Technology Innovation and Fear of Job Losses

Emma Okonji writes that the alarm being raised by some that the rise of technology innovators in Africa could lead to job losses, is bound to dampen creativity in information technology on the continent

The ability of young African entrepreneurs to use technology to solve problems is pushing the continent to the forefront of innovation. In South Africa, Nigeria, Kenya, Tanzania and other African countries, young technology innovators have come up with technology ideas and solutions that are already causing disruption to existing technologies and making life a lot much easier for people, but the potential for Africans in devising these game-changing technologies are beginning to be stifled by regulators and opposition groups, who are all out to stop the wheel of progress for fear of the future. The opposition groups are feeling threatened that the new technologies might displace them, and they are worried that jobs are already being threatened.

The issue, which has turned out to become a continental issue, was extensively discussed by technology experts who attended the Hogan Lovells Africa Forum held recently in Johannesburg, South Africa.

Experts’ views

Africa’s innovative spirit has been lauded by influential voices including United States President Barack Obama, Facebook founder Mark Zuckerberg and the World Economic Forum (WEF). Yet, it is still a battle to convince some politicians, policy makers and workers in Africa to embrace information technology (IT), and not to stifle it for fear of future change or to protect the lumbering corporations of the last generation.
Discussing the implications of the action of the opposition groups, delegates at the recent Hogan Lovells Africa Forum in Johannesburg, called for ‘light touch’ regulations and open minds.

According to expert with Khonology, an IT company in the financial space, Michael Roberts, “In the industrial revolution people feared job losses, but what actually happened is that jobs changed.”
“The way we create jobs in the future will not be the jobs of today. Technology will drive demands for different skills. Bringing more efficiency does not necessarily have to remove jobs, it can create different types of jobs – so we need to stop the fear,” Roberts said.

The growth of the IT cloud, where people can buy software and hardware capacity on demand without heavy capital outlay, was great for African innovators, Roberts added, and explained that the cost of building and delivering something has gone through the floor, so for youngsters who are technologically savvy there’s a future.
According to the Head of Policy, Analysis and Research at Multichoice South Africa, Aynon Doyle, “Luddites will always try to hold things back. That is clearly seen with taxi drivers attacking Uber drivers and retailers facing staff protests when they try to introduce self-service checkout lines.”

Using IT to achieve more productivity with less resources would have a huge impact on Africa if innovation was encouraged, Doyle said, while calling on African governments to face up to the IT revolution, allow innovation to flourish and deal with the technology disruption that must come.

Access to the internet alone isn’t enough, however. “87 per cent of South Africans have mobile phones but that has not increased the per capital income as their economic output has not increased. Watching YouTube is great but it is not economically beneficial,” Doyle said. “The question is how do we turn these technologies into economic value?”, Doyle said.

Technology innovators’ zeal

Despite the challenges and the opposition, Africa’s young IT entrepreneurs are certainly drawing the world attention.
The World Economic Forum (WEF) last year included a session called: “Is Africa leading the innovation revolution?” which highlighted how young Africans are becoming technology generators, not just adopters.

In September last year, Facebook founder Mark Zuckerberg visited Nigeria and Kenya and declared that the future of the world would be built in Africa. In July 2015, Obama held his annual Global Entrepreneurship Summit in Nairobi and said: “Young people like you are harnessing technology to change the way Africa is doing business.”
Africans are very capable of using IT to solve their own particular problems, believes Gaurav Bhandari, an associate of Kenyan law firm DV Kapila & Co.

“We want to be able to provide solutions for ourselves. Europe and the rest of the world are looking to Africa not only for investment purposes but also to learn, to look at where we are going and what we are doing.”
There is plenty to look at, he told the Hogan Lovells forum, with one of Kenya’s biggest successes so far being M-Pesa mobile money technology, which is now being adopted on other continents.

“M-Pesa blossomed in Kenya because banks were very unfair to the common people – 80 per cent were unbanked with no access to debit or credit cards and ATMs. People are now able to send money from one phone to another via SMS, and this has transformed lives in Kenya,” Bhandari said. Almost $3 billion in the last quarter was transacted via the mobile payment platform in Kenya,” he said.

Kenyan entrepreneurs are also creating excellent maternal healthcare applications and an app to let villagers buy solar power via a mobile phone and resell it to others, giving them a new income stream.
“I don’t want to say Kenya is the birthplace of technology in Africa, but it’s the future,” Bhandari said. He reiterated that in a continent desperately needing more jobs, regulators must not snuff out these innovations.
“Technology and regulations and politics are all intertwined. If they regulate IT and make the life of the youth even harder, the politicians will have a problem come election time,” he warned.

The Blockchain technology

One new technology with potential massive ramifications for Africa is Blockchain, where blocks recording batches of valid transactions are stored in globally distributed ledgers. Blockchain provides proof that somebody owns something of a certain value and those records can not be stolen or hacked.

“If an asset moves from one person to another it is recorded in this highly transparent system, so the potential to apply blockchain technology across Africa and use it to fight corruption was enormous, according to Roberts. It will have a major impact in the banking sector and other fields such as insurance, legal records and to verify contracts,” he said.

An Associate Director with PricewaterhouseCoopers (PwC) in South Africa, Tielman Bothaan, reminded the Africa forum that since only 15 per cent of Africans have broadband access at home, mobile technologies were the future.
“Healthcare providers expanding into Africa are using mobile technologies to do it. “In the midst of the university disruptions in South Africa, higher education institutes are asking how they can use IT to let people access quality education in different ways,” Bothaan added.

Regulating OTT technology in Africa

Although the issue of Over the Top Technology (OTT) is making the rounds in Africa, most regulators have vehemently opposed to its regulation on the continent.Others are still considering its regulation for fear of disrupting existing GSM technology for voice calls and data communications.

Worried about the disruption that OTT technology is bringing to the telecoms industry in Africa, where new service providers are taking advantage of OTT technology to provide free services for voice communication through platforms like Skype and WhatsApp, telecoms operators in Nigeria have cried out to the telecoms industry regulator, the Nigerian Communications Commission (NCC), to make haste to regulate the OTT technology. Telecoms operators have alleged that OTT is fast cutting down on their revenue streams, since they spent huge sums of money in paying for the GSM spectrum licences and for the building and expansion of their GSM networks.

Their worries are that they have spent so much money in building the GSM network and that a situation where new service providers now bypass the traditional GSM network to offer voice services free of charge over the internet, is detrimental to the growth of GSM operators who had over the years, spent their monies in building the GSM network.
Although NCC is yet to wade into the matter, its Executive Vice Chairman, Prof. Umar Garba Danbatta has said commission would maintain its technology neutrality position, and regulate the activities of telecoms service providers, and not the technology with which they provide the services.

Country Manager, Ericsson Nigeria, Johan Jemdahl, who joined other stakeholders in condemning the call to regulate OTT technology, said any attempt to heed to the voices of those calling for the regulation in Nigeria, would result in stifling telecoms growth in the country.

“You cannot stop technology evolution. OTT services should not be regulated in any form. What the operators who feel threatened about the OTT services should do, is to look for alternative means to generate money, instead of fighting OTT operators. The regulator on the other hand, must not do anything that could stifle technology growth in the country,” Jemdahl said.

According to him, over the years, technologies have been evolving globally and any attempt to regulate these technologies in some countries of the world, including African countries, would mean stifling the growth of technology in such countries. He therefore, advised telecoms operators not to feel threatened by the services rendered by OTT service providers, but should begin to think of innovative ways to serve their customers, without running out of business.