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A fair business environment creates cheaper products for the African consumer, and this holds true for IT and network costs, says Olivier Suinat of HP.
 Comments on Africa as a region
It is difficult, and indeed inaccurate to classify Africa as one region. Countries vary widely and have a hugely divergent government and policy structure. It is also questionable whether Africa wants to go the Asian route with exploiting its workforce. All indications are that this is not what its intention is. Africa would like the benefits of technology, but without the extreme cost in human terms. A history of workforce abuse has led, in many countries, to government legislation that protects employees and sets minimum wage standards. This means an Asian model is unlikely. Africa wants to educate its people so that they can support themselves and grow the continent’s economy. This means some shift in policy will be necessary. Many African governments are actively encouraging private investment in the ICT sector through the liberalization of their respective markets. However, a militant attitude in some other countries towards foreign investment also limits these opportunities and much remains to be done particularly in respect of the “punitive” duties levied on ICT hardware and equipment.
Expanding IT infrastructure and reducing network costs would help African business efficiency and enable African governments. How can governments encourage business investment to expand Africa's IT infrastructure?
Government can ensure a business environment that favours competition in the IT industry, it should provide a secure and peaceful market environment and the consistent respect of the rule of law. Fair competition inherently creates better and cheaper IT infrastructure for all classes of customers, including network costs. We have seen that time and time again in all countries we are operating in. Security and rule of law are obvious for the long term investments that are required. Although I do not like to generalize, I have not met for years an African executive in a competitive market that looked at IT as optional. IT is an integral part of the success strategy for any business, whether it looks for growth or cutting costs.
African governments will also help tremendously by leading the way, as role models, in using technology themselves to serve their citizens better and more efficiently and in running its administration by using up-to-date technology.
The regulatory environment is a crucial facet of the overall investment climate. Technological advances such as VoIP, Wi-Fi, and future WiMAX present both challenges and opportunities for the regulators to further develop their objectives. |  |
"...I have not met for years an African executive in a competitive market that looked at IT as optional. IT is an integral part of the success strategy for any business, whether it looks for growth or cutting costs. "
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Getting massive mobile penetration growth is a first step, but to achieve broader internet access throughout the society, reduce access costs in general, policy makers must facilitate the way for regional infrastructure initiatives such as Comtel, Rascom and EASSy.
How can the internet and new technologies help businesses and government improve their management?
If management improvement means improving shareholder value, offering efficient and streamlined services to the population, and transparent management practices, then new technologies and internet-based connectivity are at the heart of it. Doubling retail branches for a bank, GSM phone outlets for a telecom operator or shopping outlets for a retailer cannot happen without a strong IT strategy. Productivity improvement, compliance with international accounting requirements or building transnational partnerships cannot be done without strong technology adoption.
But the best IT will not replace management vision and implementation capability. We need stronger and stronger management teams to champion these transformations.
According to BMI-T (2005), overall the African market is now about 70% mobile, indicating that the continent is more than prepared for the technological quantum leap to the next generation technologies.
What obstacles prevent an increase in the use of these technologies?
Bandwith costs are going down with market adoption in Africa as in any other market. Device cost remains an obstacle, but many form factors have now emerged lowering access prices. Beyond the traditional desktop-based environment, mobility devices are growing rapidly in Africa. Africa is the fastest growing market in the world for GSM handsets and IT mobility devices such as laptops. PDAs are growing at over 45% year-on-year. IT education and availability of regional languages often slow down adoption.
We should not forget ICT is only an enabler to a strategy for the achievement of a goal. New technologies are adopted faster in a change management process when its contribution to the greater purpose is clear.
The liberalization of the “siloed” mobile GSM sector is likely to continue, albeit to the detriment of the fixed sector which has deepened the digital divide in respect of internet access. Fixed wireless offers some hope.
There are a few bright lights in this regard such as South Africa, where the strengthening policy/regulatory environment should result in increased overall use of these technologies. Broadband services are starting to make an appearance: ADSL in South Africa, Senegal, Ghana Egypt and Tunisia; wireless in Nigeria, Kenya and Democratic Republic of Congo. However, pricing remains restrictive and out of reach for many. The number of users is steadily growing, and the most common form of access remains the ubiquitous internet café.
What are the key skill sets needed by companies in Africa today and how can African business schools better prepare graduates for a global business environment?
The small to medium-sized business is the future of Africa and entrepreneurial development is possibly the biggest growth opportunity for Africa. This is where business schools can really create a unique education model. Millions of Africans can find employment this way, and potentially eradicate poverty and grow the economy. Entrepreneurship training is vital in this regard. Also, IT has become a global commodity, and is critical for businesses, big and small, to compete and succeed, therefore basic IT and business skills are required across Africa. Noble developments, such as the NEPAD e-schools initiative, ensure that ultimately millions of Africans will become IT literate by having access to ICT. HP sees ICT as a critical economic enabler – especially for Africa.
In today's global supply chain, companies are increasingly locating production facilities in countries with labour cost advantages. How is Africa adjusting to competitive pressures from Asia? What is needed to make the African labour force more competitive?
Let’s first agree that, as an objective, primary and secondary schooling is a must for our children. The African labour force needs to be more competitive in the areas where the continent can differentiate itself, not compete head-to-head necessarily with the other economies.
Building labour force alignment to a country’s growth strategy requirements is hugely challenging. As an example, Africa has a tremendous natural resource base. It ranges from unique agricultural production capability thanks to its climate and biodiversity, to extractive minerals, to some of the most beautiful tourism opportunities in the world.
Building incremental value around these unique raw assets towards, for example, more food transformation taking place on the continent for further export, more oil and gas transformation capability, more world class tourism infrastructure, requires an aligned educational system.
Another example, North Africa and several countries in Sub-Saharan Africa are becoming major support services call center hubs for Europe thanks to the pool of talent available and strong ICT infrastructure. Africa is also a large potential consumer market, often paying premium on imported goods. Asia went a long way to shift its mindset, reducing red tape and creating massive tax incentives. For Africa to succeed in this, it needs to follow suit, in terms of eliminating red tape and bureaucracy, whilst protecting the interests of its people. |
