate, the GDP grew at a slower 2.2 percent annual rate in 2019, according to the World Bank.
ENABLERS
Economic enablers are institutions and mechanisms that remove economic impediments and widen economic channels. Anything that increases economic activity in a community will eventually become a driver of the economy. Regulators are a vital enabler of a society.
Regulators, on the other hand, are frequently either a source of support or a hindrance to progress. The regulator should not stifle opportunity seeking or act in a way that entrenches protectionism.
While Nigeria has developed into one of the world's fastest-growing technology markets, attracting over $216 million in investment in the first quarter of 2021 alone, there is palpable fear among technology start-ups following a series of regulatory headwinds from various government agencies.
These include the Central Bank of Nigeria's prohibition of cryptocurrency trading and the Securities and Exchanges Commission's crackdown on technology platforms that facilitate the purchase of shares in foreign companies outside the Commission's regulatory purview and without the necessary registration.
Until more people believe they can successfully start and grow businesses, the economy will not have enough jobs. Additionally, health and education are significant enablers. On the supply side of the labor market, the education system must be structured in such a way that those who graduate, whether at the secondary or university level, have employable skills.
The Technology Platform is the most critical enabler in contemporary times. These Platforms enable significant service expansion at low cost, thereby attracting a large number of people to the consumption pool while also creating numerous jobs along the value chain that would not exist otherwise. The era of unprecedented inclusiveness has been ushered in by technological platforms.
For example, MPESA, Kenya's popular payment system, has more than 60% of the country's 33 million mobile users and processed $28 million in transactions in 2015. Similar applications have evolved across Africa, and Mobile Money services now account for 6.7 percent of the continent's GDP.
By leveraging Massive Open Online Courses, platforms have enabled us to reach far more students than our traditional schools can accommodate (MOOCs). According to Research and Markets, e-learning will grow to $325 billion by 2025, up from $107 billion in 2015.
The Covid-19 pandemic has put many sovereign health systems to the test, and many have been found to be woefully inadequate.
INFRASTRUCTURE
Infrastructure refers to the facilities required for a society to function properly, and includes, but is not limited to, power, ports, transportation, communication, and housing. Without these, the supply chain and the efficient production and delivery of goods and services will be severely constrained.
By 2050, the infrastructure required to house 2.5 billion Africans will be unprecedented in human history; 700 million housing units, 300,000 schools, and 100,000 health facilities. Can you imagine Africa in 2050 without a sizable rail network or a functional underground transportation system?
The Underground Tube system in the United Kingdom transports approximately 1.35 billion people annually and has been in operation for approximately 150 years. African nations such as Ethiopia and Kenya are making significant rail transportation advancements.
However, the most significant infrastructure shortfall has been electricity. Almost half of Sub-Saharan Africa's population lacks access to electricity. The resulting impact on entrepreneurship is difficult to fathom. If Africa were to achieve the same level of success in power as she has in telecoms, the impact on sustainable development would be enormous.
SOCIO-POLITICAL ENVIRONMENT
Nothing has a greater impact on long-term growth than a stable sociopolitical environment. It enables capital to be attracted for rapid economic development. A stable polity requires the rule of law. Any society that does not adhere to some code of conduct, whether public or private, tends to devolve into chaos and near-ungovernmentability.
Deterrence is enshrined in the law's indiscriminate application regardless of status, tribe, or creed. The pursuit of deterrence is what motivates developed countries to punish any high-ranking members of society who violate the law, particularly their leaders, who are held to a higher standard.
When we examine the behavior of people in wealthy and developed countries, we discover that the vast majority adhere to the following life principles: ethics, integrity, responsibility, the majority of citizens' respect for the rule of law, pride in their work, the desire to save and invest, and the will to be productive and punctual.
In poorer countries, a small minority adheres to these fundamental principles on a daily basis.
A society is not impoverished due to a lack of natural resources or because nature is cruel to them; rather, it is impoverished due to a lack of the proper attitude. Generally, conscience is discarded, and justice is sold to the highest bidder; this is what is referred to as a market society.
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