Zhing-zhongs reflect economic creativity

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LOW quality products mainly from China have earned infamy among many Zimbabweans, dismissively and derisively branded with the epithet zhing-zhong. There is an irony about the ignominy heaped upon the so-called zhing-zhongs – the nation that supposedly produces this source of ‘shame’ is rich beyond measure – US$10,355 trillion GDP. It might come as a shock to many to learn that the path of United States’ historical economic prosperity started in Zhing-zhong Avenue. What has been labelled the Asian miracle was birthed in a maternity ward called Zhing-zhong.

The Brett Chulu Column

The roots of the historical prosperity of Asian Tigers are best explained from the perspective of its entrepreneurs. All of them thought like Henry Ford.

The mind of the man Ford: “I will build the car for the great multitude”. Referencing the “great multitude” was Ford’s clever play with words leased from a famous Biblical passage in Revelation 7 pertaining to the great multitude which is said no man could number. Ford waxed lyrically and boldly declared: “But it (car) will be so low in price that no man making a good salary will be unable to own one…” Once upon a time in an era called the Dark Ages it wasn’t allowed to think and express oneself as creatively as Ford did.

No idea could legitimately exist outside the authority of ecclesiastical councils. Along came the Enlightenment, shaking ecclesiastical-controlled Europe at its foundations. It upended the authority of the Church and substituted it with the authority of reason. Thus was born the liberal arts university, a symbol of untethered thinking.

Immigrants of European descent fleeing ecclesiastical-inflicted persecution in the 17th century made liberty the founding principle of the US and an unchallengeable individual right. With liberty, sprang a simple but great innovation: rulers of the land were to be chosen by the people – elective democracy – in essence — a practical application of libertarianism was born. Economics was not spared from the influence of libertarianism.

This wave unchaining minds and markets washed the shores of the thoughts of America’s entrepreneurs. No entrepreneur symbolises with rare clarity the sheer power of liberated thinking in business like Henry Ford. He stands at the intersection of democracy and business. The libertarian genes in Ford whether consciously or subconsciously saw him extending the idea of universal suffrage to business. The mercurial Steve Jobs shared the same genes. He did to electronics what Ford did to the automobile. Without this for-the-great-multitude thinking the Internet and Facebook would be still locked away in the unknown. So would be Coca Cola. Ford didn’t invent the automobile. Before 1908, the automobile was the preserve of the big money club. To Henry Ford, this only-to-the-rich access was just like disenfranchising masses. Ford set himself a challenge to make the automobile accessible to the average American. Ford’s future customers’ only experience resembling driving was riding a horse. He knew that the only way to make a car for every American was to find ways to make the car simple to operate and very affordable. He pursued this task with dogged determination and unleashed the famous Model T. He stumbled upon a meat-processing system where carcasses were moved mechanically. That insight was imported by Ford and sired the assembly line – components would move to workers and not people to parts. A worker concentrated on one task. That shaved off costly labour hours. Ford fortuitously came across an accident- damaged race car from France. He noticed the body was made from a lighter material than he was accustomed to. He later learned it was an alloy called vanadium steel. Andrew Carnegie, that legendary US steelmaker, couldn’t make that kind of steel. Ford decided to make it for himself. Put together, the assembly line and lighter material established a low-cost base for Ford’s great-multitude car. Ford had done to business exactly what the founding patriarchs and matriarchs of the US had done – empowering masses of people to access the right to vote. On May 26, 1927, 19 years after Ford’s first car rolled off the assembly line, the 15 millionth unit came off the Michigan based Highland Park assembly line. In 1908, the US population was 88,71 million.

Here is how the 1908 Ford Model T performed: No ignition. You started the car with a hand crank in the front of the car. To take the car over a steep ascent, you had to drive in reverse. Top speed was an ungenerous 72km/hr. It is said that if the levers of the car were not set correctly the machine would spin in reverse, risking a potential fracture to the operator. It’s said the fracture was so common that doctors called it the Ford fracture. The sum of the matter: Ford made a zhing-zhong. The point that many who ridicule Chinese products miss is that zhing-zhongs follow Ford’s Model T innovation blueprint – simplicity and affordability calculated to pull in what we may call the economically-disenfranchised great multitudes. Ford turned non-consumption into consumption. That’s exactly how Japanese entrepreneurs such as Akio Morita of the Sony fame – the guy who gave us the Walkman – made Japan an economic juggernaut.

Japan’s entrepreneurs in diverse industries started out by making small stuff for small people, turning non-consumption into consumption. These products then sought to fight non-consumption located beyond Japan’s borders – ushering Japan’s sunshine years of massive export-led growth. Japan’s gargantuan economic growth rates of yesteryear that once breached 9% rhymed in sympathy with serial overseas victories won against non-consumption by Japanese products. Toyota did not enter America with the Lexus. It made small cars for small people which General Motors (GM) was not interested in. GM didn’t care: Toyota was making zhing-zhongs that didn’t interest big money.

Toyota quietly perfected its art of making cars cheaply and took that permanent cost advantage upmarket, making better zhing-zhongs, hounding out existing manufacturers from market tiers lying just above the vanguished ones.

Similarly, other Japanese manufacturers replicated Toyota’s typical victories. Japan’s manufacturers used this zhing-zhong trick many times over in industry after industry. As long as Japanese firms could pull this low-cost trick in overseas markets, its economy grew as if it were on steroids.

Then the party stopped. They were no more upmarket tiers to colonise. Japanese’s massive growth rates tanked. It was Taiwan and South Korea’s turn to assume the mantle of one-trick pony. Enter China – another one-trick pony.
China did no more than Henry Ford did. Ford liberated masses from the disease called non-consumption using the assembly line coupled with design simplicity as his lever to engineer the inescapable low-cost low imperative. The Chinese turned their own version of power-to-the-great-multitude thinking on ultra-low labour costs to create decent wealth for its people. Power-to-the-great-multitude: Isn’t it ironic that the Chinese are achieving what nominal democracies are failing to deliver?

Zimbabwe can never be an African tiger as long as we miss the point that late-comers must zhing-zhong their way to prosperity. Where are Zimbabwe’s Fords? Dzingai Mutumbuka was in the right direction. He was not in business, unfortunately.

Chulu is a management consultant and classic grounded theory researcher. He has published research in an international peer reviewed academic journal. — brettchulu@consultant.com

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