Africa’s Unfolding Digital Revolution
Will the fourth industrial (digital) revolution bypass Africa in much the same way as the previous three revolutions – steam, electricity and (analog) information technology – largely did?
The first industrial revolution that began in Britain in the late eighteenth century, and spread across Europe and the United States in the nineteenth century, witnessed the transition to new manufacturing processes in which steam-powered machines replaced human labour – a process which left Africa trailing.
That handicap was further entrenched with the advent and spread of electricity across the Western world in the nineteenth and twentieth centuries. Electricity promoted economic growth on previously inconceivable levels, opening up a vast material chasm between the West and the rest of the world.
Surprisingly, this pattern of development was not replicated by the analog telecoms revolution at the dawn of the twenty-first century, although few saw it coming. Phuthuma Nhleko of MTN, Mo Ibrahim of Celtel, Mike Adenuga of Globacom and Strive Masiyiwa of Econet, were among the exceptions.
These African entrepreneurs were the pathfinders who defied the sceptics and built the mobile operator networks that enabled Africa to leapfrog fixed-line infrastructure and move directly to mobile phones – though the spread of 2G and 3G feature phones fell a long way short of eliminating Africa’s digital divide.
Stephen Larkin, CEO of Africa New Energies, and a prominent advocate of Africa’s development, is confident that the digital revolution will not bypass Africa, but – on the contrary – that the digital revolution’s decentralised nature will prove to be ideally suited to the African landscape.
“Why did the previous industrial revolutions pass Africa by?” Larkin said, adding: “For any industrial revolution to occur, there needs to be a vast mobilisation of financial resources and intellectual capital.”
“The first industrial revolution needed steam, coal, coal mines, a railway workforce that knew how to prime an engine capable of generating sufficient pressure to haul carriages, and a ticketing and accounting system to collect revenue from passengers and freight to justify the investment,” he said.
“With highly centralised transport infrastructure, population density is key. If there aren’t sufficient people living along the line, there’s no point in building it. It’s the same with electricity. It was centralised, where typically a coal mine or hydro plant provides feedstock to a power plant that requires transmission infrastructure, in which electricity losses mount the further it has to travel,” he added.
When the electricity revolution gathered pace in Europe and America, gold was discovered on the Witwatersrand in 1886. Over the next 120 years, South Africa went on to produce 40% of all the gold ever mined. But had it not been for the Wits discovery, the financing required for large-scale, centralised electrification in the country would never have been forthcoming.
The analog telecoms revolution was different, Larkin said. “With the advent of mobiles,
Africa’s vast distances were finally tamed. No longer was its necessary to lay copper over thousands of kilometres to every household or business. A mobile tower could put tens of thousands of Africans in touch will billions of people around the world. Centralisation was no longer necessary.
Two decades after the arrival of mobile phones in Africa, more than 700 million of Africa’s1.2 billion people possess a mobile handset. But as Larkin points out: “Most Africans have only had access to voice and SMSs.” Africa’s digital divide has yet to be bridged, and 4G internet-enabled technology still accounts for significantly less than 10% of Africa’s total connectivity.
Estimates suggest there are now 100 million smart phones in Africa, which is expected to rise to 400 million by 2020 – but that still leaves 800 million Africans without access to the internet.
One barrier to entry has been the high cost of internet-enabled smart phones. As Larkin points out: “The latest iPhone at R20,000 costs more than a years’ salary for 70% of Africa’s population. But that’s about to change. Smart tablets manufactured in India have the same functionality as the first iPad but costs R500. That is going to make the internet all but universally accessible,” he added.
But there are also mounting political pressures at work. “Governments are increasingly being pressured by the hundreds of millions without access to the internet to leverage the regulatory environment to force the provision of data at affordable prices,” Larkin said.
Larkin is convinced that the internet of things – the network of physical devices, vehicles, home appliances embedded with electronics, software, sensors and connectivity that enables these objects to connect and exchange data – will have far greater impact in Africa as is it will help the continent overcome its power, transport and water infrastructure deficits in much the same way as mobiles helped Africa overcome its deficit in fixed-line infrastructure.
The digital transformation in Africa continues to gather momentum. Telecoms remains the leading sector for attracting foreign direct investment. The fourth industrial revolution will provide Africa with opportunities for new forms of manufacturing. TV White Space technology – exploiting unused radio spectrum – will enable the provision of Wi-Fi connectivity at dramatically lower costs.
Larkin is also confident that the “internet of things will transform the economics of deploying sophisticated equipment in remote areas where skilled operators are reluctant to venture.” Sensors, CCTV and electronic monitors can be used to oversee everything from oil and gas pipelines to dam levels, and from transmission lines to computer-feed irrigation systems – without the need for human intervention.
Yet the biggest obstacle in the way of Africa building a digital continent may be Africans themselves – or at least their governments. Far too many governments in Africa see broadband access not as a catalyst for economic and social development but as a potential source of dissent to be crushed.
The fourth industrial revolution cannot be fully realised in Africa without greater progress in delivering the second. “But the economics of off-grid and mini-grid access means that Africa is no longer dependent on the state to provide electricity centrally. It can now be provided at the household level,” Larkin said.