Even with its diamond money, Botswana Innovation Hub, adoption of cutting-edge technology, a phalanx of highly qualified marketing professionals and profusion of multi-national companies, Botswana has still not been able to sufficiently develop its local supplier quality. The result is that in the 2014/15 Global Competitiveness Report, the country is ranked third lowest in terms of local supplier quality in the Southern African Development Community, beating only Mozambique and Angola.
Asked to assess the quality of local suppliers on a scale where 1 represents “extremely poor quality” and 7 represents “extremely high quality”, Botswana interviewees gave responses that yielded a total score of 3.5. Overall the country was ranked 135 from a total of 144 countries. The national development of the only SADC countries that Botswana beat, Mozambique (131) and Angola (144), was delayed by decades of post-independence civil war.
“Local supplier quality” is an indicator under the “business sophistication” pillar. According to the report, this pillar concerns two elements that are intricately linked: the quality of a country’s overall business networks and the quality of individual firms’ operations and strategies.
“These factors are especially important for countries at an advanced stage of development when, to a large extent, the more basic sources of productivity improvements have been exhausted. The quality of a country’s business networks and supporting industries, as measured by the quantity and quality of local suppliers and the extent of their interaction, is important for a variety of reasons. When companies and suppliers from a particular sector are interconnected in geographically proximate groups, called clusters, efficiency is heightened, greater opportunities for innovation in processes and products are created, and barriers to entry for new firms are reduced,” says the report adding that individual firms’ advanced operations and strategies (branding, marketing, distribution, advanced production processes, and the production of unique and sophisticated products) spill over into the economy and lead to sophisticated and modern business processes across the country’s business sectors.
In one respect, Botswana’s lack of business sophistication could be an indictment on those who dominate the country’s business environment ÔÇô that they are not investing enough in the local economy. In the same report, the indicators of “prevalence of foreign ownership”, “extent of market dominance” and “control of international distribution show that Batswana are economically disempowered. In the past, a University of Botswana has revealed that foreign companies that do business in Botswana prefer to do research and development in their home countries than here.