19 Feb2009

Can ICT Replace Industrialization in Africa?

Posted in Business and Development by Marco Puccia with 4 Comments

The East African Standard ran an article a few days ago called “Why Firms in Africa Should Adopt ICT”. The article refers to comments made by South Korean scholar Gihong Kim of Handong University. Professor Kim postulates that by embracing ICT services, African countries can duplicate the job creation traditionally brought about by industrialization (eg. Industrial Revolution) without experiencing the consequential displacement of workers or the rural-to-urban migration. He said, “When [ICT is] combined with entrepreneurship, African countries can increase their share of international trade rather quickly.”
It is interesting to think about the potential of ICT in development within the paradigm of industrialization or as an economic development strategy. This has several policy implications — first and foremost, an increased level of infrastructure development across the continent. Based on research I have done on the market potential for call centers in Kenya, ICT intensive industries will not be cost-effective until both electricity and internet access become more reliable and affordable. Granted, great strides in infrastructure development for ICT (particularly in cellular phone grids) have been made in the last couple of years — and the development/business potential is beginning to be realized.

Having worked for a Kenyan-based e-commerce firm (along with the development of my current business which is ICT intensive), I can personally attest to the great potential ICT has for development.

But at the same time, ICT is not a labor-intensive industry — so the question is, to what degree should governments pursue ICT as an economic development strategy?

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4 Responses to “Can ICT Replace Industrialization in Africa?”

  • Marco Puccia February 19, 2009 Reply to

    Came across the “Macedonia Connects” project through Glenn Strachan on Twitter (@glennstrachan) — amazing project and applicable to the discussion.

    Check out the BBC article here: http://news.bbc.co.uk/2/hi/programmes/click_onl...

    And the BBC Video on Glenn's blog here: http://glennstrachancv.blogspot.com/2009/02/bbc...
  • Marco Puccia February 19, 2009 Reply to

    Another ICT project bringing internet to Kenya this time:

    From the NYT (Feb. 1, 2009):
    http://www.nytimes.com/2009/02/02/technology/in...
  • TMS Ruge May 14, 2009 Reply to

    Today, the road to Africa's future looks nothing like it did in 1975. Africa's yellow-bricked road is being built by ones and zeros, the digital super highway for development. It's what's making the future bright for the emerging BPO sector, and firms that are etching their growth in this sector are well-positioned. What's amazing is that BPO firms are sprouting up in spite of bandwidth infrastructure limitations that lag behind their Western counterparts. But that's changing. Currently there are 5 legitimate initiatives to connect Africa to the rest of the planet's broadband network. SEACOM goes live next month. EASSY, Google's O3B Networks' et al are a-lighting within the next 15 months. Digital infrastructure is in place for firms like Samasource to truly empower digital entrepreneurs in Africa's emerging markets. See the bigger picture.

    But all this growth can not happen without the industrialization of certain sectors. The biggest of which is the energy sector. For all of it's growth, Africa's available energy to power an ever-expanding IT sector is anaemic at best.

    More needs to be done to fully take advantage of all of this available bandwidth. Africa's growth is being stunted by a growing lack of energy. From South Africa, to Egypt. Nigeria to Kenya. Rolling blackout are the order of the day. We stutter as the rest of the world hums along at a break-neck 24/7 pace. Our inability to keep up is ever-apparent the more we try to stay connected to the rest of the world. Within the next two years, over 6 terabytes of backhaul broadband is going to be up for grabs in Africa. This will see an influx of new entrepreneurs bumping against energy limitations. See the bigger picture.

    So, yes, ICT is Africa's industrialization, but it won't happen if we don't address critically deficient infrastructures.
  • TMS Ruge May 14, 2009 Reply to

    Today, the road to Africa's future looks nothing like it did in 1975. Africa's yellow-bricked road is being built by ones and zeros, the digital super highway for development. It's what's making the future bright for the emerging BPO sector, and firms that are etching their growth in this sector are well-positioned. What's amazing is that BPO firms are sprouting up in spite of bandwidth infrastructure limitations that lag behind their Western counterparts. But that's changing. Currently there are 5 legitimate initiatives to connect Africa to the rest of the planet's broadband network. SEACOM goes live next month. EASSY, Google's O3B Networks' et al are a-lighting within the next 15 months. Digital infrastructure is in place for firms like Samasource to truly empower digital entrepreneurs in Africa's emerging markets. See the bigger picture.

    But all this growth can not happen without the industrialization of certain sectors. The biggest of which is the energy sector. For all of it's growth, Africa's available energy to power an ever-expanding IT sector is anaemic at best.

    More needs to be done to fully take advantage of all of this available bandwidth. Africa's growth is being stunted by a growing lack of energy. From South Africa, to Egypt. Nigeria to Kenya. Rolling blackout are the order of the day. We stutter as the rest of the world hums along at a break-neck 24/7 pace. Our inability to keep up is ever-apparent the more we try to stay connected to the rest of the world. Within the next two years, over 6 terabytes of backhaul broadband is going to be up for grabs in Africa. This will see an influx of new entrepreneurs bumping against energy limitations. See the bigger picture.

    So, yes, ICT is Africa's industrialization, but it won't happen if we don't address critically deficient infrastructures.

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