Africa should innovate to grow

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African governments should be proactive in adopting new technologies.

By FRANCOIS VAN DYK

Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), believes that the world is in a massive change which he explores in his book, The Fourth Industrial Revolution. This fourth revolution follows on the digital revolution which started in the 1980’s. Though this digital revolution is still ongoing, Schwab sees new emerging technologies such as the internet of things (IoT), Artificial Intelligence, 3D printing and others as fundamentally changing how people interact with each other, technology and even the environment.

David Meads, President of Cisco Africa, commented in the runup to the WEF held in May 2017 in Durban South Africa that “The Fourth Industrial Revolution is synonymous with uncharted growth in digitisation and internet connectivity. It has the potential to drive Africa forward like never before, enabling innovation, spurring new business models and improving the delivery of public services.”

For Africa to benefit from opportunities being afforded by this new technological age, it will need to move quickly – particularly from an infrastructure perspective with stable energy supply and broadband infrastructure. Issues such as political stability, rule of law, quality regulation and standards will be crucial particularly to the manufacturing industry.

Ross Harvey, a Senior Researcher in the Governance of Africa’s Resources Programme at SAIIA, believes that “African governments should be proactive in adopting new technologies. To do so, they must stand firm against potential political losers who form barriers to economic development. It pays – in the long-run – to craft inclusive institutions that promote widespread innovation.”

Though Africa has generally lagged the rest of the world from a manufacturing perspective, the disruption created by the fourth industrial revolution is levelling the playing field with traditional powerhouses being overtaken by newer and more efficient businesses. Just think Uber, Air BnB, and others, that have disrupted traditional industries despite not owning vehicles or hotels.

The agenda to move forward

Africa has had to be very innovative in the past due to a lack of certain opportunities – for instance the rapid adoption of mobile due to limited fixed infrastructure and mobile payments (M-Pesa).

In 2015, the African Union adopted “Agenda 2063” as the continent’s new long-term vision for the next 50 years. It identifies seven aspirations required to grow and improve the continent:

• A prosperous Africa based on inclusive growth and sustainable development

• An integrated continent, politically united based on the ideals of Pan Africanism and the vision of Africa’s Renaissance

• An Africa of good governance, democracy, respect for human rights, justice and the rule of law

• A peaceful and secure Africa

• An Africa with a strong cultural identity, common heritage, values and ethics

• An Africa, whose development is people-driven, relying on the potential of African people, especially its women and youth, and caring for children

• Africa as a strong, united, resilient and influential global player and partner

This is certainly a grand and beautiful vision but as always the best plan not implemented is more useless than a bad plan that is actioned. Africa will certainly need to start doing things differently should it wish to see different results.

Research by the McKinsey Global Institute published in 2016 identified six sectors which could unlock high growth and profitability – wholesale and retail, food and agricultural production, health care, financial services, light manufacturing, and construction. The research estimates that just in manufacturing the continent could double its output from USD500 billion to USD930 billion by 2025, with the majority of products destined for local consumption – currently Africa imports up to 33 per cent of its food, drinks and other processed goods.

But it is crucial that producers implement what some have dubbed Manufacturing 2.0 – where the latest internet technologies and applications made available by the Fourth Industrial Revolution, are integrated with traditional manufacturing processes. Business processes and efficiencies can be greatly improved – both internally and with clients and suppliers.

Effective use of data

Dr Tuan Nguyen, Senior Business Consultant at the Apriso Corporation, believes that big data will be crucial for “The factory of the Future”.

“One of the requirements of Manufacturing 2.0 will be to provide a unified, standardized approach to data. This way machines, systems and people can communicate effectively and accurately with each other to perform analyses and comparisons within and across plants and regions. The challenge will be to harness the nearly endless big data that will be available, and respond in real-time so that everyone can make better business decisions.”

Though the Fourth Industrial Revolution certainly enables astounding opportunities, there are great inherent threats as well. Much has been said about the possible decimation of jobs that automation, Artificial Intelligence, 3D printing and new technologies will bring – proving to be more efficient and cost-effective than human labour. Manufacturing in the United States has shed 20 per cent of jobs since the beginning of this century while increasing outputs by up to 30 per cent.

However, many argue that the employment landscape will need to evolve just as it has done for centuries. Some of the world’s most valuable companies (and even whole industries) did not exist 20 years ago – think Google and Facebook.

Africa’s response to this revolution is key. Leaders in government and business will need to develop and drive policies that will enable Africans to prepare, participate and even shape the future of this new technological age. GSMA Ecosystem Accelerator research estimates that there are currently just over 300 technology and innovation hubs in Africa. Though this is an increase over previous years, more investment is required – particularly by government.

Infrastructure and education will need a major overhaul as it will no longer be good enough to just read and write or even study a university degree – which may be redundant by the time it is completed.

The writer heads up Operations at Ornico, the Pan-African Brand Intelligence research company. He worked in public relations before entering the world of media research.

Email: francoisv@ornicogroup.co.za

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