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Digital transformation can drive our economic growth

UREPORT
By Ndirangu Ngunjiri | January 30th 2017

Kenya has emerged from the latest economic crisis, but it still faces many significant challenges among them youth unemployment, aging demographics, diminishing Foreign Direct Investment (FDI) since 2003, and a growing productivity gap with her competitors.

The productivity gap, in particular, is becoming wider due to high cost of energy compared to the developed countries.

The number of jobs for highly qualified people is rising annually, while the number of jobs held by low-skilled workers is declining.

Fifty per cent of jobs today require technology skills, and about three quarters of all jobs will require these skills within the next decade.

What can revitalise the Kenyan economy? The answer lies in the wave of digital transformation enabled by the industrial Internet.=

But in order to capitalise on this next industrial revolution, Kenya must embrace major technological change in new ways. The economy is digitising at a rapid pace, giving businesses the opportunity to operate more efficiently at lower costs. Yet we aren't seeing faster economic growth or productivity.

Creating a connected digital single market will help and it should be the priority of the Government.

Completion of Huduma centres and digital villages in all our constituencies could generate more billions of additional growth in Kenya and create thousands of new jobs, notably for young job-seekers, and a vibrant knowledge-based society.

With cloud hosting, for example, companies can access IT systems that are more scalable, flexible and secure than any self-run platform. Safaricom have remained the most profitable company in the region due to its innovations.

The industrial Internet can be the catalyst for a new Kenya “productivity revolution” helping to wipe out hundreds of billions of shillings of wasted time and resources across key Kenya industries. Productivity gains of even 1% will have huge impacts.

For several decades, digital technologies have been playing a key role in boosting the efficiency of process engineering and production processes. But digital transformation is capable of even more: It can revolutionise supply chains, disrupt conventional business models and create entirely new business models.

Digitalisation is changing the rules of the game. The digital economy carries the promise of unlimited opportunities, as the latest solutions for tomorrow’s economy.

The advent of e-commerce has empowered consumers, who can now source products from anywhere in the world or compare prices with just the swipe of a smartphone.

As consumers become more used to digital services, they expect to receive the same quality and flexibility of service in other industries. No longer is it enough for logistics firms to deliver a consignment on time, they now also need to offer a multiplatform service to both personal and business customers.

 

Standardisation, a robust policy framework, and education for skilled workers are also key efforts that need to come together to enable a Kenyan industrial Internet revolution. That is possible today. The industrial Internet is real and its benefits are tangible. Kenya needs to reach out and grab them.

New technologies can of course also be cause for concern. They lead to new ethical questions. Will automation and artificial intelligence replace human work? Of course, physicians are unlikely to be replaced in the near future. But what about packers, delivery agents or cleaning staff?

Expanding digitisation also creates new opportunities for cyber attacks. Helpful technology can become dangerous in the wrong hands, which makes the topic of cyber security even more crucial.

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