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The Fourth Industrial Revolution and digitization will transform Africa into a global powerhouse
Below is Chapter 5 of the Foresight Africa report , which explores six overarching themes that provide opportunities for Africa to overcome its obstacles and spur inclusive growth.
Download the paper to see the contributing viewpoints from high-level policymakers and other Africa experts. The Fourth Industrial Revolution 4IR —characterized by the fusion of the digital, biological, and physical worlds, as well as the growing utilization of new technologies such as artificial intelligence, cloud computing, robotics, 3D printing, the Internet of Things, and advanced wireless technologies, among others—has ushered in a new era of economic disruption with uncertain socio-economic consequences for Africa.
Will this time be different? So far, it does not appear that Africa has yet claimed the 21st century, 2 as it still lags behind in several indicators essential for a successful digital revolution see Figure 5. But artificial intelligence AI and blockchain are also attracting interest in Africa, as they have the potential to successfully address social and economic challenges there.
And there are so many other areas in which 4IR technology can be transformational. In recent years, the ICT sector in Africa has continued to grow, a trend that is likely to continue. Of late, mobile technologies and services have generated 1.
At the same time, institutions must protect the market through consumer protection laws and regulations that encourage competition. 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. 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.
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. For example, with fintech, digitization has gone beyond the financial sector to affect the real sector and households, transforming product designs and business models across market segments.
The government is also migrating to online platforms to conveniently provide public services. Other 4IR technologies are also having impact. For example, in West Africa and Kenya, blockchain has enabled efficient verification of property records and transactions, and expanded access to credit in some previously informal sectors of the economy.
There are also immense opportunities for job creation in Africa. Their consequences can cascade: Increased financial inclusion contributes to greater capital accumulation and investment, hence potential for employment creation. Africa has 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 and Furthermore, as incomes rise across the continent, growing consumer demand for food and beverages will coincide with business-to-business growth in agro-processing.
Ghana-based companies Farmerline and Agrocenta offer farmers mobile and web technology for agricultural advice, weather information, and financial tips. Zenvus, a Nigerian startup, measures and analyzes soil data to help farmers apply the right fertilizer and optimally irrigate farms. African countries face numerous health challenges exacerbated by climate change, limited physical infrastructure, and a lack of qualified professionals.
Mobile technology has become a platform for improving medical data and service delivery: About 27, public health workers in Uganda use a mobile system called mTrac to report 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. Technology has also improved disaster response: During the West African Ebola outbreak in , WhatsApp became an easy method of dispersing information, checking symptoms, and communicating under quarantine.
Illness detection and pharmaceutical production have most immediately benefited from digitization. AI is being slowly implemented in Ethiopia to help medical professionals correctly diagnose cervical cancer and other abnormalities. Clearly, the 4IR presents significant opportunities as well as challenges for Africa.
The key issue for policymakers is how to position their economies to benefit from the 4IR while managing the challenges that it presents. Below are three strategies that leaders should prioritize. Since creating jobs for the burgeoning youth population is a priority in most African countries, many governments are reluctant to support technologies that threaten existing jobs.
Some of the current technologies tend to replace low-skilled workers—of which Africa has an abundance—with higher-skilled workers, constraining participation in the 4IR to economies with relevant skills. As innovation is at the heart of the 4IR, reinforcing state and institutional capacity to drive and support innovation and create an enabling business environment is essential for success. A major regulatory challenge involves increasing cybersecurity. Most African countries lack a comprehensive legal framework and institutional capacity to address cybercrime.
Instead, efforts to prevent cybercrime are appearing at the more local level or are implemented by private sector actors themselves. For example, between and , there was a 73 percent increase in Information Security Management System-certified companies, from in to in , with the majority in South Africa, Nigeria, and Morocco.
At the same time, companies should invest in their employees to develop cybersecurity skills and integrate cyber risk protection in their decision making process. With aligned policies and procedures, the continent can adapt to the rapid changes of the 4IR and leverage it to accelerate participation in global value chains. More broadly, the 4IR can actually empower service delivery, through, for example, national identification and a new generation of biometrics that can centralize data for a variety of uses and users.
Access to advanced technology in Africa is constrained by infrastructure parameters such as lack of electricity and low tele-density, internet density, and broadband penetration.
Other technological bottlenecks include a lack of standardized application programming interfaces and common data languages for the increased integration of largely self-sufficient systems as well as exposure to the dangers of cyberattacks.
Accelerating the physical connectivity of fiber-optic networks as well as the interoperability of virtual platforms is critical not only for upgrading technology on the continent, but also for reaching and lowering unit costs for the underserved. More broadly, adequate infrastructure development will drive and sustain economic transformation in Africa. With lower transport and communication costs, countries with suitable agro-ecological conditions can produce high-value products.
Closing the internet connectivity and access gap with advanced economies will enable more African countries to enter service export markets. Small-scale manufacturers in Africa may also become more competitive with access to digital platforms for research, sales, and distribution.
To make the most of the 4IR, African governments and entrepreneurs need to recognize new niches for industry and leverage them to achieve sustainable, inclusive growth, and take decisive steps to close the gaps in digital skills, infrastructure, and research and development. Editor's Note: Below is Chapter 5 of the Foresight Africa report , which explores six overarching themes that provide opportunities for Africa to overcome its obstacles and spur inclusive growth.
See the summary online: landrysigne. Washington, D. Mobile technologies and services generated 8. It is estimated that one additional technology job creates five new jobs in the local non-tradable sectors. Report Foresight Africa Thursday, January 20, Get global development updates from Brookings. Post was not sent - check your email addresses! Sorry, your blog cannot share posts by email.
7 Things You Didn't Know About Nokia
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