Changing landscapes – the impact of digital

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Here is a different view of the effect of digital on the landscape of traditional business models.  Almost certainly an opportunity for low costs new banking models, giving African countries an opportunity to find parity in the landscape where resources are often controlled by large financial institutions.

Read the blog post here.

http://dreamingofdigitalsheep.com/

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A democratic Africa – a basic economic model

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In business terms innovators always want to be the next disruptive innovator.  A disruptive innovator, let me deal with this first.  A disruptive innovator is someone who changes the way business works.  Not innovation with incremental improvements in an existing industry but someone who creates a whole new industry.  Of course people will challenge my definition, but without making it to complex a simple example may help.

Compact disks created innovation in the music industry, a massive step over vinyl, but in essence a step up in technology.  This is not a disruptive innovation, it was a logical progression for the music industry.

Friendster and others, created a new business model.  Social media – an engagement platform for friends and family. Facebook has gone on to turn this into a business model which was unthinkable 20 years ago.  This is a disruptive innovation.

Here is the thing about building disruptive industries.  These industries create employment for millions of people.  Think about how many people are employed building web sites, running advertising on platforms like Facebook and other technology innovations from the last 4 decades.  Not only is employment created but employment with great opportunities that prioritise skill and knowledge over raw power.  In other words brain power versus muscle power.  With the greater level of brain power the higher the standard of living.

You may read this and think, well this is not true.  I agree, it is not always true.  Look at how much sports stars are paid.  But in reality this is a fraction of the population.

To get back to the title of this blog post.  It refers a democratic Africa as the only viable economic model.

Well here is the major point.  Africa needs disruptive innovators.  Innovators which lead to the creation of millions of jobs.  My point is that it is just not going to happen unless there is an environment that fosters this.  I believe the only environment is a democratic environment.

Thousands of youngsters dream of making it really big. Bringing an idea to life and changing the world.  Improving their thoughts into something material that makes the world better.  Some do this every day now, but not by creating a disruptive industry but by working in industry that is established and one that was once disruptive.

The problem with working in an existing industry is that all industries are dominated by capital.  Capital runs the world in reality.  If you have capital in your economy you will have industries which employ people.  But mature industries want to drive costs down so capital is always looking for cheap and inexpensive labour.  One where a little bit of brain power is required, but not a lot.  Stamina and desperation are better.  Workers who need to work for meagre wages to survive.  Add this to the fact that the capital comes from well- developed industrialised countries and all the effort the worker puts in ends up returning the real returns back to those who already have the capital.

The key is to break the cycle of capital dependency by creating new industries, one driven as a disruptive innovation and then build it into a Microsoft or a Facebook.

Here is where the problem lies for Africa.  Disruptive innovations require 2 essential components to be successful.  Firstly, an environment which is stable and breeds innovation.  A place where people can go, congregate, collaborate and work with their ideas aiming to realize them.  Yes, you may have a crazy inventor in a garage but the best models are one where people share thoughts and ideas.  Where the thinking is progressive and informed.  Explicitly this implies some level of education.  People need to be enabled to go to school, to learn and to foster the right attitude.  The second ingredient is once again capital.  Innovators need backers.  People with strong business skills that know how to commercialise a product to sell in the world.  People who have money to turn the innovation into a commercial success.

Okay, so the problem is clear – you need a strong education system that encourages broad and diverse thinking.  People need to be capable of going to school to learn in a stress free environment, free from discrimination and free thinking even if this is contrary to accepted norms.  Let me deal with the proverbial elephant on the page – this means that there can be no limiting factor, be this religion or gender or social standing.  Everyone goes to school and everyone can say and think what they want.  The more people doing this the more likely the hot bed of innovation will grow.

The problem is that you also require capital.  I mentioned existing industries.  Well existing industries bring capital to economies.  This means that economies need investment to bring capital.  One thing that capitalists don’t like is volatility.  They don’t like civil wars, religious violence, rampant corruption and political bullies.  Look at many countries in Africa to see how devastating the lack of capital is and how stagnant economies are – places like Egypt, Libya, Sudan, Zimbabwe and the Central African Republic.  The list goes on and on. It is not likely that large capital injections are going to appear overnight in these countries.

From my argument I cannot foresee any of these economies becoming or developing the next silicon valley.  Arguably this is the best place to be in the world if you want to see innovators in full flight.  A place where free thinking is the most valuable commodity on the planet.  The free thinkers are there, so what else is there.  Capital.  The venture capitalists are there by the dozens.  The free thinking brought them.  The capital did not bring the free thinking – nope, it happened the other way around.  Many countries have lots of capital – the gulf states and obviously China are good examples.  But these countries don’t value free thinking.  They value cheap labour, innovating in existing industries where they can drive costs down.

So innovation materially requires free and liberated thinking. It is an absolute. I believe it is a non-negotiable.

If Africa was a person here is what I would say – “Listen up, get to it.  Build a democracy, where greed and corruption are dealt with.  Where wars cannot flourish.  Where people can be free in their faith without fear.  Where everyone goes to school.  Free thinking my friend, be free.  Yes you may be scared.  The horrible news station may say something bad about you.  You may go to jail.  You know what – to stop this from happening – just stop doing bad things.  It is that simple and let everyone be free.  Everyone, not just your friends and cousins and generals.  Everyone.  Only then will the economic dependence on oil, minerals and agriculture change.”

Can Africans afford smart technology?

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This has been an interesting year for me.  I have been fortunate to travel to various countries on the African continent.  I have had time to reflect on this and here are my thoughts.

My expectation on the continent was to discover very little technology.  This is not true.  I was astounded to see that in some countries the speed and diversity of access to internet and array of smart technology was excellent.  The technology is available but the access of the technology to the general population is limited.

If you have the opportunity to visit a country such as Angola the harsh realities of living there sink in.  There are currently more than 176 land mine fields.  This is a legacy of their civil war that only ended just over a decade ago.  The effect of this is inability of the agriculture sector to produce large scale commercial farms.  Almost all of the food is imported.  In addition, the country has an array of natural resources, mainly diamonds and oil.  The result is the emergence of a super-rich class who have made money from the oil industry.  This is however only a fraction of the population.  When you move around Luanda, the capital of Angola, there are more than a million people living in one of the largest squatter camps in the world.  This is by itself anomalous.  Luanda is the most expensive city in the world.  I did not believe it until I was there.  It is definitely more expensive than New York or London.  There are suburbs in the city (such as Talatona), modern and well appointed, surrounded by squalor.  The average Luandan struggles to survive and even many of those who have employment live in shacks.  A rental income for a 2 bedroom apartment is in excess of USD7,500 per month.  A single tomato costs USD2.50.

The impact of this is that buying smart technology is not really an option for the mass population.  Possibly a small group of people can afford this, so having the technology available is to a large degree pointless.

The basis of living changes from country to country as the economies are different, but the story is the same.  Malawi is struggling with massive corruption and interest rates above 30%.  Small businesses struggle to flourish and economic growth is difficult.  People are employed, but the day to day living of the average Malawian excludes luxury purchases. Smartphones are simply out of the reach of Joe average in Malawi.

Cell-phones are however pervasive across the continent; these are predominantly functional phones.  Smartphone penetration in the market is limited and I think this reflects the recent sales reports from the major manufacturers that show that they are not meeting sales targets.  Smartphone penetration is approaching a point where growth in sales will probably reflect growth in economic value terms, linked to GDP.

I keep wondering if this is unlikely to change.  I would think that at the moment there are really only 2 ways for this to improve.  Rapid economic growth or a rapid reduction in smart technology prices.

I personally do not think rapid economic growth is likely in the next 5 years.  My rationale for this is the skill level of many Africans.  In essence those that are educated are employed.  When you look at the availability of education in the African countries it is extremely limited and is really only available for those who can currently afford it.  This means that unless there is a shift in government policies not enough Africans will get educated to transform the economic landscape. Economies will remain driven by minerals, resources and agriculture.  The exception is the banking sector with the banks entering the markets and I believe influencing the development of the economies on a large scale.

Simply put, there are not enough tertiary training institutes of quality to create skills that are competitive on an international scale.  There are not enough engineers, IT professionals, accounting professionals and professionals who work in government to bring about social services for the populations they service.

This then leaves a reduction in prices.  Will prices come down?  Maybe a simpler device with less features and longer battery life?  Looking at the manufacturers who produce devices, this seems unlikely, but maybe I am not seeing something.  What do you think?

Control of the internet. A must read.

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The purpose of this blog is not to rehash what is being said elsewhere. This is very important as it has the potential to impact everyone.

http://www.zdnet.com/fcc-to-congress-u-n-s-itu-internet-plans-must-be-stopped-7000010835/?s_cid=e550

Into the future we charge

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Predicting the future is probably the most intensely inaccurate thing that anyone can do. I am making this statement after over-hearing a conversation between 2 project managers. They were complaining about the research out of Oxford University that essentially found that project managers are inadequate at estimating cost, benefit and time for the organisations they are employed by. These gents were seriously unhappy with the article.

(http://www.sbs.ox.ac.uk/newsandevents/releases/Pages/Foolsandliars.aspx)

Do I think Professor Bent Flyvbjerg is right?

I don’t know; my gut feeling is that he is probably right and here is why.

Arthur C Clarke writes that “Any sufficiently advanced technology is indistinguishable from magic.”  This statement by itself is thought provoking.  It is not that magic is false or driven by technology (maybe it is – who knows?) but rather that the lack of understanding on the part of people who have no comprehension of what is before them makes the technology seem like magic. Think about it like this, look at your choices in life and what you think you are an expert at and possibly really good at.  Then think about what you really know nothing about.  When you think about stuff you really know it is easy to comprehend and understand and things which are similar to it may make sense.  You may recognise patterns or have a way of seeing things.  The opposite applies to things you have little or no understanding of.  A simple example – I am fascinated by the idea that a large aeroplane, like an Airbus or Boeing can fly and stay up in the sky.  I have a rudimentary understanding of aerodynamics but I cannot comprehend how these large machines are engineered or the complexity in the safety procedures.  All I know is that when I fly I have blind faith that the people who built it, tested it and said it can do what it does, are right.  Every time.  It is wizardry to me.  I have the same fascination with many things in the world every day.  The boundaries of my knowledge or not unlimited but are rather limited by my personal understanding.  Worse still is that I am happy to hazard a guess as to why it happens.  I am sure that often my guess is as valuable as saying something like, “the fairies keep the jet up” because it is probably that inaccurate.

The key is recognising this inadequacy and trying to plan for it.  The US military refers to the idea that there is information and knowledge that they cannot plan for in their scenarios. They call it the unknown unknowns.  It is a brilliant idea.  We know we don’t know everything and we know that things and ideas will emerge that are not yet thought of, but let’s be open to them and plan to include them when they happen.  Our scenarios can get better and maybe our adaptability to new technology will ensure we stay on the forefront of technology advances.

Essentially I am saying that project managers cannot predict the future as they just don’t know what the future holds. Of course I have set out an argument here without empirical evidence to support it.  I am rather relying on personal experience.  So let me make it more practical.  Predicting the future becomes more inaccurate the longer the time line for the prediction.  The further into the distance the less accurate you will be.  A quick mind game will highlight this.

Think about what you have planned for the next 3 meals.  You will probably think, dinner at home, going out with friends, a sandwich for lunch, canteen, whatever.  Now go into your calendar and go forward 7 days and do the same plan and then go forward a year and do the same plan.  So you now have 9 meals set-out.  Put a confidence mark next to each one in terms of how certain you are that this will be the meal you will have.  High equals very certain, medium equals maybe and low, no certainty at all.  I am willing to bet that the meal plan you have set-out to happen in exactly 12 months will have a low next to it.  This is not true for everyone but for me it most certainly is.  I cannot think that I will be in the same place in 12 months, that the food I am in the mood for will be the same, that my health will be the same, that my circumstances will be the same (I may change jobs, be travelling, have meetings that prevent me from having that meal), and the reasons go on and on.  Eating is essential to our survival and the complexity in making this simple prediction is enormous.  You can do it with many different things, your transport, your clothes you will wear, your job and so forth.  Each one on its own has complexity that is not particularly complex (these are not passenger jets after all) but you can understand them as they are personal attributes you have a strong affinity with.  You can make the scenario even more complex; now try to predict all the things in 12 months’ time at once.  If you had to assign a confidence level to this super-prediction, you will probably be looking for something less than low as an option.  You may argue that some are fungible and change a lot. Take clothes; forget about if you buy new clothes or not, just assume you replace your whole wardrobe but to simplify it assume you will wear pants in a years’ time.  What colour will they be?  What colour will your shirt be? Will it be raining? Snowing? Heat wave maybe?

So now take someone who is not intimate with the subject matter of a project and inject technology into it.  Technology that for all intents may as well be run by fairies as this the understanding that the project manager has.  Ask them to do a costing, a benefits plan and how long it will take, and I am willing to bet that in 12 months, they may as well have made a paper aeroplane out of the proposal and flown it out the window.

Of course this may turn out to be false and the better the project manager and their understanding of the complexity of the technology and realising that there are unknown unknowns and having a plan to deal with them may make the forecasting better.  Getting the right people can turn the technology from being a piece of magic into something understandable. But is this then not an acknowledgment that maybe you don’t need a project manager?

So what I think is this.  I would be a terrible project manager to engineer a new passenger plane – I mean where do you get fairies from anyway?  I also think that technology is growing every day in ways we cannot comprehend and if you are prepared to acknowledge that you don’t know everything and that you are willing to deal with the unknowns, you have a shot at making it success.  Ultimately it is about getting the right people who can maybe just see things a bit differently and just maybe Professor Flyvberg will be seen to be wrong.

Today though, it is often about politics and who you know, not what you know.  But this is also just my opinion. I did after all say this is only my gut feeling.

Where are all the grasshoppers?

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At the beginning of the twentieth century a young woman was born in the USA.  Her name is Grace Hopper and she was a genius. Grace Hopper grew-up in an era where she lived through a world-war (she was a naval officer in the US Navy) and worked in a heavily male dominated environment as a computer scientist.  Her brilliance ensured that she was recognized for her ability and not limited due to her gender.  She lived in a world where woman struggled to compete with men on equal terms, yet she advanced and made contributions to society that influences much of the way we live today.  She faced similar struggles to many women on the African continent.  

Those of you reading this, with a deep interest in technology history, specifically of computer systems will know who Grace Hopper is. Grace Hopper’s contribution to computers is arguably as influential as Bill Gates or Steve Jobs.  She advocated the idea that computer programming languages should have syntax closer to English than machine code. She changed the way computer programmes work and essentially made it easy for computer programmers to be trained without necessarily needing a university education. She literally created a new industry that has created employment for millions of people and influenced technology evolution forever. 

It is this kind of brilliance that Africa needs. Africa needs to find a Grace Hopper.

Grace Hopper had one huge advantage growing up in the USA as opposed to a modern African woman at the start of the twenty-first century. She still had access to better infrastructure, education and opportunities than most African woman have a hundred years on. 

The African continent lingers behind the rest of the world in almost every key indicator; GDP, internet access, human rights, gender inequality, infant mortality rates, and the list goes on.  Africa needs someone to emerge and to become a technology changer on the African continent.  It seems as if Africa, and possibly South America, are the only densely populated societies to not have contributed to the field of computer science in a substantial way.  There are exceptions but there does seem to be more to this than just an under-developed field in African societies.

The African continent has structural issues across every aspect of life.  Africans generally lack infrastructure to support educational brilliance and to identify talent to ensure that these individuals have the opportunity to excel.  In some countries, the lack of training is so severe that the computer science courses are not available at any universities anywhere in the country – such as Mozambique – or the computer training department at the university is combined into another faculty; the computer training skills are so insignificant that providing adequate resources to students is limited through lack of knowledge or budgetary constraints – such as in the Congo or in Angola.

The ability to identify possible talent is limited.  Never mind the issue of over-coming the lack gender equality in many African societies, the reality is that even if a person of brilliance wanted an opportunity to enter the technology sector there are only a handful of countries on the continent that could create a path for the person to rise up out of the poverty, overcome the frequent political instability and the many cultural issues they may face.

The title of this post in some ways has many meanings related to all of these points.  The obvious relates directly to Grace Hopper.  My thoughts are directed towards her and how we can develop more Hoppers?  I see a grass-hopper as a wonderful thing.  It is a creature that can fly and as a predator can be veracious, wiping out crops and dominating landscapes.  It would be fantastic if Africa could develop an industry that dominates the international landscape, much the same way the Indians have done.

But grasshoppers in African folk-lore have other meanings too.  The fable about the argument between the toad and the grasshopper which caused a rift in their friendship when they could not dine together (read it at http://worldoftales.com/African_folktales/African_Folktale_6.html), is a simple and effective analogy to highlight the differences amongst diverse African societies.  Differences we need to celebrate together to create the opportunities to allow the continent to develop a Grace Hopper, a Bill Gates or a Steve Jobs.  The differences should not be a reason why we point fingers at each other or fight wars.  Our differences are what make us unique and create the opportunity for brilliance to emerge.

There are more stories, but the point is this.  As Africans we need to come together and create opportunities for the information technology industry to grow.  No one should be excluded from partaking, regardless of their gender or culture.  As individuals we should hold governments accountable to put the mechanisms in place to grow this industry. We celebrate the ‘greats’, a Bill Gates and a Grace Hopper.  We need to find our own greats and then celebrate them. This is what I think.

Facebook: The same revolution

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The title of this post may seem strange, normally you would want to see something like “Facebook: A new revolution”.  A revolution is change; a massive upheaval in the way we live or the way society functions and is often associated with political change.  Right now you are thinking what is he going on about?

The idea that technology can improve the lives of those of the poor is not new.  The fundamentals of the advancement of society can be found in what is known as the “Idea of Progress”.  This theory emerged during the Enlightenment and defined many of the ways Western Liberal societies work today!  Equal education, gender equality and principles of the Libertarian doctrine owe something to the “Idea of Progress”.  People talk about seers and predictions but arguably the greatest predictor of change was Condorcet – some of his predictions include the disappearance of slavery, the rise in literacy, equal rights between sexes and more.  He made these predictions by projecting how society and culture will change, evolving to a higher level by improving education and eliminating poverty.  Powerful thoughts and a vision of what can happen when society progresses. As society becomes more ‘civilised’ the opportunities for everyone improves and we progress as a collective.

Anne-Robert-Jacques Turgot, best known as an advisor to Louis XVI, economist and statesman argued that society can advance and progress and to do this, society needs tools to do so.  The use of technology can help build a better society for all. He proposed improving the life of the poor in France by using civil engineering technology to build infrastructure (sewers and clean water delivery) to support the peasants of the time.  This idea was shot down (why would the peasants need this?  Money should be used for the Kingdom and to fight wars!) and was one of the reasons Turgot became a threat to the royalty in France.  It would be naive to argue that the fall of Louis XVI and his subsequent beheading was due to his unwillingness to use technology to advance the life of the poor.  The French Revolution was more complex than this, but had the peasantry been living an improving life would the revolution have happened in the same way?

The idea that technology combined with human ingenuity and the ability for us to stretch the boundaries of our knowledge is prevalent everywhere.  The way we teach students and learn ourselves, is down to the development of the printing press.  The printing press revolutionized the way we pass information from one generation to the next and accelerated our ability to learn and innovate.  It has influenced the way we live, the way society is organized the ability for ideologies to explode and flourish.  Without the written word, our ability to have electricity and subsequently computers would almost certainly be impossible.  Think about what you touch in a day – your cell phone, your office phone, your computer, the mode of transport, your entertainment, banking, utilities, even the clothes you wear probably involve some sophisticated chemicals or process of manufacturing.  Technology surrounds you in more ways that you can possibly think. If you are reading this, you will probably think that your standard of living is better than those who lived 50 years ago and almost certainly better than those 200 hundred years ago.

So when the Arab spring happened, the role social media played in this and the use of instant messaging and Facebook for people to share ideas is just the natural progression of what technology has brought to society collectively over the last two centuries of innovation.  The explosiveness and force of change has been accelerated but it is in reality the growth of the seeds planted in the past.

It is just the same revolution.