Next Wave: What does a digital economy look like - Part 2

Or the physical anatomy of a digital ecosystem. [Read the newsletter in your browser.](=.AuYWhqr8ZD1W0gJfJqBv4_H0LQJwIFv6DPcSgQw6Z7I) [TC Daily Logo] 9th October 2022 A digital economy is unachievable without infrastructure Photo by [Shubham Dhage / Unsplash](=._zffsrB6aHJqnZH9R7CekQb6awO2S6Lf7tRXkOdQkKQ) What does a digital economy look like? Part 2. Read the previous essay [here.](=.2-_rgKi0c3aE87T5fOGwTdrVI-PV_OtE-hZfmI40rA4) --------------------------------------------------------------- Africa lacks the infrastructure it needs to create a sustainable digital economy even as its ecosystem manifests as a dependent outcrop of developed digital economies. It is a new form of colonisation, but even this digital colony is nothing like activists make it out to be. It is self-imposed; and only coordinated ambition can change this. Broadly speaking, digital infrastructure includes the connection networks that form the internet, fixed broadbands, mobile telecommunications, communication satellites, data centers, and more. Digital infrastructure also includes the tools and a vibrant talent pool required to create the pieces mentioned in the last sentence. On all the points mentioned above. Africa is severely lagging. And for the last two components of digital infrastructure—infrastructure creating tools and a vibrant local talent pool—Africa is completely missing. For example, Africa [hosts just two percent](=.Tfqq7IEmqYIOr_AKhLkXM8uBF8xfe0m52Z_CcJMQGow) of all the colocation data centres globally, and despite an increase in subsea cable landing that continues to grow, the continent has one of the worst inland broadband connectivity ratios in the world. TechPoint Africa [reported](=.UeVCiGhXQpxZ4n2lGO8XRaNtW-9HVM-pwS34FQ8PWYM) MainOne’s Funke Opeke as saying that the MainOne cable, with a capacity of 10 terabits only operates at 10% capacity, 10 years after the cable first landed. If African states are to participate competitively in the global economy, we must realise how much of a roadblock Africa’s internal digital infrastructure deficit is. An internalised deficit In my last opinion [piece,](=.itskEOHMOVZ6oUXscJqFYRd5503JUy43qqf2ZnfAqiM) I mentioned that Africa lacks a digital economy. A broader (and nicer) assessment would have been that Africa’s digital economy—what we call the digital economy, anyway—is simply an outgrowth of digital economic systems elsewhere. That is to say, we are piggybacking—building an entire digital ecosystem on top of a volatile collection of external geopolitically exposed infrastructure. In a perfect world, this is not a problem at least if you are trying to come up to speed. In a perfect world, African states would actually be trying to come up to speed. But the world is far from perfect. And Africa’s leaders in business and politics are resigned to the eternal fate of catching up. With grandiose statements about a digital transformation—that is really only digital consumption—as weak comfort. It is almost as if we have accepted our self-created fate and relegated political leadership on digital infrastructre to collecting dubiosly named “right-of-way” fees on fibre cables. The point of this essay is to argue for more ambition, more vision as opposed to a casual resignation from government to academics, entrepreneurs and even consumers. It is a tall order, which is precisely why I am making it. Africa suffers from a critical lack of ambition beyond good roads and respect for basic laws. A low bar does not encourage athletic progress—or any progress for that matter. Mobolaji Idowu / TechCabal Insights. Chart courtesy of: Network Startup Resource Center, TeleGeography, and European Commission. Having established that, let us proceed this piece with a question. What sort of infrastructure do you need to create a truly digital economy? Like any trade system worth its weight in global politics, digital economic systems are susceptible to great power rivalry. In my book, it comes only behind energy and food commodities. So, a truly digital economy will stand on three infrastructure legs: - Producer infrastructure. The tools that create infrastructure. - Transmission infrastructure. The backbone networks of digital systems. - Consumer infrastructure. How you and I receive, use and create digital services and content. Consumer infrastructure is often the focus in investment conversations about digital infrastructure financing in Africa. Transmission infrastructure readily comes up in investment considerations, but because of how niche it is, it is often given the light touch in conversations about Africa’s digital ecosystems. There is also an assumption with transmission infrastructure that Africa simply has to take (mostly choose between binary) what is available with geopolitical undertones. The result of this is that Africa’s transmission infrastructure conversation is oozing with geopolitical verbiage that charaterises great power rivalry. As China’s Huawei and ZTE build e-government platforms, 3G networks and national fibre networks across Africa, US-aligned technorati work to counter growing Chinese influence with their own initiatives. The missing voice—indeed the most important voice in the conversation—is an African plan for infrastructure that is sufficiently free from global risks. Partner Message [cybersecurity_conference-ad] Join career professionals and business leaders, and learn the latest trends in cybersecurity. Be positioned for success in today’s fast-changing world! Register FREE at the button below to attend in person or join online from wherever you are. [Register Here](=.YkiYt4pe5jB0i-Kmg9_0n9pYqrrCq_l1yTUCxcrMlrs) As if to help make my point, US president Joe Biden, earlier this week, introduced new measures that will, according to Western US-China analysts, “decapitate” China’s semiconductor industry. The semiconductor industry, a complex globally integrated value chain with its main output hubs in Taiwan and the United States, make up what I call producer infrastructure. Of course, Africa is nowhere to be found in that conversation. Some people think we should not think so far and should only bother ourselves with these complex infrastructure problems. They believe that if we focus on fixing consumption all will be well. Such a focus is defeatist and only breeds digital value extraction, from which politicians will collect rent and fees, investors will collect returns, a few lucky entrepreneurs make profit and the general society remain stagnant and uninspired. As I said earlier (albeit differently), the problem with aiming low is that you may shoot at your feet. Partner Message [AFTSummit-ad] We are delighted to announce our partnership with the Africa Fintech Summit for #AFTSCapeTown2022. Attend the summit for a chance to connect with fintech innovators, investors, regulators, and other stakeholders from around Africa and the globe. [Register Here](=.UvTimGzL_F7FBvs35oG1BagseGVxZwWwKJFWfqiymD4) Skills infrastructure The move by the US that “decapitated” China’s semiconductor industry earlier mentioned utilised China’s reliance on “skill infrastructure” from the United States. Almost overnight, China’s chip factories were brought to an almost standstill because the US asked talent to choose between a pay cheque and a US identity. Digital literacy is more than being able to consume digital services from a smartphone, or even to create these services. African universities need to reorient around the physics (literally and figuratively) of a digital economy and begin to become more than government-dependent centres of stagnated rote learning—or we’re not serious. At the same time, African economies need to grow enough to create significant room and demand for African talent. I admit that is a tough ask—nothing short of a miracle. But there is only so many Africans that will work or integrate elsewhere, because of the human disease of racism. And there is so much opportunity for African states to create an internally valuable digital economy that is also globally relevant and sufficiently free from geopolitical fallout. There is no vibranium, no Wakanda magic (sorry Ghana). We just have to think bigger and farther. With Paga, You Make Life Possible [Paga-ad] Join us on this journey to freedom aboard the Orange ship, to a place where you have control over what matters to you and where you can make your dreams come true. Making Life Possible is our expression of the focus on you taking control in your daily lives – you can make your dreams and the dreams of others come through with Paga in different ways. [Start Your Journey Here](=.CpT9qwEYLY3WGyJYh6Yhx36Au3UIF5NqTbLk-NUdgu0) Read: [Protocol is helping users navigate the DeFi and NFT space on one platform](=.jmkBd9_nOODH8hDzkpVXb57UcPDC6fngpsy4tMPi7AE) We'd love to hear from you Psst! Down here! Thanks for reading The Next Wave. Subscribe [here](=.003kDfHmKhiY-qAX9IMG0lnbSBUk0ak_qgtIh-SP0Ak) for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. 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