By Sheila Moorcroft
Africa is growing – economically, in terms of population, and more importantly in terms of investment and market opportunities. Investments in internet and mobile technologies are critical to enabling that growth and these are growing too. Some are also suggesting that Africa could leapfrog other markets and jump straight to the cognitive computing era, enabled by the latest technologies and rapid expansion of big data, which would be a real game changer not just in Africa, but world-wide.
What is changing?
Many African economies have been growing faster than the rest of the world in recent years, and average growth in Sub Saharan Africa is expected to continue at about 5% per annum. Investment in infrastructure, especially mobile phone and internet infrastructures, is enabling much of that growth. One estimate says that every 10 new mobile subscribers per 100 of the population result in 0.5% added to GDP.
The investment is significant, but is still not enough. Major sub-sea high-speed cables now pretty well surround Africa. The first came in about 2009, when Kenya made a major investment to link to the United Arab Emirates. Then came the west coast and east coast and WACS cables. There are also plans to create a BRICs cable to link Brazil Russia, India, South Africa and China. In addition, there are now two, soon to be three in 2015, Hylas satellites to supply internet to rural areas and to expand capacity overall.
The enabling factor can perhaps best be seen in the growth of tech hubs – providing spaces and places for entrepreneurs to get business advice on how to scale up ideas, have access to technology, develop skills. Nairobi is in the lead again here, with no fewer than 6 all told – and the endorsement of Google’s Eric Schmidt seeing the city as the future tech centre for Africa. But they are growing elsewhere too: in the middle of 2012 there were about 50 in 20 countries; there are now about 90, and rising. Again, riding on the back of internet speed and capacity, there are plans to create virtual tech hubs to take them out into rural areas, where distances simply continue to make cable laying unviable.
Why is this important?
More and more companies regard good, secure information technology infrastructure as an essential to other investments – whatever the sector. Information technology investment is set to grow, providing continued impetus for growth and new opportunities. IBM is leading the field with a presence in no fewer than 20 countries; the company has also just opened its twelfth global research centre – in Kenya. Its previous new research centres – in India in 1998 and China in 1995 – took about 10 years to make a major return on the investment; some people hope that the Kenya centre will provide similar rewards within 5 years. But IBM is not alone; many other major western as well as African IT companies are investing hard.
And that return on investment is needed. Africa has a young, increasingly tech savvy population as mobile phones continue to grow fast – 500 million in 2012, and increasingly go from basic to smart. Reliable access and cheaper internet services are needed to meet growing demand not just from consumers but to enable agriculture, education, oil and energy exploration, brings work to remote areas, provide banking services – and entrepreneurs. One such is the founder of Snapplify – a digital publishing / apps development platform, which is not only growing fast in Africa, but also gaining clients the world over. Raising another possibility: more ‘reverse innovation’ as African entrepreneurs venture abroad. Although skills overall remain an issue, that too is changing. Africa’s young population is becoming more educated. Whereas in 2002 only about 32% of the population went on to secondary and tertiary education; estimates forecast that will rise to 48% by 2020, bringing more skills but also greater expectations. By 2050, it will have the world’s largest workforce.
Africa is a tech enabled market waiting to happen, or perhaps better said – already happening for those willing to invest. Some are suggesting that Africa could leapfrog straight to big data enabled cognitive computing, where computers interact and respond more like humans than giant calculators. And that really would mobilise Africa into a real game changer.
Please also see previous Trend Alerts Africa ready for lift off and Africa – Perceptions changing.