This thesis investigates Botswana’s vision to become a downstream player in the global diamond industry by creating downstream capabilities that can continue to benefit the country when diamond mining is no longer profitable. Botswana is the largest producer of diamonds, accounting for a quarter of the world’s diamond production by value. The government has used diamond revenues to foster economic growth. The diamond-led growth has however resulted in a largely undiversified economy with limited job creation. Furthermore, the country’s diamond-led growth is not sustainable, with resource depletion expected to take place in the next two decades. In response to these economic challenges, the government used its supply dominance to force downstream linkages in the diamond industry. As a result the country has 21 diamond cutting and polishing firms that employ over 3000 workers, representing a tenth of employment in the manufacturing sector.
The research examines how efficiently human capital formation in Botswana’s diamond cutting and polishing industry is taking place in order to create downstream capabilities that can foster the industry’s competitiveness. This is done by examining the role of the education and vocational training system, industry training institutes and the firms themselves in creating the human capital required in the diamond cutting and polishing industry. This research also considers the impact of technological change on the industry’s human capital requirements. The education and vocational training system was found to meet the industry’s basic general human capital requirements. But due to the 2embryotic institutional training in the industry, the firms were found to be making investments in both industry- and firm-specific human capital. The research argues that institutional industry training needs to be strengthened, particularly in light of technological changes that may result in more industry-specific human capital requirements in the Botswana’s diamond cutting and polishing industry
