Digital economy blueprint & the 4th industrial revolution

By Brian Omwenga

In the not too recent past, the unveiling of 5G technology had China and the United States locked up in a tussle that can only be interpreted as a jostling for technological supremacy. Elsewhere in Canada, Prime Minister Justin Trudeau announced the government’s commitment and funding towards quantum computing research. In the EU, legislation around data and privacy as well as attempts in digital tax (France) and control of the EU digital marketplace have been making headlines. Quite clearly, governments have become aware of the importance of technological autonomy and supremacy as a clear competitive advantage in this day and age.

The Digital Economy and the impending 4^th Industrial Revolution places us at a sublime generational nexus, which we cannot ignore. The discovery of the wheel in ancient Mesopotamia tens of thousands of years ago, heralded the advent of the Agrarian revolution (which some recognize as the 1^st Industrial Revolution). With the wheel, men were able to move agricultural produce using carts from one location to another, creating the ability to mass produce and bring the food to where they stayed rather than having to travel around in search for it. Organised farming practices resulted in formal ownership of land and a lapse of the hunter-gatherer practices. This was the advent of organised human settlement, resulting in the establishment of villages, and further inventions such as roads. Civilisations that mastered and innovated around inventions of this age soon became superpowers – Greece as well as the Persian and Roman empires.

The late 18^th and early 19^th Centuries saw the introduction of modern day economics. Adam Smith (1723-1790) (later recognised as the father of economics) in his book ‘Wealth of Nations’ set out the concepts of scarcity and competition. He famously said, “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Competition was identified as a phenomenon that existed simply because of the reality of scarce resources. Charles Darwin (1809-1882), the father of modern evolution theory, also based his biological theory of natural selection on the phenomenon of competition. At around this same period, the most popularly known industrial revolution was well underway driven by such personalities as Isaac Newton (1642-1727) and mechanisation through the discovery of the steam engine. Societies that took leadership and mastered the steam engine such as the British, formed empires that spanned across most of the globe. The introduction of mechanisation, and the understanding of economic forces, reshaped societies around industries, specialization and institutionalization as competition drove a new age focused on strategic advantage.

The early 20^th Century saw the discovery of electricity and the transistor. This anchored the next industrial revolution, primarily involving devices, semi-conductor chips and (digital logic) technology introduced to enhance and improve industrial processes. The United States was at the heart of this 3^rd revolution, which introduced the age of computing to the world. Personalities such as Thomas Edison (1847-1931), Graham Bell (1847-1942), Nikola Tesla (1856-1943) easily come to mind. Embedded within this industrial revolution is what is emerging and gaining recognition as a 4^th Industrial revolution. Underscored with connectivity, this new wave is primarily driven by data.

There are various lessons that can be learnt from the prior revolutions that nations can take note of. For instance, in all these revolutions, the societies that mastered the pioneered invention and quickly innovated around it, became or had the possibility of becoming a world super power and in some cases subjugated most of the world that couldn’t effectively compete. Another interesting observation is the character of the incremental nature that each industrial revolution had from the prior. Each new revolution, accelerated and added efficiency to the prior. The mechanised industrial revolution enhanced the agrarian revolution making it capable to cultivate bigger tracts of land much faster. The technological revolution enabled the prior industrial revolutions’ mechanised machines to work faster and more autonomously. And the impending digital revolution will make use of data to further improve both the technology, mechanized and agrarian revolutions. 

It is also important to note that each (industrial) revolution, although sparked by a particular invention, was sustained and enhanced through the application of that invention in innovative ways. The role of innovation in the wealth of nations can never be understated, and the chances of our generation participating in the impending digital revolution is hinged on our tech innovation capabilities.

The innovation process begins with the identification of an innovative opportunity either through basic or applied research, experience or identification of a socio-economic need. The innovator then generates an idea of how to solve the problem using available resources, and how to harness the innovative opportunity. The innovative idea progressively moves from the many unstructured, to the few tested semi-structured, and finally to the structured final solution that bears the label of an innovation. Innovations then have to be placed and used within the market as products.

Within the African innovation landscape the process of ideation through to the development of an innovation and finally a product in the market, exposes our innovators to various challenges. Although such challenges exist, Africa is still a hotbed of innovations, particularly in the ICT sector, yet due to the poor diffusion and absorption of our own innovations as well as these ecosystemic challenges, many of these innovations remain as a class of innovations scholars often refer to as hidden innovations.

As Kenya embarks on the definition of its Digital Economy programs, particular emphasis needs to be drawn towards the central role of innovation, and securing the primary resources driving this particular industrial revolution – data. Securing local innovative advantage require a clear and enforceable regime of intellectual capital. The role of the lawyers therefore is to take care of our stock of intellectual capital, which is at the heart of invention and innovation.

Other interventions can be derived from pointed strategies around the triple helix defining our national innovation system; government, academia and industry. These need to be indelibly stitched through a national driven project that places Kenya as the gateway and destination of tech innovation for the region and the continent at large.

As a nation, it is imperative to declare a technology moon-shot. This will be a collaborative project conducted at a large scale with the support of government, industry, academia and the general public. This overarching leader driven project will pull along the innovation systems triple helix necessary for the establishment of a sector. This project can already be tied to any of the current Big 4 government projects. A clear lack of a technology driven or leveraged priority within government betray the lack of vision and an emphasis of fixing historical misgivings. The government’s Big 4 offers a perfect opportunity of investment in tech innovation that the country will reap for ages to come.  

As well, the world of academia needs to focus on the development of high tech skills and the involvement and inclusion of as many within the academic circles as is practically possible. The 4^th industrial revolution will be squarely dependant on STEM courses (Science, Technology, Engineering and Math courses). Clearly our STEM courses lack inclusive involvement particularly of women, therefore as a 2^nd point of intervention, women in technology particularly in their STEM training needs to be encouraged.

Further, Government needs to spearhead a top-down digital transformation by embracing innovative governance and the effective use of technology. Digital government needs to offer leadership in best practice of digital technology application. Government leadership should establish a tech driven narrative diffused to its citizens young and old (just like Estonia) for purposes of turning and maintaining the country as a tech leader.

Finally, the tech industry needs to support each other to a level of scale and sustainability before engaging in fierce competition. Coopetition encourages the cooperation of tech start-ups at their initial and seed stages, and later competition when innovations have successfully made it to market. The use of tech cooperatives need to be explored, for purposes of harnessing the collective bargaining and economies of scale such cooperative structures have offered to our agricultural and other sectors.

The success of all this is hinged on our leadership; individual, communal and political. We all have a role to play. The Digital Economy and the 4^th Industrial Revolution places you and I at a sublime generational nexus, which we cannot ignore. Future generations shall indeed hold us to account.