Prof. Pat Utomi

May I begin with commendation for the Sun Newspapers for finding it worthwhile to convene this South East Economic Summit. I am particularly pleased about the initiative because I have made the point on several occasions that a profitable way to advance well being in Nigeria is to take a regional approach through the concept of zones of development.To be invited to speak at a South East Economic Summit on a day when South-South Governors are meeting one hours drive away in Port Harcourt to discuss economic cooperation is much elevating. I do hope the two zones of development will find areas of collaboration to get greater mileage for the people who live in these rainforest heartlands of Nigeria.

In what follows I shall, in the main, be looking at the paradox of community spirit and individualism in Igbo culture as it impacts the enterprise culture; I will also review what I have come to call the “emigrant economic ethic” and how it has come to support the venturing of Ndigbo; and particularly how the march of African capital has been affected by contemporary culture in post Civil War Igbo Ventures. I do also hope to discuss the attitude of Igbo businessmen and women to human capital and join stock companies; and the orientation towards domicile in the informal sector.

Culture and the paradox of community/individualism spirit in setting enterprise to ascent

Tom Forrest in his book on the advance of African capitals the journey of several of Nigeria’s first generation entrepreneurs, among them the early Igbo tycoons that went from produce buying agents to transport magnets. In the years since Sir Odimegwu-Ojukwu put his imprimatur on what makes an emergent African tycoon many business put of Igbo extraction have made sizeable fortunes. It is true, however that few of the early wealthy families have been able to sustain wealth past one generation. Many of the ventures have, infact failed, rather than change ownership.

How where these ventures built and how did the factors that facilitated their emergence fail to propel them into the status of professionally managed enterprises that, in the norm of the modern organization exists to continue to exist.

Igbo traditions of individualism make them more easily attuned to markets and free enterprise orientation. Let the Igbos have traditionally had a spirit of community that led to their acting in concert to promote the good of an individual of the community where the advance of that individual is seen as having value for the essence of the community. So that whereas Igbos did not take the sense of community to the collectivist extreme that is discouraging of individual venturing the institution building that should provide strong pillars for continuity in business seems to be repeatedly sabotaged by a certain individualistic disposition that has made sustained success problematic.

My experience in counseling business people reveals how theses traits which exist in and have worked well in other market-dominant ethnic nationality groups like the Chinese in Asia outside of China and the Jews of Diaspora somehow has not take concrete form in the deepening of the kind of institutions which support growth of clusters around Nnewi and Aba which then affect culture so that the market-dominance of Ndigbo acknowledged in many writings and particularly so in Amy Chua’s book; World on Fire does not end up a network of informal sector traders in a world in which word and prosperity is defined by knowledge workers and the technologies that enable them create value and wealth consequent on such quantum leaps in value creation.

Attitude towards human capital:

An old colleague of mine from my University of Nigeria days who is currently a Professor in the American Midwest has spent a good part of his career researching labour issues in manufacturing in South Eastern Nigeria, The remarkable conclusion of his many published works is that Igbo entrepreneurs are penny wise pound foolish where the deployment of human capital is concerned, In his thesis he provides empirical evidence of the low quality and high turnover of staff in these ventures.

Considering labour cheap and abundantly available, these entrepreneurs hire the unskilled, pay them poorly, invest in training them to get the job done while the staff see themselves as just managing until they find a better job, Once they find something better they move on and the various circle of investing in training continue at the business, This has proved to be very expensive for the businesses that do not seem to realize they would save a lot if they invested more in hiring the right people and paying them well so they stay much longer and the firm profits from deploying hire quality human capital with attendant productivity gains.

Orientation to joint stock enterprises:

A friend of mine from the South West who has served on more than two Columbia Universities, Professor Deborail Brautigham, found emerging nearly two decades ago. Those institutions which would have deepened the roots of enterprises seems to be compromised by attitude towards use of Professional, Professionalizing business succession and planning trust in ownership structure that makes a broad block of stakeholders committed to ensuring smooth transition of enterprise leadership from one team to another.

What we have found is that whereas the business initially thrives because the original sense of a community created trust that produce dedicated apprentices and the pooling of resources for one person or persons performing an agency function like going to Taiwan to order goods on behalf of others or the group (a factor in unfortunate decline), the individualism in the culture gets in the way of adapting organizational forms that confer leadership on teams, especially those separated from owner/founders, have troubled Igbo enterprises.

This is further compounded by the fact that a post Civil War promotion of the ethic of “Having” over that of “Being” which was the pre-civil war essence of the Igbo mindset has reduced the learning that could come from education that would have yielded better use of western concepts of management as people began to trade off the knowledge from education with the financial muscle, all be it transient, that quick trade consequence was that Igbo enterprises last the benefit of growth that would have accrued to enterprise from and Sons where Okeke may have sent his Sons to Medical Schools for the prestige of being “Papas doctor” leading no child’s interest in the “apparently untidy” business of selling iron rods or whatever it is that earned the money to pay for medical school education, or where the son may have opted not to go to school but is too busy enjoying the four wheel drive off daddy’s sweat.

General observations:

Modern, successful enterprises go through a process of enslaving that involves three main activities; Opportunity identification, Commercializing the venture; and Institutionalizing the venture. Ndigbo tends to do well on the first two.

The phenomenon of “Njepu” creating a migrant people who became embedded in other Communities where they are minorities invariably disposes Ndigbo to being able to focus on mainly enterprise.

As I have written elsewhere regarding the Chinese of South East Asia and Vietnamese and Jews In America, such groups usually unable or unwilling to get involved in politics and other social prestige activities became obsessively involved, economic pursuits, something I have called “the emigrant economistic ethic”

This has led Ndigbo to being -good at identifying opportunities and has also made them victims as encapsuled in the subtitle of Amy Chua’s book: “World on Fire: How Exporting Free Market Democracy Breeds ethnic hatred and global instability”. Market dominant minorities, if they pay so dear a price, must find a way of ensuring enterprises they build last.

My prescription will therefore be that arrangements through Entrepreneurship institutional Extension lessons drawn from other cultures. This was indeed another paradox for a people Simon Ottenberg had said were the most adoptive and open to foreign culture in Nigeria.

My view is that these developments flowing from the disruptive impact of war on culture has left the change for leadership in Igbo land to work to boards in which the prime entrepreneur was from the South East once cynically said some that something in the DNA of Ndigbo makes it difficult for them to run Joint Stock Enterprises.

He said: if you left enterprise at the level of Okeke and Sons it would be fine but once others have an interest in the venture crisis was imminent. Even though I had a long argument with him and tried to point to examples contradicting his position I have to admit that the balance of evidence suggests a problem with Joint Stock Enterprises arising from a sense of ownership. It is a subject I would like to elaborate more on and one in which a great job of education needs to be done by emerging groupings like the South East Economic Commission.

I want here to commend the work that Ndi Okereke Onyiuke and her team have been doing to bring the Nigeria Stock Exchange closer to the people in the South East with the Ontisha example.

I still remember Nasir EI-Rufai calling me to say “your people have not been buying shares” in companies being privatized. So work here is to initiate Ndigbo into governance cultures for Joint Stock Companies to enable all become more comfortable with pooling resources to build better capitalized companies that can win the big battles of wealth creation. Such companies have a better chance of succeeding their owners than Okeke services by such bodies as the South East Economic Commission should help achieve a mindset change so values that sustain venturing come into place.

Thank you for listening.

PAT UTOMI

5th December, 2008