© 2007 ibm corporation may 2008 almaden institute serving the next billion: how information can...

May 2008 Almaden Institute © 2007 IBM Corporation

Serving the Next Billion: How Information Can Drive New Opportunities in Africa

Dr. Mark DeanIBM Fellow and V.P. Almanden Research Center

© 2006 IBM CorporationMay 2008 Almaden Institute

Background

– History of IBM being in Africa

– Direct Engagements

Current state

– Natural Resources

– Infrastructure

– Education and Skills

mPresence

– Wireless Infrastructure

– Personal and Business Transactions

– Delivering Content and Services


IBM in Africa Established presence in Africa for over 55 years

Increasing corporate investment to target growth across the African markets in 2008

– Hiring staff

– Building capacity and infrastructure

– Expanding into new markets

GIO 3.0 Africa Initiatives

– BlueGene Supercomputer

– Makocha Minds mentorship program

– Shared services for NGO back-office

– Africa Innovation Initiatives

– Micro-financing Hub

– Software Lab

– Country Specific Initiatives (eSkills Council, Lauguage Translation, …)


Direct Engagements


Background



Current state


– Infrastructure


mPresence





Africa: Behind the Headlines

Youth, entrepreneurial heritage, language and natural resources set the stage for rapid development and economic opportunity in Africa:

Stable, open governments have emerged in many regions

Growth in sub-Saharan Africa (SSA) remains strong at 5-6% for the fourth consecutive year and it’s projected to continue into next year

Africans do not expect – and do not want – the world to “do it” for them. They need help and assistance, but what they seek most is enablement, not charity


Moving Up the Value Chain

Africa’s raw materials are extracted, exported and refined overseas and the finished goods are marked up and sold for hefty profits all over the world

Opportunities

- Develop processing capabilities for raw materials

- Reinvest profits from commodity boom into infrastructure for high-value products and services industries

A strong desire exists within Africa to move from being consumers / suppliers to producing societies

African nations can parlay the value in their natural resources into diversified economies, infrastructure and more value-added business:

– Rwanda: Coffee Beans to Designer Coffee Roasts

– Botswana: Rough Diamonds to Diamond Cutting

– Uganda: Cotton to Textiles

– Ghana: Cocoa Beans to Designer Chocolates


Informal Economies

Large informal sectors usually indicate onerous regulatory environments and harsh taxation policies

Informal economies are important and vital to growth, yet few models and incentives exist for businesses to transition

Entrepreneurs will deliberately choose to operate “off the books” because the benefits of being informal outweigh those of being formal

Opportunities– Innovative co-operative models for informal players to aggregate and

create economies of scale and attract institutional investments– Access to infrastructure and other incentives that encourage registration

in a the “legal informal,” sector– Advocate policy reform

In some African nations, unregulated economic activity constitutes as much as 40%-70% of the gross domestic product


African cities account for 60% of the region’s GDP and are important centers for education, employment, and trade (Source: UNCHS 2001b)

Significant growth in urban areas

– 38% of Africa’s population live in urban areas (297 million)

– By 2030, expected growth, approximately 54% of Africa’s projected population will live in urban areas (1405 million) (Source: UNCHS 2001a)

Infrastructure impacts economics– $1,000 estimated cost to ship a

container from the U.S. to Tanzania

– $10,000 estimated cost to ship a container from Tanzania to Burundi

Movement

(Maps: 2008 Google – Imagery, 2008 TerraMetrics, NASA, Map data 2008 AND, Europa Technologies)


Infrastructure

Africa’s ICT infrastructure investment totaled $8 billion in 2005; development of lower cost broadband access for landlocked countries is critical

Opportunities like 2010 FIFA World Cup are driving physical infrastructure investment

Chinese firms building out roads, bridges, stadiums and schools to support their interests in natural resources in the region

Opportunities

– Cost effective and collaborative partnerships for infrastructure development

– Linking economic strategies to infrastructure investment plans

The foundations for business, especially the knowledge economy, are still lacking throughout many regions of Africa


Most non-profit groups concentrate funding on basic education, creating even more demand for higher learning but less capacity at the university level

Inconsistent or nonexistent partnerships betweenAfrican education system and the private sector is limiting growth in the talent pool

Technology and entrepreneurial skills developmentcan be fostered with assistance from the private sector

Opportunities

– Mentoring/Internships

– Distance learning

– Curriculum development

– Sponsored training programs

Skills Development

Africa’s youth are the key to future economic development, but as a resource they currently are not being cultivated to full potential


Background



Current state


– Infrastructure


mPresence





Wireless Infrastructure

Lack of legacy infrastructure is fuelling multiple “leapfrog” opportunities

The many challenges unique to Africa – huge geographic distances, widely dispersed populations, little existing telecommunications infrastructure – have conspired to create a wireless hotbed

African use of mobile phones has been far more innovative than in Europe, largely because the specific needs of Africa require innovation

Mobile device as an electronic wallet

Opportunities- Identity, Address & Location- Healthcare & Disease Management- News, Entertainment, Democratic Participation- Financial Transactions & Banking Services


Personal and Business Transactions

Airtime is being used as a commodity, where mobile minutes have become a type of currency that is traded and bartered

Cell phone services have been developed that allow Africans to send money by text message to friends, family or business partners

Farmers in South Africa with mobile access to market prices realize 30% greater profits than those who don’t

Opportunities- Supporting Entrepreneurial Activity- Transaction and Payments- Market Pricing

Photo: Shaul Schwarz, New York Times, April 13, 2008

Photo: http://www.pbs.org/wnet/africa/photoscope/index.html


Remote Public Services

Doctors in the public health system are able to monitor and manage the care of HIV/AIDs patients

New opportunities are emerging for the government to play a role as content provider and strategic partner in democratic and economic reform through e-Government activities

The Cheetah Generation, in particular, is eager to learn and apply their skills to building a brighter economic future for Africa

Opportunities- Healthcare & Disease Management- Democratic Process & Informed Society- Educational Content & Delivery

Africa’s single most important resource for participation in the global economy is its people and opportunity lies in helping them be informed and healthy


Delivering the Right Content for the Context

Mobile technology as an innovation platform for service applications

Hybrid networks leveraged to provide local content in local languages

Providing services to low income consumers

Impacting sectors such as– Agriculture: local market prices

– Health: emergency and rescue systems

– Community information: governance and dissemination of public information

– Education: standardized content and delivery


Thank you


Abstract

“Open for business. Africa is poised to join – and change – the global economic landscape” is a bold statement made in IBM’s Africa: A Global Innovation Outlook Report. Although the popular media tends to focus on the political strife and instability that arise in some of the African nations, many African nations are positioning themselves for development and self-reliance in the global economy. This, in turn, affords challenges and opportunities around global integration and socioeconomic change of societies with a different perspective from developed nations. This presentation provides background on the economic, skills and resource readiness of the African nations with a focus on technology and information opportunities in an area of the world poised for change.

© 2007 ibm corporation may 2008 almaden institute serving the next billion: how information can...

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