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Digital economy for African SMEs

The pandemic has sped up the adoption of the fourth industrial revolution with many companies implementing automation tools to help continue production and keep their businesses going. The growth of the digital economy has made it possible for people to participate in local and global economies but how can the digital economy help strengthen African SMEs?

For the digital economy to be successful we need to consider the five pillars of the digital economy framework as highlighted by the Next Einstein Forum (NEF).

Five pillars of the digital economy framework

1. Basic infrastructure

For the digital economy to succeed in Africa we need to improve people’s access to water and electricity. We also need to ensure we have ports, airports and roads that are in good condition to handle the business which needs to go through them.

2. Digital infrastructure

We have good global mobile systems (GSM) in Africa and fibre optics is being installed. Internet coverage is strong in some areas. LiquidCom has created data centres in Africa which has grown our data storage capacity. Lastly, we need to review how data public service delivery is worked within the continent.

3. Enabling environment

Do we have public buy-in with digital technology? Many people, especially the older generations are still sceptical about how technology can be used to build a brighter future. We also need regulatory policies in place to protect businesses and people from cybercrime. Another area to consider is where is the investment coming from. There are many global companies investing in Africa to help them to participate in the global economy. Finally, there are many financial instruments available to help grow the digital economy in South Africa.

4. Enabling technologies

There is a multitude of technology available to help build the economy, but we need to ensure the foundational technologies are firmly in place. These are cyber security, cloud computing, big data analysis and artificial intelligence. Then we can look into blockchain, Internet of Things (IoT) and 3D printing. Most of these technologies are already being used in Africa. Lastly, we can look at robotics, biotechnology, and energy storage. By learning about these technologies, we can use them for unique cases in Africa. One way is through drones being used is in Rwanda is to deliver blood where it is needed.

 5. Human capital development

Get the human capital ready to take advantage of the digital economy. This needs to start in schools and vocational training. Google offers a free platform to help grow your digital skills at your own pace. Now that we have attained the knowledge, we need to use that knowledge for further studies on how to manipulate the technology to suit our needs. This can be done by people doing doctorates or masters, and researchers. Entrepreneurs also play an essential role in using technology in a unique way. Finally, we have knowledge commercialisation. This is done by digitally skilled employees and computer engineers.

By putting those pillars in place, we can hope to grow a digital economy that will be scalable and inclusive.

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