By François Candelon, Senior Partner & Managing Director at BCG, and Global Director of the BCG Henderson Institute; Hind El Bedraoui, Ambassador at the BCG Henderson Institute; Hamid Maher, Partner and Managing Director
Africa has a unique opportunity to develop its competitiveness through artificial intelligence (AI). From agriculture and remote health to translating the 2,000-odd languages spoken across the continent, AI can help tackle the economic problems that Africa faces.
Africa faces several known challenges in developing AI such as a dearth of investment, a paucity of specialised talent, and a lack of access to the latest global research. These hurdles are being whittled down, albeit slowly, thanks to African ingenuity and to investments by multinational companies such as IBM Research, Google, Microsoft, and Amazon, which have all opened AI labs in Africa. Innovative forms of trans-continental collaboration such as Deep Learning Indaba (a Zulu word for gathering), which is fostering a community of AI researchers in Africa, and Zindi, a platform that challenges African data scientists to solve the continent’s toughest challenges, are gaining ground, buoyed by the recent “homecoming“ of several globally-trained African experts in AI.
Yet, the central challenge that Africa faces in deploying AI is often overlooked: Africa’s biggest companies – its national champions– are not zealously championing the cause of AI or deploying AI applications widely, causing them to trail behind global rivals. The few that have invested in AI have incurred above-average costs because they have imported talent and technology. Moreover, these companies are using AI only in limited ways. With limited bargaining power vis-à-vis foreign digital giants, and having failed so far to develop local talent, African companies run the risk of being less competitive than their multinational rivals in their home markets.
Today’s company-specific AI gap will be tomorrow’s national competitiveness chasm. Unless African companies actively drive the development of AI, African nations will never be able to leapfrog global rivals. Other nations have benefited from developing country-specific initiatives. Canada, Israel, and Singapore, for instance, have become globally competitive in AI by creating linkages between government, business, and academia. So can Africa.
“From agriculture and remote health to translating the 2,000-odd languages spoken across the continent, AI can help tackle the economic problems that Africa faces.” #DevMatters
Tweet
Such a strategy would have two prongs.
One, by developing key AI applications and deploying them at scale, African companies could kick start the use of AI. Doing so would improve their continental competitiveness, and position them as major players in the African market.
Two, and more importantly, African companies can help create an AI ecosystem that will lower their development costs, help create AI applications tailored to local needs, and reduce their dependence on foreign companies. In addition to developing applications inexpensively and ensuring their deployment at scale, the African AI ecosystem could position itself as an attractive partner for global digital giants keen to enter the African market.
For this to happen, Africa’s companies can act on three fronts:
Create an environment in which AI can take root. Rigid regulatory systems can frustrate the growth of any ecosystem, especially if it needs to scale across national borders. By working with national governments, Africa’s business leaders can drive the creation of AI policy. Two years ago, for instance, Kenya’s government formed an AI and blockchain taskforce consisting of representatives from local research institutions, technology companies, and business. It published an insightful report on how to exploit opportunities in blockchain and AI for added efficiency in public sector processes and service, and called on the government to invest in blockchain and AI infrastructure, and promote start-ups in that space.
In addition, African companies can help formulate a trans-continental blueprint to guide AI strategy by involving academia, African institutions, and public sector companies. In 2019, Egypt led the creation of the African Working Group on AI, under the umbrella of the African Union, to develop a unified AI strategy across the continent and create a joint capacity-building framework addressing the skills gap there.
To gain trust in AI systems, Africans will need better ways to secure their data. African companies can help tackle the challenges of data privacy by laying down the norms that will govern how they collect, share, sell, store, and apply data, and by creating the requisite infrastructure, such as payment platforms.
Ensure access to data, infrastructure, and licenses. Only 40% of Africans have access to the Internet today, compared to 87% in Europe and 95% in North America. African companies have an important role to play in tackling issues related to connectivity and data access. Without reliable infrastructure, affordable data plans, and access to technology, Africa’s digital divide will only be exacerbated by AI.
African companies can meet their objectives faster if they work with each other as well as with transnational giants. In February 2020, for instance, Safaricom – born in 1997 as a fully-owned subsidiary of the Kenyan state-owned utility, Telekom Kenya – and Amazon Web Services (AWS) entered into a partnership to sell AWS cloud services to its East African customers. Safaricom, whose products include the M-Pesa mobile money product, became AWS’ first consulting partner in East Africa.
Grow AI talent. Developing talent will be critical for the success of Africa’s AI ecosystem. There is abundant raw talent on the continent: Africa is home to the fastest-growing population on the planet and the youngest, with 60% of its population under 25 years of age. The median age in Africa is around 20 years compared to 44 years in the European Union.
“African companies can help create an AI ecosystem that will lower their development costs, help create AI applications tailored to local needs, and reduce their dependence on foreign companies.” #DevMatters
Tweet
Africa’s national champions can find ways to train talent in AI, striking partnerships with global educational institutions for this purpose. For instance, Morocco’s Mohamed VI Polytechnique University and OCP Group have partnered with Ecole des Mines, Ecole Polytechnique, MIT, Columbia University, and École Polytechnique Fédérale de Lausanne (EPFL) to open several AI graduate and executive programmes as well as a new generation of coding schools in Benguerir and Khouribga. Innovative ways of funding human capital development will also need to be identified, with a focus on R&D that bridges the gap between academia and business.
African companies can ensure that other stakeholders – international organisations, financial institutions, and national governments – participate in building the African AI ecosystem by aligning ecosystem incentives. While business will cherry-pick the initiatives it needs, international organisations and development finance institutions will tend to focus on programmes with the highest ROI and those that contribute the most to socio-economic development. And governments will seek to boost their nations’ competitiveness by channelling development funds into AI enablement, forming consortia, and creating regulatory environments. Many African giants are state-owned, so policymakers will also want to strengthen public sector companies.
As the AI infrastructure expands and the use of applications rises, African companies will expand and grow rapidly. They will become a breeding ground for talent, which will force multinational companies to collaborate with them. Over time, as the cost of developing AI falls, it will expand the innovation potential of African companies, giving their global competitiveness a fillip.
The question then is not if AI can become a driver for Africa’s development, but how quickly it can be rolled out by Africa’s national champions.