There is a generation of difference between Africa’s approach to the Findustrial Revolution and what we are seeing in many other established markets.
Young Africans, free from the legacy of the last generation of communications infrastructure, are creating new networks and new ways of working which benefit from the opportunities afforded by new technology.
The result is an explosion of imagination and innovation, as I saw at the opening of the latest Thomson Reuters Lab in Cape Town in October.
The lab is the latest in a series opened around the world at the key innovation centres, connecting the best of our information, intelligence and professional expertise with communities of coders, developers and entrepreneurs. Together we develop new ways of working, and new solutions for our customers. In Cape Town, our lab is at the Bandwidth Barn, run by the Cape Innovation and Technology Initiative (CiTi).
We are providing capabilities across the many disciplines that constitute data science, delivering tools, analyses, dashboards, visualizations and proof-of-concept applications. The innovators of Cape Town hub are bringing their ideas, experience and local expertise. Together we find solutions to local challenges, and find new insights into existing problems.
For Africa, the findustrial revolution, I think, will bring new opportunities and new wealth.
Previous waves of the industrial revolution arguably offered little for Africans: the work they brought was focused on extractive industries. Much of the existing railway and road network in the continent still follows familiar routes from inland mines and farms to the coast, where the goods were shipped to other countries.
Now technology is enabling young Africans to work together as never before. The continent has the fastest urbanization rate in the world – people are flocking to cities – and by 2034 it will have a working-age population greater than India or China. By 2020, half of the population are expected to own smartphones; by 2025, the internet could be driving some 10 percent of Africa’s GDP.
Already Africa hosts the world’s largest mobile banking and payments systems. M-pesa is now used by 22 million Kenyans – more than 70 percent of the adult population.
Crowdfunding and peer-to-peer platforms across Africa have raised more than $32.3 million so far, a tiny proportion compared to the estimated $34 billion raised globally last year, and the more than a quarter of a million jobs created. With a clearer regulatory framework, this approach could overtake traditional equity-based fundraising and lending for the next generation of African entrepreneurs, quickly and efficiently.
Thomson Reuters is playing its part in supporting the findustrial revolution in Africa.
South Africa’s three main banks have adopted our Know Your Customer (KYC) managed service Org ID, taking a platform approach to performing vital customer due diligence and pioneering a model which has the potential to reach across the continent.
Working with local organisations and the Central Bank of Nigeria, we recently launched a Central Limit Order Book (CLOB) system for currency trading in Nigeria, creating an orderly framework for the market and automating immediate trade reporting to regulatory bodies.
And our own Bankable Farmer project is bringing together data, including mobile banking payments and regional crop yield data, to provide quasi-credit ratings for farmers who need to build a credit history in order to fund their work.
The findustrial revolution is therefore unlocking the perfect opportunity for Africa: at exactly the right point in the continent’s industrialization, the population and the technology are aligning to create a potential economic powerhouse, and new ways of supporting start-ups are providing both funding and expertise.
This is the opportunity I saw recently in Cape Town, and this is why I am looking forward so much to working with Africa’s entrepreneurs to secure future success for this extraordinary region.