Transcript Current state - IBM Almaden Research Center

Serving the Next Billion:
How Information Can Drive New Opportunities in Africa
Dr. Mark Dean
IBM Fellow and V.P. Almanden Research Center
May 2008 Almaden Institute
© 2007 IBM Corporation
 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
May 2008 Almaden Institute
© 2006 IBM Corporation
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, …)
May 2008 Almaden Institute
© 2006 IBM Corporation
Direct Engagements
May 2008 Almaden Institute
© 2006 IBM Corporation
 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
May 2008 Almaden Institute
© 2006 IBM Corporation
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
May 2008 Almaden Institute
© 2006 IBM Corporation
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
 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
Opportunities
- Develop processing capabilities for raw materials
- Reinvest profits from commodity boom into infrastructure
for high-value products and services industries
May 2008 Almaden Institute
© 2006 IBM Corporation
Informal Economies
In some African nations, unregulated economic activity
constitutes as much as 40%-70% of the gross domestic
product
 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
May 2008 Almaden Institute
© 2006 IBM Corporation
Movement
 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
(Maps: 2008 Google – Imagery, 2008 TerraMetrics, NASA, Map data 2008 AND, Europa Technologies)
May 2008 Almaden Institute
© 2006 IBM Corporation
Infrastructure
The foundations for business, especially the knowledge economy, are still lacking
throughout many regions of Africa
 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
May 2008 Almaden Institute
© 2006 IBM Corporation
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
 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 between
African education system and the private sector
is limiting growth in the talent pool
 Technology and entrepreneurial skills development
can be fostered with assistance from the private sector
Opportunities
– Mentoring/Internships
– Distance learning
– Curriculum development
– Sponsored training programs
May 2008 Almaden Institute
© 2006 IBM Corporation
 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
May 2008 Almaden Institute
© 2006 IBM Corporation
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
May 2008 Almaden Institute
© 2006 IBM Corporation
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
May 2008 Almaden Institute
Photo: Shaul Schwarz, New York Times, April 13, 2008
Photo: http://www.pbs.org/wnet/africa/photoscope/index.html
© 2006 IBM Corporation
Remote Public Services
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
 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
May 2008 Almaden Institute
© 2006 IBM Corporation
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
May 2008 Almaden Institute
© 2006 IBM Corporation
Thank you
May 2008 Almaden Institute
© 2006 IBM Corporation
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.
May 2008 Almaden Institute
© 2006 IBM Corporation