ENTREPRENEURIAL NETWORKING: INDUSTRIAL ESTATES IN GHANA

262

ENTRPmNEuRlilL N E m O W G : INDUSTMAL ESTATES Rv GHIANA BARBARA E. MCDADE & EDWARD J. MALECKI

Depadment of Geography, University ofFlorida, GainesviUe, FL 3261 1-7315, United States of Amaica

Received January 1996; revised May 1996

ABSTRACT This article looks at networking activities among entrepreneurs of smallscale enterprises in an indusbial district in Ghana. The purpose of the study is to identify the type of inter-firm interaction that takes place, and to determine the effect it has on the productive capabiiitiesof the firms and the industrialization process. The study is set in the context of research on industrial dis~cts and inter-firm networks which have been associated with technological change and competitive success for firms in advanced economies. While some believe that there may be little about industrial districts in places such as Third Italy or Silicon Valley which can be h-ausferred to developing countries, the fact remains that small firms everywhere are more similar than different. Therefore, an understanding of the process of networking in Ghana may provide i n s i t s on the nature of these activities and their effectiveness in contributing to enterprise growth and the thickening of the industrial base in developing economies.

Keywords: Economic geography, Ghana, questionnaire interviews, industrial districts, entrepreneurial networks, small- scale enterprises

INTRODUCTION

Inter-firm interaction has come to be recognized as an essential part of technological change and of competitive success. A firm cannot succeed only on the strength of its own capabilities; it must uti- lize the expertise, information, knowledge, and experience of customers, suppliers, competitors, and institutions. For small firms, external information is especially critical, for small enterprises con- sist in many cases only of the individuals who form them. Thus, the ‘firm’s’ contact network is actually the contact network of its owner-manager. This article examines contact networks of small firms in Ghana. The firms, located in an industrial estate in Accra, are studied within the context of research on industrial districts and inter-firm networks, two of the central phenomena of the 1990s and a primary feature of recent research in advanced economies (Aldrich & Zimmer 1986; Butler & Hansen 1991; Dubini &Aldrich 1991). We show that interaction among these small Ghanaian firms extends their individual productive capabilities and helps them to cope with the industrial ‘thinness’ associated with inadequacies in institutional infmtruc- ture in African economies.

INDUSTRIAL DISTRICTS

Partly on the basis of dense networks of personal and business contacts, the industrial districts of the Third Italy - located between the industrialized north and the underdeveloped south - have attracted attention as a potential model for development (Piore & Sabel 1984). A large body of research has examined the Italian cases, as well as others located throughout Europe, in an attempt to see what could be transferred to other settings (Goodman et al. 1989; Pyke et al. 1990; United Na- tions 1994). Five aspects of the industrial district model are thought to be most applicable to developing countries: (1) the reliance on small and medium sue enterprises (SMEs) rather than large industrial corporations; (2) the strategic targeting of market niches appropriate for the small, flexible production runs in which SMEs specialize; (3) the rural location, in contrast to the urban agglomeration typical of the Fordist industrial model; (4) clustering of SMEs in close proximity; and ( 5 ) a preponderance of informal interaction and collaboration among the firms (Schmitz & Musyck 1994; SpSth 1992).

Networks created in industrial districts promote cooperative inter-firm competition based on

Tijdschnift voorEconaischt en Sociale Geograjie - 1997, Vol. 88, No. 3, pp. 262-272

EhTWREhEUlUAL hETWORKI1vG: RVDUSTRlrLL ESTATES IN GHANA 263

innovation rather than lowering wages (Nadvi 1994), trust relations between firms and between employers and skilled workers, active self-help organizations, and policies in regional and municipal governments which strengthen local industry (Schmitz & Musyck 1994). Amin (1994) summa- rizes four features as the essence of an industrial district: inter-firm dependence, structures of sociability, a local industrial atmosphere, and institutional thickness. Both Amin (1994) and Hansen (1992) regard personal and business interaction, based on trust, as a key aspect of industrial districts in both developing and advanced economies.

However, others believe that there may be little about industrial districts that is transferable to developing countries, despite the informal, even pre- industrial, nature of some descriptions of Italian districts. The shift from an informal economy to industrial districts such as those in the Third Italy is not an automatic process (Amin 1994). Informal economies in developing countries rarely exhibit the industrial thickness which Amin considers critical to industrial development. Instead, informal economies are characterized by ‘institutional thinness’ and the absence of efficiently run, pro-active public institutions which support the economic collectivity (Amin 1994, p. 68). Institutional thinness is evident in the policy infrastructure at the local or regional level for assisting small firms, which is often completely absent in developing countries. Yet, many entrepreneurs struggle to create and sustain new businesses.

Creation of industrial estates (industrial parks in the USA) and science parks is an example of a policy that attempts to ‘create’ inter-firm interaction through proximity and agglomeration. This policy is based on the observation of early exam- ples in the USA, including Stanford Research Park as an element in the development of Silicon Val- ley. As Massey et al. (1992) and Johannisson et al. (1994) have shown, interaction does not necessarily take place despite geographical proximity; ‘something else’ is needed - presumably Amin’s structures of sociability, trust, and an industrial smcture that demands interaction.

SMALz.FIRMsINAFRICA

African entrepreneurs are a diverse group, as entrepreneurs are everywhere, and generalizations are difficult. However, the fact remains that small firms everywhere are more similar than different

(Fass 1995). They must, at a minimum, demon- strate production efficiency and the ability to make a profit.

For innovation, African countries have relied heavily on national research organizations, univer- sities, and foreign firms. However, evidence from various countries suggests that the promotion of new technologies is best done by technical entrepreneurs @ma et al. 1993). Some technical entrepreneurs are found in the informal sector. Tech- nologists in Kenya’s jua Kali (literally, ‘hot sun’) outdoor informal sector enterprises display cre- ativity, flexibilityand improvization. Working with limited tools, materials and other resources, “in contrast to the usual picture of them making second-hand things in a second-rate way”, jua kali artisans add an innovative element even to products that are imitations, make quality improve- ments, and lower the cost of production Uuma et al. 1993, p. 97).

The knowledge and skills, unique production techniques and a high level of flexibility are developed in several ways. First, most respondents learn skills taught on-the-job, through an appren- ticeship, or from family members. A large propor- tion of those engaged in metalwork received formal training at village polytechnics or technical schools (Juma et el. 1993, pp. 103.107). Second, a large amount of inter-firm cooperation takes place among Kenyan small-firm owners. Borrowing of tools and equipment is common and nearly all equipment and spare parts are purchased from local shops. Third, firms exhibit flexibility. Metal- working firms, for example, engage almost equally in manufacturing and repair. In addition to cus- tom work and small batch production, some production approximates mass production. Such items as stoves, pots, pans, pails, chairs, and swords are produced by many firms at volumes of over 30 per week Uuma et al. 1993, pp. 124126; McCor- mick 1991). Such flexibility runs the risk of be- coming overdiversification (Ndegwa 1994), and trust-based relationships can result in credit prob lems and a tendency to hire members of the extended family rather than more qualified person- nel (Himbara 1994, pp. 89-90).

African countries fall short of meeting all of the strict criteria for industrial districts based on European experience despite government attempts to create agglomeration economies via industrial estates. Addressing institutional thinness or thickness, Bianchi and Giordani (1993) suggest

264 BARBARA E. MWADE &?WAR0 J. MkLECKl

that local policies that support industrial districts in Italy address four objectives: the diffusion of technological innovation; cooperative relations between firms; efficiency in the internal functions offirms; and external economies of scale or scope. To 'translate' these from the Italian to the Ghana- ian context requires an understanding of small- scale enterprise in Ghana.

SMALGSCALE E " R I S E s IN GHANA

By international standards, most Ghanaian firms are very small. A 1990 survey of 1,365 enterprises in six locations found that 88.6% had five or fewer employees, and only 2.6% had more than ten. A large percentage (42%) of firms had been founded since the Economic Recovery Programme (Em) in 1983, including those started by many educated entrepreneurs who formerly would have worked in the public sector (Osei et al. 1993, pp. 5460). Those with higher levels of education proved to be more aware of institutional support. Formal vocational or technical training is rare, found in only 15% of entrepreneurs surveyed. Ex- porting is extremely rare, done by only 1.7% of firms (Osei et al. 1993).

Small firms are found across many manufacturing sectors, including household utensils and fur- niture, which are among the sectors represented in Ghana's exports (Anyinam 1994). Their p r e ducts are relatively simple, but they respond rou- tinely to market signals that demand frequent changes in style and format. Most small firms in Ghana serve individual consumers, rather than other firms (Osei et al. 1993). In general, Ghana is relatively open to imports, and Dawson (1993) has observed an ability of small firms to displace imported products, such as machine and tool parts, specialized nuts and bolts, and bulky food- processing equipment.

A number of institutions have been put in place since 1970 to assist and promote small firms in Ghana. The National Board for Small-Scale In- dustries, within the Ministry of Industries, Science and Technology (MIST) includes the Ghana En- terprise Development Commission (originally the Office of Business Promotion). MIST also estab lished in 1987 the Ghana Regional Appropriate Technology Industrial Service (GRATIS) to help upgrade small-scale industrial activities by trans- ferring appropriate technologies to small-scale and informal sector industries from the grass-roots

level. GRATIS supervises regional Intermediate Technology Transfer Units and in order to facilitate industrial deconcentration, the first six of these were established outside of the capital city of Accra (in Tema, Tamale, Cape Coast, Ho, Sun- yani, and Kumasi).

INDUSTRIAL DISTRICTS IN GHANA

The Ghana Government's policy of establishing industrial estates dates back to the 1950s although the early programs targeted only large enterprises. The objective, then, was to concentrate industry where it could benefit from external economies and from an eficient provision of infrastructure and other public services, and where it could stimulate economic growth in the areas surrounding the industrial estates (Darkoh 1973). However, most of these large industries were either owned by foreign investors or by the Ghanaian state and their linkages were primarily to suppliers and consumers overseas. As a result, they were not very effective in supporting the development of small domestic enterprises. A similar underutilization of industrial estates has been observed in Kenya (Ikiara 1991).

An industrial census taken in 1962 revealed that small-scale industrial enterprises (defined as establishments with less than 30 workers) em- ployed 90% of Ghana's manufacturing labor force (Darkoh 1973). In this same year, an industrial district known as the Odawna Light Industrial Es- tate was established in the capital city of Accra by the Ghana Government, as part of the national industrialization program of Kwame Nkrumah, first president of the newly independent republic. The objective was to provide a secure site and infrastructure setvices for the many small indigenous businesses in the urban informal sector.

Odawna Light Indusmal Estate in Accra and Suame Magazine in Kumasi (so-named because of a munitions plant originally on the site), are located in the capital and the second largest city, respectively, and are two of the largest industrial districts in the country comprised of small and medium-sized businesses (Quarcoo 1985). Light industrial districts or estates are also located around Accra in the towns of Tema, Madina, and Teshie-Nungua. More recently, estates have been sited in other parts of the country, such as in the regional capital Tamale, to stimulate industrial growth in the underdeveloped northern regions.

~REPREhEURLAL hETWORKLVG: INDUSTRIAL ESTATES IN GHANA 265

Figure 1 shows cities in Ghana in which industrial districts have been established.

In Suame small firms are clustered in a vast industrial shanty town north of the city. In four sectors - carpentry, vehicle repair, blacksmithing, and engineering - these firms have conquered new markets and have, to varying degrees, suc- ceeded in diversifying and upgrading production. The clustering of firms in Suame has had two ben- eficial effects, according to Dawson. First, inter- firm cooperation has permitted small workshops with limited staf€or equipment to share workwith, or to subcontract to, neighboring enterprises. Sec- ond, the engineering firms, which had maintained the highest level of competitiveness among the sectors studied, have evolved into the manufacture and maintenance of equipment utilized by other small firms. These capital goods have enhanced the technological capability of user firms by allow-

ing them to compete in niche markets that other- wise would not have been accessible (Dawson 1992, pp. 37-38). These benefits of clustering are the same as those identified in Italy and elsewhere: greater innovativeness and success in market niches as a result of inter-firm interaction (Lund- vall 1988). The industrial cluster in Suame as reported by Dawson (1992) is beginning to exhibit the characteristics of collective efficiency which help develop industrial thickness.

ODAWNA LIGHT INDUSTRIAL ESTATE IN ACCRA

We now focus on the Odawna Light Industrial Es- tate in Accra. When itwas established over 30years ago, Odawna was near the northern boundary of Accra. However, as the capital grew from a popula- tion of 350,000 in 1960 to over one million people

Fig. 1. Location of indushial dishicts in Ghanaian towns.

266 BARBARA E. MCDADE HELlWARDJ. MALECKl

3Oyears later, the city expanded around the indus mal estate and Odawna is nowjust north of downtown Accra. It is adjacent to Adabraka, a large section of town which is a mix of commercial and residential activities.

The objective of this study is to i d e n w what kind of inter-firm interaction occurs among the enterprises in Odawna Estate, and the impact it has on the productive capabilities of these enterprises. Information was collected from onsite interviews in late 1994 with owners and workers in the enterprises. Owners of eight enterprises were selected at random and asked open-ended ques tions to determine the type and incidence of inter- firm interaction. These eight enterprises are known as complete ‘workshops’ and are described as firms employing at least 20 workers or apprentices. The executive secretary of Odawna Estate (Tenants) Association said that there are 34 such workshops in addition to the hundreds of micro- enterprises (those with 0-9 employees).

Since most smallscale enterprises in Ghana do not keep detailed accounting records, it is difficult to determine objectively the impact of interaction and cooperation (‘economies of trust’) on the fi- nancial ‘bottom line’ of these businesses. There- fore, this analysis relies, in part, on the firm owners’ assessments of the impact of their interaction. In addition, itwas possible to supplement the owners’ statements by observing their interaction dur- ing the course of the field work. For example, the sharing of workers, tools, and information was ob served by the interviewing author. The context of the analysis draws heavily upon the previous dis- cussion of inter-firm interaction and its effects in other industrial districts. The method used to as- sess the efficacy of Odawna industrial district consists of identlfylng the types of inter-firm interaction, and ‘matching’ it to an effect or impact upon a firm’s productive capabilities.

Information is also presented from an interview with the owner of another local enterprise - a modem, mediumscale engineering firm. Al- though this company is not within the Odawna Industrial Estate, it is located near Odawna in an area zoned for larger foreign- and state-owned companies. This company supports Marsden’s (1990) conclusion that there is no ‘missing middle’ in the range of indigenous African business from micro- to largescale enterprises. The information collected about this firm, a medium-sized (35-40 employees) privately owned agro-processing

company, provides additional insight into the circumstances of local indusmes in Ghana.

TvppJ of enterprises at Odawna - The majority of enterprises at Odawna are involved in the automobile industry: repair and maintenance, rebuilding engines, manufacturing engines and parts, upholstery, painting and finishing. There are other artisanal enterprises, such as woodcarvers and manufacturers of small household products and utensils from aluminum and other metals. Firms which support other businesses by selling parts, supplies, and other materials also are located at Odawna, aswell as ‘market sellers’, mostlywomen, who sell prepared food and personal items to the tenants and their customers. Currently, there are more than 5,000 owners, master artisans, and their employees who often are apprentices. Most of the employees at Odawna are men, but a few women have been hired as apprentices as women in Ghana begin to enter nontraditional occupations.

Site services at the industrial estate - The concentra- tion of enterprises at the industrial estate is seen by the tenants as an improvement over scattered locations. One of the owners said that “we all started small - under a shade tree”. Tenants pay a monthly fee to lease their sites. They must build their own structures. Electricity is supplied through a crisscross of overhead utility lines and piped water is available. One of the major com- plaints among tenants is that there is no public sewer system on the site. Procedures for garbage and solid waste disposal are the responsibility of the individual tenant. The ‘system’ consists of ac- cumulating piles of trash which is eventually burned at the site. However, due to the scarcity of resources, materials and parts which would proba- bly be considered waste and beyond their useful life outside Africa are refurbished and recycled. This reduces the amount of waste accumulated in one sense, but it also contributes to the appear- ance of a lot of ‘junk‘ at the site. Because the city has grown around the estate, there is little room for expansion. Several of the owners complained that Odawna is already overcrowded. There is little space either for current workshops to expand or for new tenants to come in.

As noted above, there are 34 complete workshops at Odawna, each employing 20-50 workers. They provide an ar ray of services. Each automobile workshop in the Odawna industrial estate

EhTREPR.,??NEc’RL4L NElWORkZVG: IADUSTRL4L ESTATES EV GHANA 267

should have at least four master artisans in several specialty areas: mechanic, auto electrical, body works, paint spray and upholstery. However, a workshop usually has one or two specialty areas in which it is most proficient. The interaction with other firms allows a workshop to complement its particular area of expertise with that of another workshop.

Support services for the enterpzres - Owners reported that in the early years they received no government assistance other than provision of the site. However, the national and the local municipal governments are establishing agencies to provide some measure of support services to small enterprises. Several are identified at the beginning of this section. The Council for Indigenous Business Association (CIBA) in downtown Accra interfaces with enterprises at Odawna.

The CIBA was about one year old at the time of the interview for this study, having been established in 1993. It startedwith a Business Assistance Fund of one billion cedis ($1 million) to provide soft loans to businesses which must become members of the Council. Individual businesses must form orjoin an association (for example, the Cane and Rattan Weavers Association) and the association becomes a member of CIBA. About 24 business associations joined in the CIBA’s first year. According to the CIBA director, more associations are expected to join as they learn about the program. One of the goals of CIBA is to encourage indigenous businesses to organize themselves into associations in order to achieve more economic and political clout. The CIBA in Accra provides unsecured loans of up to 2 million cedis ($2,000 in 1994); larger loans must be secured and usually the business’ building or plot of land is used as collateral. Unlike most commercial banks, CIBA will provide very small loans. In perhaps a typical transaction witnessed at the CIBA office, a short- term loan of 150,000 cedis ($150) was made to an owner so that he could purchase materials to complete a customer order. CIBAs also have been started in other towns in Ghana to assist local entrepreneurs.

Masters/shopowners in the automobile enterprises at Odawna belong to the National Associa- tion of Garages. They quallfy for membership by passing a test administered by the National Voca- tional Technology Institute, a government agency which was established to provide services to small

enterprises. Currently, a master artisan pays an annual membership fee of 20,000 cedis (about USS20).

Inter+n interaction at Oduuma - As Dawson ( 1992) found in Suame, owners and workers in Odawna engage in cooperative efforts such as sharing tools and the use of heavy equipment. Three of the owners interviewed had purchased electrical lathes and other imported equipment. The owner who is also executive secretary of the Odawna Estate (Tenants) Association said he paid one million cedis (about $6,000 in 1986) for a used lathe which he bought from a friend who had imported it from Germany. He also owned a machine which tooled metals to make engine pistons and other motor parts.

Labor is lent out among shopowners when a shop has a large job for which its regular s t a f f is insufficient There seemed to be a camaraderie among artisans in thatjobs were shared within the Odawnaestate instead ofhiring from outside. Out- side hires usually come to the industrial estate as relatives or friends of existing workers.

Artisans also shared information on improving or m o d q n g their techniques and work procedures. Several of the master artisans reported that they had refined their technical skills through either formal study of automobile mechanics in Ger- many or by working in German factories.’ Infor- mation is shared in scheduled association meet- ings, semi-formally by instruction to apprentices, and by observation. Some of the artisans had attended technical ‘colleges’ in Ghana, such as Accra Polytechnic School. These institutions specialize in teaching technical skills. Most of the workers, however, learn by apprenticing themselves to master artisans. As apprentices, they begin with simple tasks and assume greater responsibility as their training progresses. At the appren- tice level their salaries are little more than ‘chop money’ to buy meals or snacks from the food vendors on the estate.

A summary of the types and extent of inter- firm interaction among enterprises at Odawna is shown in table 1. Figure 2 relates this interaction to some of the effects on the firms as reported by the owners and observed by the interviewing author.

Advertising for services and products is by word of mouth. The centralized location and the agglomeration of businesses is a marketing strat-

Table 1. T e s and extent of inter-finn inleradion a m o n g f i m in Odawza Industrial Estate in G h n a

Type of interaction

Sharing of tools Sharing of equipment Loaning workers Subconaacting for large jobs Social interaction of owners Professional interaction of owners Word of mouth advertising

Extent of interaction among firms

All firms - frequent occurrence Some firms - frequent Some firms - frequent Some firms - occasional Some firms - frequent .4l1 firms - occasional All firms - frequent

some: frequent occasional:

at least 3 of 8 firms interviewed two or more times a week one or two times a month

egy in itself because people all over Accra know that Odawna is a centralized location where their automobiles can be repaired or rebuilt, and some other products bought. Acting as wholesalers, the wood carvers and utensil makers also sell their products to market women and other vendors who retail the products at other sites in town.

A MEDIUMSCALE MODERN ENGINEERING FIRM

The firm studied in this section is one of four mediumsized indigenous agm-processing firms lo-

cated in Accra. The company has been at its pres- ent site in an industrial estate since 1974. It is a secondgeneration firm, having been founded in the 1950s by the father of the current managers who moved to Accra from his village. The founder started as a blacksmith making and repairing tools and small machines as did several of the older artisans at Odawna. He prospered and sent his sons to the University of Science and Technology in Kumasi to study mechanical engineering. Now the sons are cmwners of the business.

The company has 35 employees. It manufac- tures machines which process agricultural pro-

I Expandedtechnical I mpauty

I Dissemination of I information

I I

I , socialactivity

I

Fig. 2. Effects of inter-finn interaction on finn f productive capabilities.

ENTREPRENEURLU hETWORKING: LVDUSTRIAL ESTATES lN GHANA 269

ducts: flour mills, grain grinders, sugar cane crush- ers, nut presses, rice hullers, and does general metal fabrication. Although the company used to be a training ground for teenage ‘school leavers’ to receive on-the-job training as apprentices, it now primarily hires workers who are already trained at other shops or in school. This is due to the more advanced nature of the firm’s production processes and the owners’ emphasis on maintaining high product quality. Their primary market is domestic sales. The major competition, according to the ownergeneral manager, is not just from imported foreign products of high quality, but also from cheaper, poorerquality goods produced in makeshift ‘roadside’ stands by machinists with informal or lesser training.

There are three other indigenous mediumscale agro-processing companies in Accra: one is owned by another Ghanaian, another is owned by an ethnic Indian, and the third is owned by an ethnic Lebanese. These four owners know each other and meet occasionally to discuss their mu- tual problems. Although the current government expresses enthusiasm for supporting local industry, the Structural Adjustment Programs are felt by these entrepreneurs as “not the way to go”. They say that a major problem is lack of interest in help ing indigenous enterprises to develop. This onus was placed on both the public and private sectors - on the ministries which regulate and promote industry and trade, and on the commercial bank- ing system.

Indigenous innovation is perhaps, inadver- tently, undermined by the institutions themselves. The owners believe that banks often do not under- stand that product development is a long-term process. Most loans are for short periods, whereas it may take three to four years to design and develop a new machine, in addition to the period required to test and market it. Current interest rates of 2833% prohibit borrowing for medium- sized manufacturers. They said that their companies along with other local firms had previously presented feasibility studies and manufacturing data to the government and banks. Thus far, these initiatives have not resulted in what they consider to be suitable policies for development financing, among other things.

Expanding production and increasing sales are hampered by constraints on manufacturing capability. Even these successful mediumsized firms do not always have adequate capital to purchase mo-

dem, high volume equipment. There are few resources available for internal research and development. The owners interviewed said their company still uses a 40-year old lathe, and another production machine is 60 years old. However, the owners of these four agro-processing companies are trying to cooperate in order to petition banks and relevant government agencies to work with them to implement more appropriate policies and programs. Thus, in the interaction of firms through social contacts among the owners, institutional changes are being initiated.

CONCLUSIONS INDUSTRIAL DEVELOPMENT AND INNOVATION

Observation of the enterprises at Odawna reveals a pamdox. On the one hand, there are many ex- amples of ingenious innovation in the adaptation of material resources such as recycling worn-out rubber tires into ‘new’ hand-tooled but precision- calibrated wheel bushings for expensive cars, such as Mercedes Benz. Piston cylinders which are the basic mechanical component of automobile engines are fashioned from scrap metal on electrical- ly powered imported equipment. Vehicles which would have long been assigned to thejunk heap in wealthy countries are resurrected into operation through the skills of Odawna mechanics.

However, much of the energy of innovation is consumed in finding ways to accommodate the scarcity of basic economic and material resources. Instead of being able to expand or improve their technology significantly, these artisans are con- tinuously engaged in reconfiguring the available inputs and processes. As a result, rather than inno- vating to produce new processes or products; they are involved in adapting technologies which are already common or even outdated in the more industrialized countries. This keeps the scale of operations as well as the growth potential of these enterprises at a small and stagnant level. The pur- chasing power of their domestic market is limited, and it is a continuous struggle to maintain cash flow and secure essential resources. Several of the more successful artisans at Odawna are convinced that they have enough experience and know-how to actually manufacture an automobile in Ghana. But the possibility of designing, developing, and manufacturing a complete vehicle - and not just repairing or replacing parts - seems remote given the current circumstances.

270 BARRARA E. M W A D E UEDWARDJ. h4ALECKl

The lack of capital finance is, of course, a central problem. But the lack of comprehensive information andexperiencein larger-scalemanufactur- ing seems to be as great a n impediment to improving Ghana’s industrial capacity. The knowledge - and awareness-which a university degree provides seems to have advanced the mediumscale engineering f m in this study to a better position of sustaining and eventually expanding its operations. Investment in education would certainly increase the quality of the human capital inputs at the smaller enterprises on the industrial estates. This does not necessarily mean college training. -4s noted previously, some small enterprises bene- fitted from the infusion of information from artisans who had studied in Germany or elsewhere, or who had attended one of the local vocational schools or polytechnics.

The cooperative sharing of information and other resources is one of the advantages as well as purposes of industrial districts. Geographical agglomeration and inter-firm interaction facilitate the sharingof information. However, the problem within the Odawna industrial estate is not alack of cooperative interaction. Rather, it is the low level and limited scope of technological information which the tenants have to share. Few of the mechanics have been formally M e d , and there are no regular channels through which they can ac- cess new technologies.

It is unreasonable to expect that the problem of the lack of formal education will be solved with the current generation of artisans. Revisions in the national educational system to meet the needs of the nation are currently underway. The educational system in Ghana is being redesigned to in- corporate more technical, commercial, and entrepreneurial education so that graduates even at the middle school level - the level at which the majority of Ghanaian children leave school -will be able to find or create gainful employment for themselves. Because four-year, residential colleges are expensive to establish and operate, a model similar to the American junior college system is being studied as another component of postsecondary education. Of course, it will take years for students and graduates to filter up and out through the

1. Machinery skills are more prevalent in Ghana rhan in Kenya (a country whose industry has been studied

educational system. More immediate benefit could be achieved by using the cooperative and agglomeration aspects (the mison dZtre) of the industrial estate to disseminate and diffuse more and higher levels of technological, trade, and management information among the enterprises.

While it may be imprecise to categorize the Odawna Industrial Estate along with industrial districts in Europe, certain common characteristics exist. From the evidence we have presented, and from that reported by Dawson (1992,1993), cooperative competition is a central characteristic of industrial estates in both Europe and Ghana. In Odawna, cooperation among small firms is com- monplace, mainly because no firm has all the tools or equipment necessary for the range of work at- tempted; thus, borrowing from others is the norm. Lending of employees is also common. It is not clear whether specialization has taken place, along the lines of European industrial districts, outside of auto repair operations.

Structural Adjustment Programs ( S A P ) in Af- rica have targeted larger formal sector firms in order to correct macroeconomic policy mistakes of the past The effect of SAP on small firms is mixed. Small firms that are able to modernize and upgrade their products and services may benefit from SAP policies. However, S A P has introduced import liberalization policies that have caused a flood of cheaper imported products that compete with local goods. To stay afloat, many indigenous firms have developed linkages which enable them to compete in local markets niches where innovation and flexibility favor small firms catering to specific domestic tastes and requirements. These linkages may eventually provide opportunity for the more innovative small firms to expand their production capability, and pass on their innova- tions to other firms. Such dynamics bode well for the future of small enterprises in Africa, which have shown remarkable resiliency in the face of what have been, at the least, adverse conditions. Industrial estates in Ghana may provide the spark for collective efficiency and toward industrial thickness documented among small firms elsewhere.

to a relatively greater degree). Part of the reason is a history of contact with German technology

EhTREPREh?EuRLAL NETWORMNG: liWUSTRLAL ESTATESIN GHANA 271

through the colonial presence in eastern Ghana, fonnerlyapartofTogo, aGerman protectorateuntil after World War I. Indigenous anisanal traditions have been reinforced in recent years by Ghanaians

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ENTREPRENEURIAL NETWORKING: INDUSTRIAL ESTATES IN GHANA