Do African entrepreneurs have anything to fear from the future?
Do emerging markets like Africa have any reason to be afraid of new digital technologies like artificial intelligence, robotics and 3D printing? No says Madhur Jha, a senior global economist at Standard Chartered.
In her article published in the Standard Charted blog Jha says while there are several hurdles to technology adoption that emerging markets (EM) still need to overcome including lack of: investment in technology, infrastructure, power, and education; the benefits outweigh the risks, she says.
There are also concerns that technological advancements in EM could result in growing unemployment (especially the loss of cheap-labour) and rising income inequality in developing countries.
“On balance, new technologies offer greater opportunities than risks for EMs and could even help level the playing field with developed economies” she says.
She argues that tech developments could benefit the continent in a number of ways.
1. Jobs lost would be replaced by even better jobs
“While some manufacturing jobs will be lost to automation, new technology makes services more tradable, allowing these to become the main driver of growth”, says Jha.
Services such as IT and finance, and professional business services, such as marketing, design and management support, would mean much higher productivity levels and wages, she says.
2. Technological advancements could create brand new opportunities
“Technological innovations also often create new service sector opportunities. For example, the success of mobile money, or M-PESA, in Kenya has spawned a host of related services, including some aimed at helping parents keep track of school-fee payments”.
Jha points to the advantages of technological advancements in emerging markets particularly on health and education sectors.
“Large-scale open online courses are being used to train new nurses in Kenya, while digital phone photography is helping to help detect cervical cancer in Zambia.”
3. Cheaper digital technologies offer opportunities to leapfrog old technologies
Emerging countries can leapfrog old technologies reducing the cost of infrastructure, this she says. This is already evident in retail and banking, where smartphones, online shopping and mobile banking are already making a big difference, she adds.
“New technologies can also help EMs overcome resource constraints and make economic growth more sustainable with continued improvements in new energy sources, both fossil fuels and renewables at reasonable prices.”