Big shifts that can help Africa leapfrog

Africa’s developmental challenges are intimidating but emerging technologies can trigger big shifts to help the continent leapfrog and combat those challenges. Our analysis of emerging technology-led innovations helped us discern trends that point towards what these big shifts might look like for Africa. We are encouraged to find that the seeds for these shifts have already been sown. Change has already begun and Africa needs to gear up and make the most of it.

SHIFT 1: From Digital Divide to Digital Bridge

As we move towards the middle of the 21st century, emerging technologies will once and for all close the digital divide that governments, private sector, and entrepreneurs have tried to address for so long. The pace at which technology is spreading and breakthrough innovations are unfolding offers new potential for leapfrogging in Africa, overcoming barriers of making internet connectivity available across the continent without a differentiation between urban and rural areas or socio-economic and demographic groups. In the next years, technologies will allow us to democratize connectivity, access to technology, and capabilities.

Closing the infrastructure divide: Democratizing connectivity

75% of Africans lack access to affordable internet today, but rapid change is underway, just like the mobile revolution triggered mobile phone penetration to jump from 1% in 2000 in Africa to 73% in 2016. Today, this figure is over 100% in countries such as Tunisia, Morocco and Ghana. By 2020, Africa will have over 700 million smartphone connections. New entrants into the connectivity game are changing the competitive landscape, working towards making connectivity available to the unconnected masses.

In the short run, small scale, off-grid solar power systems such as the one developed by BuffaloGrid, have great potential to leapfrog the need for grid expansion by providing off-grid internet access, using solar power. Kenya-based BRCK provides a hardware solution that facilitates connectivity in remote settings. Across the globe, startups are beginning to create decentralized solutions that can cut out middlemen and allow peer-to-peer connectivity, matchmaking between end-users and connectivity providers and selling of access internet capacity.

In the medium to long term, aerial infrastructure innovations and drone-based internet such as Google’s Project Loon, and Facebook’s Internet.org and SpaceX are solutions in process to bridge the connectivity gap. Expected to be commercialized in 2017, Project Loon provides internet through a network of high altitude balloons. Each balloon provides internet coverage to an area of 80km in diameter. Mesh networks have the potential to offer a more secure and stable network connection and innovators like goTenna Mesh, Tuse and Village Telco have started to provide connectivity using mesh networks.

Such technology innovations paired with government action will boost connectivity at affordable prices. Countries like Rwanda are leading the way, ranking as highest Low Development Country in this year’s Affordability Drivers Index. Its success is partly due to enabling policies such as the SMART Rwanda Master Plan 2015-2020, putting information and communication technology – especially broadband – at the heart of the national development agenda.

Closing the user divide: Democratizing information and opportunities

Making use of digital technology is no longer a privilege of the “top of the pyramid” but increasingly has a value proposition for Africa’s “Base of the Pyramid”. Encouraged by the success of M-PESA, innovators are figuring out how to deliver real value to low income consumers, embedding digital technologies into devices that BoP-consumers use in their daily lives and making technology as a “means to an end” rather than an end in itself. Businesses have in the past years succeeded in creating consumer touch points using the mobile phone, disrupting distance, speed, and cost of delivering products and services. Today, the usage of mobile phones to access information and basic services is higher in low income segments than in top tier segments of society—and this success story can be repeated.

In the short term, bots replace the need for an abstract user interface and provide a natural means of communication. Chat bots are enabling communication with technology and reducing the barrier to usage, especially when it comes to providing support in the native language. SMS-based bots such as Agri8 in Kenya, use machine learning principles to make it easier for farmers to access and navigate agricultural information platforms. Emerging technologies such as AI will act as enablers in the back-end, providing the information, opportunities or services that people need: financial products, water, energy, education, healthcare services or information for example in areas such as agriculture or climate.

In the medium to long term, emerging technologies and smarter devices allow us to make high tech truly inclusive for base of the pyramid consumers: Conversational applications enabled through AI will enable consumers to do basically anything with the help of tech – not relying on high tech skills or literacy. Technology will enable users to communicate directly with computers without the need for a screen. Multimodal communication leveraging eye-tracking, gestures or voice technology will help overcome the literacy challenge.

Closing the skill divide: Democratizing capabilities

Given the speed at which technology develops, adaptability and skill development matter in order to prevent the development of a two tiered society of tech savvy users and excluded non-users. To prepare for the change, Africans can take advantage of new forms of learning and skill building. In the medium to long-term an increasing number of products and services will be digitized, demonetized, and democratized – increasingly removing the intermediary and shifting responsibility to the individual. With this newly won empowerment, there is a need to prepare the individual: Learnability, problem solving and ability to interpret information are key in the new age, where data and knowledge is easily accessible. 

Just as emerging technologies enable access, they enable skilling and provision of need-based, customized, and contextual training delivered through videos, text, games and other mediums, independent of centralized educational institutions. While MOOC-enabled distance education has been around for some time, the near-term future lies in a combination of ‘education on your fingertips’ through formats such as nanodegrees and other ‘just in time interventions’. In the medium to long-term more engaging virtual reality-enabled class room education will prepare Africans to solve local problems independent of their location. The locational barrier is already being overcome by companies like Unimersiv, zSpace and nearpod. In the long-run emerging technologies will help create a future-ready generation that bridges the digital divide through skills acquired remotely.

The number of unique mobile subscribers is forecast to reach 725 million by 2020, translating to 54% of the expected population in that year (Source: GSMA)
Africa’s e-learning market has doubled from 2011 to 2016, reaching USD 513 million, according to a report by market researchers Ambient Insights. South Africa is Africa’s largest e-learning market, along with Angola, Nigeria, and Tunisia. Meanwhile, Senegal, Kenya, Zambia, and Zimbabwe are posting and annual e-learning market growth rate of 25% (Source Ambient Insights)
The global Artificial Intelligence market was valued at USD 126.24 Billion in 2015 and is forecast to grow at a CAGR of 36.1% from 2016 to 2024 to reach a value of USD 3,061.35 billion.

SHIFT 2: From a Wasteful to a Circular Economy

Globally and in Africa, emerging technologies like IoT, Big Data, 3D Printing and Blockchain will be at the heart of a shift from the traditional linear and wasteful ‘take-make-dispose’ economic model towards a circular economy which is restorative and regenerative by design. Globally, the circular economy opportunity is estimated to be worth USD 4.5 trillion by 2030. The combination of circular economy benefits with the ability of emerging technologies to create exponential change harbors greatest potential in Africa given the grand challenges the continent needs to overcome including those associated with shortage of food, water and energy. Emerging technologies will play a critical role in supporting and scaling new circular economy business models that promise to catapult the continent towards the new age of industrialization. The virtuous and dynamic fusion of circular economy principles and technologies will manifest in the form of better design and utilization of assets, optimization and reduction of inputs and localization of production.

Better asset utilization and design

As ‘things’ become more and more intelligent they will generate volumes of rich granular data on run time. Cisco predicts the number of IoT devices to increase to 500 billion by 2030 and the total volume of data generated by IoT devices to rise to 600 ZB per year by 2020. Like in other countries, advancements in sensors, software, microprocessors and connectivity will also vastly enhance data storage and exchange in Africa. This will allow optimization of usage of connected objects and devices and also inform the design of more effective and durable products in the future. Tech-enabled enterprises in Africa applying circular economy models will also enhance asset reuse and contribute to a cleaner environment by delivering products as a service. Angaza offers a ‘pay-as-you-go’ platform in countries including Kenya, Tanzania, Uganda, Malawi and Zambia for selling intelligent and connected solar lighting devices. The connected devices can be directed to switch on and off depending on the user’s account balance. Product Health has developed a connected device that helps users in Sub Saharan Africa track health of batteries that charge solar panels, using their phones. Its Smart Battery Dashboard uses algorithms to warn users of destructive battery use patterns based on readings of voltage, current and temperature.

Input and decision optimization

If business continues as usual in Africa, its food import bill will rise to USD 150 billion by 2050, water scarcity will displace up to 700 million people by 2030 and it will take the continent till 2080 to achieve universal access to electricity. Emerging technologies like IoT, AI and Big Data analytics will accelerate application of circular economy principles to help Africa address these large development challenges by optimizing use of scarce resource inputs and facilitating smarter and better decisions. Innovations unfolding globally on this front hold greatest impact potential in Africa. Aerofarms in the US for example, uses sophisticated analytics to cultivate crops indoors which significantly increases yields. The enterprise leverages advanced predictive analysis and diagnostics to grow crops without soil and pesticides, track their nutrient requirements on a run-time basis and cut water usage by 90%. In fact, the same circular economy principles of input optimization and wastage reduction are already being tapped by enterprises like UjuziKilimo in Kenya. Ujuzikilimo uses a sensor-enabled data analytics system to measure soil conditions and quality to provide farmers with personalized SMS-based advice on managing soil and a range of topics including ideal crops to be farmed on their farms, required pest control and current market value of crops. 

Localization of production

Emerging technologies such as 3D Printing, IoT, and Big Data will transform the way products are manufactured. They will trigger a transition to a more localized and decentralised production system that leverages circular economy benefits like reduced wastage, compressed supply chains and minimal logistics requirements and lower environmental damage. Such a production system promises to create opportunities for new enterprises and individuals to enter the supply chain using locally available resources. For Africa, this shift translates to an opportunity to leapfrog into a new age of efficient, self-reliant and sustainable manufacturing. A promising start has already been made in this direction. A Togolese inventor Afate Gnikou built a 3D printer costing USD 100 from electronic waste. Tech-enabled enterprises are leveraging 3D Printing technology to develop prototypes of innovative low cost energy solutions like a portable solar power generator (Peppermint Energy) and bicycle-powered generators (Designs for Hope).

The number of objects and devices connected to the internet will increase from 10 billion in 2013 to up to 40 billion in 2019 and to 500 billion by 2030.
The total volume of data generated by IoT devices is expected to reach 600 ZB per year by 2020.
Globally, consumer cloud storage per user will increase from 513 MB per month in 2015 to 1.7 GB per month by 2020.
The cost savings and productivity gains generated through “smart” device monitoring and adaptation are projected to create USD1.1 trillion to USD2.5 trillion in value in the health care sector, USD2.3 trillion to USD11.6 trillion in global manufacturing, and USD500 billion to USD757 billion in municipal energy and service provision over the next decade. (Source: Mercatus.org)
Global IP traffic will increase nearly threefold over the next 5 years. Overall, IP traffic will grow at a compound annual growth rate (CAGR) of 22% from 2015 to 2020. Monthly IP traffic will reach 25 GB per capita by 2020, up from 10 GB per capita in 2015. (Source: Cisco)

SHIFT 3: Beyond Collaboration – Rise of the Peer-to-Peer Economy

Globally, a paradigm shift from the traditional centralized economic model to an increasingly decentralized peer-to-peer (P2P) collaboration based model is unfolding. P2P collaboration is finding application and credence in diverse realms ranging from renting homes to financial lending and even energy trading. Predicted to grow from USD15 billion in 2013 to USD335 billion in 2035 globally, the sharing economy is set to change the way consumption occurs. This can prove disruptive in the African context and emerging technologies can hasten this disruption. The underlying principles of sharing, trust, transparency and being in control of individual consumption assume heightened significance in Africa given the massive development challenges the continent faces. A pre-existing culture of sharing in Africa may further support the shift towards increasing P2P collaborations.  

Access as the new form of ownership

Like in the rest of the world, the growth of the P2P economy in Africa is expected to fundamentally shift the mode of consumption from being ownership driven to more access driven. This shift will enable BOP populations use products and services without having to own them. The shift towards P2P economy in Africa is already underway. Beyond oft referred examples of Uber and Airbnb, more local instances of such access-driven P2P collaborations in areas like financial lending and farm equipment and information sharing are cropping up in Africa. WeFarm is a SMS based P2P information sharing platform that enables farmers share and access farming information with other farmers around the world. HelloTractor enables small farmers to access tractors from others farmers. Emerging technologies like IoT and AI can help scale collaborative sharing and exchange across diverse sectors.

Thirst for trust and transparency

The traditional centralized economic model, particularly in emerging economies, is characterized by long value chains and layers of intermediaries. In Africa’s agriculture sector for example, middlemen bridge the gap between farmers and markets forcing farmers to contend with the lack of transparency in the system. Similarly, there is an underlying tension and lack of trust in the banking system with BOP populations unable to satisfy conditions set for credit access. By eliminating intermediaries, the P2P economic model enhances trust and transparency. In Africa, P2P lending arguably holds the best example of trustless exchange. Zidisha for instance, facilitates direct micro-lending between people without the need for intermediation. Emerging technologies like Blockchain can scale such innovations by facilitating new trust networks and consensus-based decision-making for boosting P2P lending and early stage investing.

Desire to be in control of individual consumption

BOP consumers in emerging economies are losing faith in the ability of governments and large companies to deliver affordable access to goods and services. The P2P economy offers a viable alternative for consumers to assume control of the modes of consumption and access. P2P modes of consumption are manifesting in various forms around the world. Collaborative P2P marketplaces like Yerdle and Bay Bucks in the US, for example, are helping individuals offer and access products and services amongst themselves. Communities are collaborating to produce goods and services that address their own consumption needs, thereby creating self-sufficiency. Emerging technologies can help Africa leapfrog to the P2P economy. In the energy sector for example, convergence of Blockchain, IoT and AI can enable P2P trading of solar energy between rural households based on decentralized autonomous solar micro-grids. For millions of Africans, it implies that they would be able to generate their own electricity instead of continuing their seemingly endless wait for the national grid to reach them.

The Sharing economy is predicted to grow from USD15 billion in 2013 to USD335 billion in 2035 (Source: PwC)
UK’s slice of the pie could be worth around USD 15 billion in 2025 (Source: PwC)

SHIFT 4: Power to the individual: the data revolution and personalization of everything

Emerging technologies will bring the individual to the epicenter of solution development and spur design and development of more and more customized and need-based products and services. This will allow ‘on demand’ and personalized access at affordable prices and empower the individual to have a say in solution development and the governance of his or her data. Fintech startups have been leading the way, leveraging data backed insights to develop customized financial products and serve financially excluded populations. However, the potential is much larger for disrupting the way companies, governments and donors design and deliver solutions and engage with the BoP consumers.

How we design solutions: From customization to precision

Today there are 15 billion connected devices worldwide, generating massive amounts of data about people using them. About 725 million people in Africa are projected to subscribe to mobile services by 2020. The resulting explosion of data will fuel deeper insights informing customized solutions, leveraging emerging technologies. Blockchain and AI enabled smart contracts will enable personalization of nearly everything across the product life cycle. Mobile phones will serve as a medium for registering and serving about 400 million people in Africa who today lack any official form of identification. East-Africa based Tala, for example, is a data science and mobile technology company which is already gathering information about a customer from over 10,000 data points to form a financial identity with a credit score within five seconds. Precision medicine is beginning to target an individual’s personalized needs using a combination of genomics, Big Data and predictive analytics. Going forward, this will also inform more targeted public healthcare approaches and allow greater precision in disease surveillance.

How we deliver solutions: Accessibility and affordability for all

New insights will allow further segmentation of BoP markets, driving more informed and personalized marketing, pricing, delivery and financing strategies for improving access. The healthcare sector, for example, will see a transition towards personalized delivery, increasing access and affordability. While telemedicine and mobile health services have already facilitated ‘on demand’ medical advice, emerging technologies will drive a new wave of personalization. Wearables will provide people with data and tools to make better health decisions and also be accountable for their decisions. Big Data in combination with predictive analysis and newer forms of remote diagnostics will shift health and disease management from being reactive to preventive, reducing costs for patients and healthcare providers alike. Similarly, IoT and Big Data will encourage insurance providers to rethink their business models and client interaction. For example, sensor enabled real time feedback and predictive analysis of consumer behavior can shift property and casualty insurance from a ‘reimbursement’ model to a ‘prevention and loss control’ model.

How we engage with the individual: Enhanced accountability and empowerment

Personalized and decentralized solutions will drive redistribution of power, accountability and decision making to the individual. Personal data encryption and decentralized data management will redefine the way data is shared and hence, what data is being used for solution development. MedRec and IBM Watson Health are examples of innovators who are working on creating Blockchain enabled data management system for health records and strengthening a patient’s ability to manage and own his or her data. Empowerment of the individual will also extend to production itself. Currently CAD files for 3D Printing is restricted in use owing to issues around intellectual property (IP) and design theft. Blockchain can overcome these issues via smart contracts and trigger exponential use of 3D Printing.

Health providers are able to prevent more than USD210.7 million in healthcare fraud in one year using predictive analytics (Source: mapr.com)
Market for personal 3D printers increased 33% in 2015 (Source: 3Dprint.com)
Worldwide Wearables Market increased 67.2% in Q1 of 2016 (Source: IDC)
Personalized medicine market will be worth over USD149 billion by 2020 (Source: Marketwatch.com)

SHIFT 5: Disrupting citizen relationship with the government

The African Union, in its long term development roadmap, Agenda 2063, identifies weak governance as a root cause behind conflicts and barriers to sustainable development in Africa. The roadmap, therefore, considers enhancement of participative and accountable governance in Africa as one of its central goals. E-governance, which has been growing in popularity in emerging nations over the last decade, only marks the beginning of the transition to the next generation of governance, characterized by heightened accountability, responsiveness and inclusiveness. Leveraging emerging technologies, governance in African countries will become more efficient. These technologies may trigger fundamental changes in the nature of engagement between governments and citizens by making it more participative and transparent. The Aadhaar program and the IndiaStack initiative in India show how governance infrastructures can be digitized to address large development challenges.  Technologies like Blockchain and Big Data promise to revolutionize the delivery of public services and social benefits to citizens by making it efficient and personalized. Within the government, departments and public agencies as well as provincial administrations will become more connected through a convergence of digital strategies encompassing processes and delivery of public services and information.

Efficient and personalized social benefit transfer

Emerging technologies promise to significantly enhance efficiency of governance infrastructures and processes which will in turn, transform the way governments deliver public services and transfer public benefits like subsidies and social securities. Barriers including lack of identity, credit histories and poor banking penetration impede effective benefit transfers and advancement of financial inclusion in African countries. For example, only 23% of African adults have bank accounts. Emerging technologies like Blockchain can help overcome such barriers and significantly expand coverage of social benefits in seamless and cost effective ways. The UK Government is exploring how Blockchain can make registration and payment processes involved in the deployment of grants and benefits efficient and free from frauds or errors. Apart from improving efficiency, emerging technologies will also make social benefit transfers more personalized through advanced data analytics and new modes of verification. The Department of Homeland Security in the USA for instance, is exploring how emerging technologies and advanced analytics can resolve identity issues and personalize solutions. Such emerging technology applications will prove highly relevant in the African context.

Participative and transparent engagement

Emerging technologies will also play a significant role in transforming the nature of engagement between governments and citizens across key areas such as identity, property ownership and land registration, voting and tax collection by making it more participative and transparent. India has successfully digitized identity of about 85% of its 1.2 billion-strong population through the Aadhaar program. Estonia recently became the first country to digitize identities of its citizens using Blockchain, allowing them greater control over access and use of information related to their identities. Digital voting platforms like Follow My Vote which uses Blockchain to enhance election transparency, are finding use cases. Emerging technology applications like identity digitization and digital voting platforms promise to have the greatest impact in Africa, given that about 35% of its population lacks any identity and democratic rights. Realizing this, the Kenyan government is exploring the role Blockchain can play in privacy, access and control of data while the Ghanaian government is supporting enterprises such as BitLand to digitize land registration using Blockchain to bring in transparency and provide greater control to citizens. In South Africa, the Central Securities Depository is developing Blockchain based solutions focused on proxy voting.

The ‘connected’ government

Governments in African countries will leverage emerging technologies to become more connected with their constituents like departments, agencies and provincial counterparts to automate processes, innovate around public services design and delivery and provide greater access to information to citizens. This connected form of governance will be characterized by a transition to shared, cloud based platforms for delivery of public services and more frequent dialogue with citizens. Technologies like IoT, Big Data and AI will enable better planning, development and monitoring of smart cities through collection, processing and analysis of large volumes of data generated by connected devices. Technology enabled advanced data analytics will also help African governments frame policies that are more evidence-based. National governments of different African countries will also become more interconnected by leveraging technology to develop collaborative approaches for dealing with transnational issues like water security, environmental protection and conflict.

25% of all government external spending will be towards deploying, managing and realizing the business value of IoT by 2018 (Source: information-age.com)
Governments across Africa are placing more and more importance on initiatives which will transform the way they work through ICT, says Robert Mugo, Ag CEO, ICT Authority of Kenya. (Source: Microsoft.com)