A market for tech adopters & merchants, Africa is already lagging behind a tech-led future

CHRIS CHENGA

A couple of years ago, just before the World Economic Forum in Davos started losing its stride among leading platforms of honestly progressive thought discussion, many participants gave credence to the possibility of Africa leap frogging itself to contest within the fourth industrial revolution. This narrative was pleasantly received by many well-wishers of the continent’s development, and competitiveness. However, it was lacking in sincerity as Africa is already behind in the fourth industrial revolution. To suggest possibility creates room for abstract suggestion, but practically the reality is evidently telling.

Consider the issues around Jumia, which recently tried to brand its initial public offering around the identity of being an African company. As its corporate filings reveal, the company is European, only operating within African jurisdictions. This is an e-commerce and ICT trend on the continent. Many market leaders in this space are merely tech adopters of intellectual property foreign to the continent. Isn’t that the core of the fourth industrial revolution; owning ICT intellectual property? So if the continent’s dominant operators’ competitive advantage is tech adoption, inherently Africa is positioned to continue to lag behind the intellectual property revolution. The way ICT has been competitively operated on the continent is to create corporate entities that license or franchise foreign intellectual property, merely proving to foreign owners the capacity to secure market share and run going concerns that create returns for foreign owners.

Data-only operator, Rain, is set to launch Africa’s first 5G network ahead of other industry giants Vodacom, MTN, Cell C and Telkom in South Africa. The company is licensing the intellectual property to this network from Huawei. Indeed then, casual competitive assessment of the sector would rationalize that the continent’s largest entities are jostling to secure licensing agreement as conduit to foreign ownership. Indeed this is not a moral critique of a means of business; this is very sound business with many benefits to millions of Africans who could use licensed technology to enhance their standards of living and economic ingenuity. But, there is testimony in this cross-continental interaction as to where Africa already stands in the fourth industrial revolution. The same applies in the nature of interaction not only in software but hardware as well. Most of the hardware gadgets posturing as African are assembled in developed economies, and the branded identity merely satisfies the Afrocentric marketing gimmick to achieve market growth on the continent’s identity conscious markets. This is nuance to a business model such as Apple, which does assemble its products in foreign markets, but retains intellectual discretion in design, functionality, utility and specifications that compromise real value ownership in product.

The intellectual property foundation of the fourth industrial revolution simply reveals that without its own patents and trademarks, the continent is furiously competing in the tech space to be the best possible merchants of foreign ownership. The resulting business models are thus structured accordingly. This is why in developed economies there is excess capital looking for patent acquisition and venture capital to integrate fresh innovation into market ready operations, but there is incomparably far less capital on the continent for research and development. Indeed this is what Jumia’s CEO, Sacha Poignonnec, was implying when he remarked that his company struggles to hire market ready developers from Africa. It is because the corporate structure of the sector has a capital allocating culture where the continent’s practitioners are merely perceived as operational and merchant active; distinct to intellectual incorporation. The fourth industrial revolution already has a defined capital and operational structure, and Africa is already positioned.

Why governments should get ahead of corporates

As African corporates are occupied tying to secure licensing of foreign intellectual property, governments should get ahead in priming their citizens to enter the intellectual ownership space. It is irresponsible to retain the relations such as in Zimbabwe where tech hubs and public ICT budgets are dependent on easing corporates. Corporates such as Econet and at one time Telecel, both adopters of foreign IP, are subject to the same aforementioned capital allocative culture in their industries. Thus, much of their intended developmental initiatives are either constrained within CSR budgets or donor contributions. This is far from adequate to truly stimulate continentally grown competitive industry. Future tech practitioners must be supported by intentional capital that is invested in tangible returns, which is market competitive intellectual property.

This is why it may be inaccurate observation for Ecocash CEO, Natalie Jabangwe, to suggest that an ICT revolution is an accessible and attainable opportunity for Africa, particularly in rural areas where over 50% of the growing population resides. As long as there is no direct correlation between actively competing intellectual property and the African children in rural areas, there will never be enough invested capital to stimulate the Afrocentric tech revolution. That level of capital raise is beyond intellectual property adopters and merchants which dominate our markets. Only governments can work out policy to lure in such allocative funds. The narrative of a tech-led future remains idealist today, and notions of Africa competing in the fourth industrial revolution are abstract suggestions distance from the reality already playing out in global commerce.

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