What is a logistics centred economy? Jamaica is on to something
Vision is the art of seeing what is invisible to others. – Jonathan Swift
Logistics Centred Economy
A logistics centred economy simply defined is an economy based on logistics. Click To TweetYes, I know its a bit of a circular definition and I can see my teachers all the way from high school to university shaking their heads in disappointment that I still have not learnt that one ought not to define a thing using the very thing you are seeking to define.
Now having committed that tautological sin let me try again: a logistics centered economy in its most basic form is an economy based on the use of logistics to enhance efficiency and competitiveness at both the micro and macro-economic level.
Better?
Ok, let me try again: it is the efficient organization and management of the flow of materials, people, financial resources, and data involved in production, distribution, and consumption of goods and services inside of a country.
Interrelated networks
Connectivity is the key to competitiveness
A logistics centred economy consists of a variety of interrelated networks of both hard and soft infrastructure developed by the public and private sector. These networks include various types of transport, informational channels and systems, means of communication and locomotion, storage facilities, external provision of energy resources, financial systems, supply arrangements, logistics processes, service companies, etc. In a logistics centered economy stakeholders, primarily businesses, efficiently manage the movements of goods and services along the production or service delivery supply/value chain and continuously adjust themselves to new challenges and opportunities of a globalized world.
Jamaica
The Government of Jamaica has embarked on an ambitious long term programme to transform Jamaica in to a Logistics Centred Economy. The transformational process of developing a Logistics Centred Economy will force Jamaican policy makers and businesses alike to look at the entire global manufacturing and service delivery supply and value chain. From the conceptualization of ideas to research & development to production, all the way through to consumption and with greater emphasis being placed on being sustainable, now all the way to recycling, Jamaica, is being re-positioned as a platform to attract a variety of firms seeking to add value along these chain of activities.
Why Logistics?
“Improving logistics performance is at the core of the economic growth and competitiveness agenda. Policymakers globally recognize the logistics sector as one of their key pillars for development. Trade powerhouses in Europe like the Netherlands or in developing counties like Vietnam and Indonesia see seamless sustainable logistics as an engine of growth and of integration with global value chains.” – The Logistics Performance Index 2014.
Jamaica’s Model
The model of Jamaica’s Logistics Centred Economy is based on adopting and adapting global best practices with a view of optimizing Jamaica’s existing assets to realize their full potential and create new opportunities and benefits. As such, the Government of Jamaica has examined what has and has not worked for other countries, particularly the Netherlands (Rotterdam), the United Arab Emirates (Dubai) and Singapore as guidelines for constructing a vision and the development and execution of an implementation plan. Moreover, the model of Jamaica’s Logistics Centered Economy takes note of the lessons learned from other countries but firmly factors in Jamaica’s social, economic and political development. Moreover, Jamaica’s Logistics Centred Economic model is not static but dynamic and adapts itself to change.
Geo-strategic Location + Natural Endowments + Existing Assets (green and brown field) + Human Resources + Global Trade/Logistics Trends + Value Added Clusters (eg. Special Economic Zones) + Globally Integrated Businesses (especially small local businesses) + International Economic Engagement = Jamaica’s Logistics Centred Economy
Is it only about the logistics industry?
It is important to note that while it is call a logistics cented economy, it is not only about the logistics industry – the business of managing the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations. The industry, be it shipping, to picking and packing to packaging and labeling, is the glue that keeps the various interrelated networks connected together. This is why:
Logistics services has become critical for competitiveness. Better logistics performance is strongly associated with trade expansion, export diversification, ability to attract foreign direct investment and economic growth.” – Trade Dimensions of Logistics services: A Proposal for Trade Agreements
However, the logistics services industry is one of derived demand, that is to say it supports other industries eg. manufacturing. Therefore, the short answer to the question: is it all about the logistics industry? is no – it is not all about the logistics industry but it is all about logistics.
Logistics itself is everywhere, no matter the industry and having an economy based around its fundamental principle of efficiency is a winning formula for transformational economic development.
After-all what is logistics but the ease and speed of doing business or anything for that matter.
Waht are the challenges in the transition from an agrarian centered Colonial Economy, to a Tourism/Bauxite Centered Economy to the current shift to a Logistics Centered Economy?
Thanks for your question Byron. There are many challenges, too many to get into here. However, none of them are insurmountable is the most important point. The shift to a logistics centred economy is a long and hard road but one which is worth us doing. One of the biggest obstacles we need to overcome is a set of mindset shifts. It sounds a bit pie in the sky but simply believing that it is possible is the biggest one. Another one is crime, including its root causes and perceptions. The third is overcoming entrenched interests and having them come to the realization that the logistics centred economy is not about how to divide the pie but to grow the pie. There are of course the usual suspects of policies, laws, education and infrastructure but I tend to cover those in other posts not just so much as obstacles but as challenges that lead to opportunities.