In my last post, I gave you a brief but adequate introduction to the fourth industrial revolution. Today I am going to take it further and tell you what transformational potential it carries along with it for us as a country and the African continent. Well, let me start by acknowledging a fact we all know; Africa was in the dark during the previous revolutions, and thus participated in none. Will things be different this time round? Only time will tell. So far, the region still lags behind in several indicators essential for a successful digital revolution. This is according to the 2017 International Telecommunications Union’s Information and Communication Technology Development Index (IDI Index) conceptual framework and methodology. That said, we should not allow ourselves to be sidelined yet again, and if we don’t, below are several ways the revolution is going to transform our society.
Modernizing agriculture and agro-industries
Africa is yet to harness the full potential of its agricultural sector, and 4IR technologies provide an opportunity to do so. Farming alone accounts for 60 percent of total employment in sub-Saharan Africa, and the food system is projected to add more jobs than the rest of the economy between 2010 and 2025. Information on competitive pricing, monitored crop information, disease prevention tips, and disaster mitigation support has the potential to transform the agriculture sector to improve income, production, and demand throughout the continent. Furthermore, as incomes rise across the continent, growing consumer demand for food and beverages will coincide with business-to-business growth in agro-processing.
Encouraging economic growth and structural transformation
In recent years, the ICT sector in Africa has continued to grow, a trend that is likely to continue. According to a 2019 report by the GSM association (The Mobile Economy: Sub-Saharan Africa 2019: GSM Association, 2019), mobile technologies and services have generated 1.7 million direct jobs (both formal and informal), contributed to $144 billion of economic value (8.5 percent of the GDP of sub-Saharan Africa), and contributed $15.6 billion to the public sector through taxation. Digitization has also resolved information asymmetry problems in the financial system and labor market, thus increasing efficiency, certainty, and security in an environment where information flow is critical for economic growth and job creation. Failure to recognize and capitalize on 4IR opportunities, conversely, will impose considerable risks on African stakeholders.
“Without attempts to move beyond existing models of innovation, entrepreneurship, and digital growth on the continent, African businesses risk falling further behind, exacerbating the global “digital divide” and lowering their global competitiveness” – Rosanna Chan in her paper ‘Rethinking African growth and service delivery: Technology as a catalyst.’
Going beyond the existing models requires discipline in governance to allow an endogenous innovative environment. At the same time, institutions must protect the market through consumer protection laws and regulations that encourage competition.
Increasing financial services and investment
Digitization has impacted economic growth through inclusive finance, enabling the unbanked to enter formality through retail electronic payments platforms and virtual savings and credit supply technological platforms. More broadly, digitization is enabling entrepreneurs and businesses to rethink business models that are more impactful, sustainable, and connected to other sectors of the economy. For example, with fintech, digitization has gone beyond the financial sector to affect the real estate sector and households, transforming product designs and business models across market segments. Businesses are able to design products and trade online, and individuals are able to operate financial services and payments for shopping and investments. The government is also migrating to online platforms to conveniently provide public services.
Reinventing labor, skills, and production
According to Jean Phibert Nsengimana in his paper “How Africa Wins the 4th Industrial Revolution,” published on Forbes on October 10, 2018, by 2030, Africa’s potential workforce will be among the world’s largest, and so, paired with the needed infrastructure and skills for innovation and technology use, the 4IR represents a massive opportunity for growth. Indeed, the 4IR is dramatically changing global systems of labor and production, requiring that job seekers cultivate the skills and capabilities necessary for adapting rapidly to the needs of African firms and automation more broadly. Already, Africa’s working population is becoming better educated and prepared to seize the opportunities provided by the 4IR: For instance, according to the The Global Human Capital Report 2017 by the World Economic Forum, the share of workers with at least a secondary education is set to increase from 36 percent in 2010 to 52 percent in 2030.
Fighting poverty and inequality
The spread of digital technologies can empower the poor with access to information, job opportunities, and services that improve their standard of living. AI, the Internet of Things (IoT), and blockchain can enhance opportunities for data gathering and analysis for more targeted and effective poverty reduction strategies. Already, we have witnessed the transformational power of formal financial services through mobile phones such as M-Pesa reaching the underserved, including women, who are important drivers for sustainable poverty eradication. These financial services allow households to save in secure instruments to enlarge their asset base and escape cycles of poverty.
Improving health care and human capital
African countries face numerous health challenges exacerbated by climate change, limited physical infrastructure, and a lack of qualified professionals. 4IR technologies can help mitigate these threats and build sustainable health care systems, especially in fragile states. For instance, mobile technology has become a platform for improving medical data and service delivery: According to a report by Access to Medicine Foundation (Access to Medicine Index 2016) About 27,000 public health workers in Uganda use a mobile system called mTrac to renew medicine stocks. The SMS for Life program, a public-private partnership, reduces medicine shortages in primary health care facilities by using mobile phones to track and manage stocks levels of malaria treatments and other essential drugs. Rwanda became the first country to incorporate drones into its health care system, using autonomous air vehicles to deliver blood transfusions to remote regions. In Ethiopia, AI is being slowly implemented to help medical professionals correctly diagnose cervical cancer and other abnormalities.