Ndubuisi Ekekwe, a distinguished Nigerian entrepreneur, inventor, and the guiding force behind Tekedia Capital, has put forth a compelling argument. He posits that Nigeria’s ascension to the next echelon of development is contingent upon the foundational work of traditional business powerhouses like Dangote Cement and BUA Foods.
In his recent thought-provoking article, sparked by the news of Japan’s Nippon Steel’s acquisition of US Steel for a staggering $14.1 billion, Ndubuisi delves into the dynamics of economic transformation and the concept of ‘accelerating destruction’.
His article, aptly titled ‘What Nigeria, Africa can learn as US Steel Becomes Japanese On Accelerating Destruction and Economic Transformation’, underscores the crucial role of established companies in paving the way for the growth and success of emerging firms.
He writes, “When you read about the men who built America, this company has a “chapter”. When the United States overtook the United Kingdom at the end of the 1890s, the Americans wanted a pillar upon which they could scale a virtuoso industrialization vision. Two men – JP Morgan (the banker) and Andrew Carnegie (the industralist) – decided in 1901 to establish US Steel. Simply, US Steel was a fulcrum of America’s 20th century economic dominance.
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“By 1917, the largest publicly traded company in the United States was US Steel. It was also the largest company in the world by market cap. Of course, its success began to change its relevance. Yes, fifty years later, in 1967, the largest recorded company in the US was IBM. Later, it was GE in the early 1980s. Today, we have knowledge companies like Apple and Microsoft running the show.
“In all these cases, we can learn of one thing: accelerating destruction. Simply, generations of companies prepare nations for the next phase, and if they succeed, most times, they fade in relevance. When US Steel powered America, its success produced infrastructure companies like IBM and Intel which then provided automation and computing capabilities for GE across industries. GE organized America in many ways, seeding pillars which enabled modern knowledge firms like Apple and Microsoft to blossom. The next generation of largest American companies will feed on the success of Google, Microsoft and Apple. I posit that native and new species of AI companies will rule the markets by 2050.
“Bringing it home to Nigeria: Nigeria will not transmute to the next level until companies like Dangote Cement, BUA Foods, or new ones (our US Steel), and Glo, MTN, or new ones (our IBM, GE) have done their foundational jobs. Upon their catalytic pillars would Nigeria build a construct for shared prosperity [no leap-frogging here]. But since they have not gotten the job done, they remain. But if they excel, one day they will fade like US Steel, which has done its job and can now retire to Japan!”
This insightful piece serves as a reminder of the cyclical nature of economic dominance and the inevitable evolution of industry leaders. It also highlights the critical role of foundational companies in shaping the future of a nation’s economy.