Interview: Hichem Elloumi

How can the government and private companies support the development of Industry 4.0?

HICHEM ELLOUMI: In a constantly evolving world, the only companies to successfully achieve sustainable growth will be those that pursue continuous technological improvement, as well as those that evolve their processes and products to meet market demand. To this end, the Tunisian government has announced the launching of a programme to aid companies in their transition toward Industry 4.0. The plan is similar to the national Upgrade Programme (Programme de Mise à Niveau, PMN) that was introduced in the late 1990s to help firms build their competitive advantage following the signing of economic cooperation agreements with the EU. As a result of the PMN, Tunisia became the second-largest industrial products exporter to the EU of all countries south of the Mediterranean Sea. Industry 4.0 brings similar promises by allowing companies to regain competitiveness by adding technology and innovation. In fact, several companies have already integrated such advancements into their business plans, though the programme’s pilot phase is slated to officially start at the end of 2019. The pace at which Industry 4.0 develops, however, will depend on the programme’s timing as well as the commitment of companies involved.

Which assets can Tunisia leverage to bolster its research and development (R&D) activities?

ELLOUMI: Investors have discovered that Tunisia has more to offer than low labour costs. We have high-quality human resources, whose skills cover a wide variety of areas. As a result, a number of investors chose to establish design, engineering and research centres in Tunisia. In fact, several technology parks and innovation clusters have emerged, some of which have a sector-specific focus and others that focus on multiple sectors. Automotive parts manufacturers have set up activities in the El Ghazala Technology Park for IT research purposes, while R&D on agriculture and agribusiness is being conducted at the Bizerte Economic Activities Park. Moreover, Tunisian companies, especially those focused on exports, have developed the ability to manufacture technical products with higher added value than previously thought. Considering that the growth of industrial companies equates to better performance, competitiveness, quality and innovation, we recognise the need for additional efforts, and R&D is widely supported and incentivised. The most recent Investment Law is aimed at organisations that are transitioning towards higher value-added activities.

What can be done to facilitate the internationalisation of Tunisian companies?

ELLOUMI: Considering that the domestic market is small, internationalisation is a necessity. A growing number of Tunisian firms have started establishing a direct presence abroad, most notably in North and West African countries. Setting up a footprint abroad gives companies access to a larger market and greater logistics capabilities. However, as such companies compete on a global scale, they need to be as advanced as their counterparts from more developed markets. Unfortunately, government regulations hinder companies from developing while abroad, because they restrict investments in foreign currency. More specifically, the Central Bank of Tunisia imposes a banking limit to investing abroad, above which authorisation from the governor is required. Revising that regulation in a manner that facilitates investment will likely help Tunisia-based companies develop more of a global presence. Additionally, creating incentives for firms with operations outside of the country could help; the same way the law established in 1972 gave remarkable advantages to Tunisia-based exporters. Lastly, although Tunisia has established investment offices in a number of different countries, they focus more on bringing foreign investment into Tunisia rather than supporting the internationalisation of Tunisian companies.