Digital disruption in Africa

Posted on December 29, 2016 12:17 am

Africa is home to the world’s second highest unemployed population after Asia and with digital disruption, that situation is likely to worsen as it has the potential to threaten more than 45 per cent of jobs that currently exists in the continent over the next 10 years as automation and machine learning shake up the economy.African governments and regulators need to prepare for changing times as disruption moves.Developing disruptive technologies of machine intelligence and automation will gradually change economies. There’s little doubt that in many sectors of African economy there will be dislocation of labour and dislocation of capital. It’s not just a cost to employees, it will be a cost to certain businesses as well. Despite a new era of hyper-connected technology and big data, some of the early fears about humans being replaced by machines were overstated.The majority of jobs in African economies today are services kind of jobs and that requires some form of human interface. So simply saying that Africans have automated or can automate something doesn’t mean to say it will be readily acceptable to consumers.While smart technology will inevitably replace humans, especially in manufacturing, Africa’s social safety net could be critical.African countries have an important social safety net and maintaining that will be essential for the purposes of people who will have their lives disrupted as a consequence of this.The era of digital disruption will also be a challenge for governments and regulators. Digital disruptions will also move African countries forward by creating opportunities for the technology industry as well as creating more room for tech start-ups, especially those providing financial technology.

A good number of businesses in Africa are embarking on their digital-transformation journeys and many more are expected to do so. They are adopting and deploying digital technologies including cloud, the Internet of Things and cybersecurity to improve business efficiency and productivity, enhance the customer experience, and innovate new products, services and business models. African countries like Kenya, Nigeria and South Africa are implementing policies that will give rise to new opportunities for businesses throughout the value chain in the information and communications technology industry and unlock an innovation-driven economies. For example, Kenya aims to develop a high value-added economy by transforming existing old school manufacturing to smart manufacturing, old school small and medium-sized enterprises to smart enterprises, and old school services to high-value services, will tap into digital technologies, including the Internet of Things, cloud and big-data analytics, to nurture smart, secure and connected communities that are innovative, forward-thinking and well equipped to stay at the forefront of the competition. Digital disruption has the potential to overturn incumbent businesses and reshape markets faster than anything African countries have witnessed so far. Approximately six of today’s top 10 incumbents in each industry in Africa will be displaced by digital disruption by 2020. The technology, media and entertainment, retail, and financial services industries have already been particularly disrupted by digitisation.In Kenya, for example, the chain supermarket brand Nakumatt who management failed to embrace digitisation, are facing huge debts as result of ignoring technology. Digitisation will also bring about opportunities for businesses.

Between 2017 and 2020, there will be US$25 billion worth of economic value that can be derived from digital technologies in Africa’s private sector according to a research published earlier this year by an American company that centred on African market. Cloud, big-data analytics, and Internet of Things are key technologies that will play vital roles in many organisations’ digital-transformation strategy and help them innovate new products and services and enable disruptive new business models. Your blogger is one of those who believes that the disruptive force of technologies such as cloud and artificial intelligence will make it necessary for individuals and businesses in Africa to think and operate like a digital company regardless of the industry they operate in. Enterprises and organisations across Africa are adopting cloud technologies and services as they enable agility, cost-efficiency and ability to deploy next-generation IT services in meeting with business opportunities and challenges.African region is in a unique position to lead in this cloud revolution as it contains many diverse markets with dynamic growth, where information technology takes centre stage in transforming economies and societies. Technological advances in African will continue to alter the financial landscape, particularly in terms of channels and modes of transactions.The whole start up ecosystem in African countries are coming up because of 4G and the rise of the smartphone, since the smartphone together with 4G is basically the first computer for most of the people in Africa. Bottom line is that digital economy in Africa is rising because of this and those who will ignore it, will be swept into oblivion.

Contador Harrison