BY MEHARI BEYENE
Digitalization is crucial to advance technological services through means of boosting connectivity, so noted scholars in the field.
Regarding leverage high-bandwidth connectivity for cloud computing and large data storage infrastructure, Yilkal Abate, scholar in the field said that in order to entering into high margin markets, the availability of a redundant high-bandwidth connectivity will have transformational effect on the digital economy in Ethiopia.
With 5G connectivity and Internet of Things, and Artificial Intelligence have predicted to power the so-called 4th Industrial Revolution and the next wave of innovations around the world.
He said that Ethiopia will have a level playing field to benefit from these advancements. For example, by placing Ethiopia as a conduit on the east-west data pipeline that could possibly run to South Sudan and Central African Republic, leveraging the high-bandwidth connectivity of undersea optical fiber cables could offer the country a pathway to entry to high margin information communication technology sectors.
He went to say that cloud computing and data storage are two specific areas where Ethiopia could benefit with job creation and high-margin economic progress.
In the broad area of cloud computing, a high-speed and high-bandwidth access will give the necessary hardware infrastructure for developing software in promising applications such as Artificial Intelligence, machine learning, and Block-chain technology, among others.
He stated that in the area of storage, Ethiopia would be best served by providing reliable and fast network connectivity to large data centers operated by private multi-national cloud computing companies.
These companies already possess very competitive and optimized best-in class economies of scale to the underlying storage devices with extensive experience in abstractions on top of the raw storage medium.
Concerning to enter high-skill digital markets that Leverage Unique Strengths, he remarked that Ethiopia offers some unique advantages that could make it competitive in building high-skill based digital economy.
A critical mass of technology incubators has come online, at least, in Addis Ababa. There is already some promising trend and not infrequent success stories in Fintech, Agritech, Edutech, Healthtech, and eCommerce.
“Just like what has happened elsewhere, as technology lowers the barriers to entry for starting a business; many young people in Ethiopia will join the ranks of entrepreneurs.
Arguably, despite some significant barriers, there is enough evidence to suggest that Ethiopia is entering the “entrepreneurial age”. Further, it has also been clear for some time that there are some fundamentals that favor the expansion of this success to digital products high in the food chain such as software development.
He noted as “some of these factors are including favorable labor market opportunities. A large working population combined with the expected opening of the wider African market through African Continental Free Trade Area could contribute to building a significant and sustainable access to Ethiopian labor and products.
The other one is that large and growing internal market in addition to the regional and international markets. This is often overlooked; Ethiopia can potentially scale its tech devices manufacturing output by partly targeting its own large and young consumer base for phones, TVs, and other electronic gadgets.
As to him, value proposition of unique labor force is also another factor. The country offers an affordable and tech-friendly labor with a peculiar culture of algorithmic thinking that is conducive for software development. For instance, high-skill digital product developments where the above discussed enablers will be useful for contract manufacturing and development of software or high-tech Products & Prototypes, with its compelling cost advantage and the value proposition.
There is no overriding reason why some of the high-margin software product developments could not come to Ethiopia. There is already anecdotal evidence to support this.
According to him, it is also useful for export-oriented market development and business process outsourcing and knowledge process outsourcing. Ethiopia has compelling cost and demographic advantages in engineering service outsourcing, financial research outsourcing, business research, design and animation, marketing services, publishing outsourcing, legal process outsourcing, and market research outsourcing. Other tasks such as cleaning large data, processing photos, transcribing audio or video are now traded through online platforms and can form part of the BPO opportunities available for Ethiopia.
As to him, it is also helpful for international tradeshows. There is evidence that there is market for this, with Addis being the de facto gateway between Africa, Gulf Countries, and China. A growing number of Ethiopian event-organizing companies in this area have come online in the past several years.
For example, the international Artificial Intelligence conference the was planned to be hosted in Addis Ababa in April 2020 – thanks to the efforts of Ethiopian and Ethiopian-origin computer scientists, was a strong validation of the coming to age of Addis as an international conference destination.
He indicated that for these companies to succeed, however, startup legislation, matching funds and high risk capital, software licensing mechanisms, and regulatory alignments should be in place.
Ethiopia should also consider ahead of time the challenge that may be posed by acquisition of potentially competitive start-ups by big tech companies to ensure that benefits and profits generated by Ethiopian and African tech firms are not siphoned back to the parent company outside the continent, with the public and productivity benefits disappearing with them.
He adding said that a regulatory body to manage and monitor deal acquisitions and regulate when and how global tech companies acquire emerging and competitive Ethiopian companies may be required. Expand Start-up Ecosystem of Innovation and Job Creation to Secondary Cities should also be taking into account. Secondary cities have become the epicenters of the youth bulge.
At the same time, there has been very modest but nonetheless noticeable increase in manufacturing industry activity in these cities. Therefore, replicating the nascent growth of start-up ecosystems in Addis Ababa to these secondary cities like Adama, Hawassa, Jimma, Dire Dawa, Jigjiga, Sodo, Debre Birhan, and among others will contribute significantly to job growth in these areas.
The presence of Gen I and Gen II universities in these cities will be a source of a well-trained manpower. For instance, Debre Birhan, one of the Ethiopian “cheetah cities” which is currently attracting very significant interest from local and international investors is an ideal place to launch an innovation ecosystem and start-up incubation infrastructure due to the presence of a growing university and a thriving industrial park.
The Ethiopian herald January 1/2021
