Saturday, July 31, 2010

The "Digital Railroad" - Connecting Africa

Connecting Africa to the digital world is an important goal and progress is being made. At the African University of Science and Technology here in Abuja using Skype, email or text messaging is an important tool for us visiting faculty to stay in contact with our students after we leave. The development of the communication infrastructure will determine the location of the ‘corridors of shame’ in cyberspace. Being connected to main cyber arteries is vital for the growth and development of science, technology and commerce.

Historically one of the most important infrastructure projects was the Uganda Railway, which integrated colonial East Africa into the British Empire. Now ‘digital railways’ are being built and one example is the Seacom project - a $800 million project to run an undersea fiber optic cable along the East African coast mainly funded by African investors. These efforts will allow Africa to join the global e-commerce trade and provide vital fast communication bandwidth. Everybody here talks about bandwidth and how essential it is for continuing and accelerating the efforts to connect Africa to the World, open new markets and allow for cultural and scientific exchange.

The precedence set by the runaway implementation of mobile telephones in Africa hints at the enormous growth potential for the IT sector in Africa. Everybody has one or more cell phones here. Cell phones are ubiquitous and so are the bad habits of constantly being connected. Last night in an upscale restaurant in Abuja everyone was constantly texting, checking their email or showing and taking pictures using cell phones - so was I. Safaricom’s M-Pesa service in Kenya is an example of innovation we can learn from: integrating banking services and fast and reliable digital communication allows the transmission of money via the cell phone and lets farmers buy and sell products on markets without cash due to instant confirmation of the deal. Restaurants and other vendors are buying into this technology platform. In societies where carrying lots of cash makes you an immediate target for theft and/or bribery a cashless commerce has a massive appeal.

The fast development of the digital infrastructure will initially allow Africa to become competitive in the data processing and call center business. The good English language skills of the emerging middle class will likely result in US and European customers being directed to call centers here. The ‘Indian model’ has shown that these centers are to be seen as ‘landing parties’ for US and European businesses before engaging in manufacturing partnerships after a critical market size is reached. Make no mistake Africa will be the emerging market in the next 50 years and not paying attention to its early stages will cost us dearly down the road.

For Africa there are 3 crucial challenges to implement the ‘digital railroad”:

  1. Don’t throw out the baby with the water. Don’t overtax the African internet no matter how tempting this is. Governments are always on the quest for additional income and in countries like Nigeria were the majority of workers do not pay taxes on their wages a consumption tax is appealing. This could seriously delay the growth of the digital blood circulation and lead to limbs not being developed or succumbing to gangrene. The French postal office had a system called ‘Minitel’ about 20 years ago that was de facto a proto-internet using dial-up. The government had a strict policy of access control and no incentives to grow it as a european project. The subsequent US internet domination is the result of minimum regulation and the government staying out of the business as long as possible.Asian contries such as South Korea have now overtaken the US in certain aspects of the cyber infrastructure such as band width.

  2. Don’t buy into the current platform. One of the main lessons learned from the cell phone explosion in Africa is that ‘leap-frogging’ is possible and certain technologies (i.e. land lines) can be superseded. Sometimes it pays to not be an early adopter. Conventional laptops and desk tops will become obsolete for many businesses and at the moment net-books might be a better choice until the currently still amorphous ‘digital cloud’ becomes more structured.

  3. What African governments must do is to provide ample subventions for emerging national and pan-African research universities as well as research and commercialization centers to help them increase their digital bandwidths. Commercialization relies on an incubation and stimulus period. To make money in the knowledge economy you must first spend money.

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