The Fourth Industrial Revolution (4IR) is steadily becoming a reality in Africa even though the phenomenon is still embryonic. Below you can find the main conclusions and recommendations of the study. Want to read more? Download the full report.
- Of the 4IR technologies in Africa IoT/big data are most applied, followed by additive manufacturing, then AI, UAVs and Blockchain to a lesser extent. Africa is rather an adopter of existing technologies produced and developed elsewhere in the world.
- In 2019, approximately 6,500 technology start-ups were identified on the continent, among which around 10% develop 4IR applications (712 start-ups). These 4IR start-ups received $210 million of venture capital investments.
- Africa’s large population, which is expected to double by 2050 to 2.4 billion, presents both a source of data to feed innovation in 4IR technologies as well as a valuable market. There is margin for growth on the supply side as proposed products and services in Africa stand way below the estimated demand levels.
- Overall, the importance of export-led manufacturing will be diminished by these technologies, as manufacturing facilities will be relocated to developed countries. However, the two most promising sectors for 4IR market applications are agriculture and energy.
- Some enabling factors are however instrumental to improve the ability of a country to consume emerging technologies but, more importantly, to equip them to develop market applications, human capital, governance, policy & regulation, along with entrepreneurial & innovation support systems and access to finance. While African countries are classified as the group least ready for the 4IR, there are considerable differences from one country to another. Nigeria, South Africa, Kenya and Egypt, which are the economic leaders of Africa, are unsurprisingly the most dynamic.
- There are, all in all, three paths or scenarios for Africa and the 4IR. But the one providing higher benefits for Africa is bypassing other stages of development and moving directly to the 4IR, even though this path is paved with difficulties.
Recommendations for African policy makers and regulators
- Develop a united vision to seize the opportunities of the 4IR.
- Create incentives (financial, fiscal) for technology adoption in national priority sectors (e.g. agriculture and energy) and support small farmers to larger companies.
- Start to prepare the next generation Africa 4.0 workforce.
- Bolster or redesign existing governance institutions to better prepare for challenges posed by data circulation.
- Develop collaborative and adaptive regulation.
- Seek harmonization of data protection frameworks at regional level (REC) through compatibility between national legislation, based on a set of a core agreed data protection principles.
- Nurture inclusive institutions favouring and promoting widespread innovation to adopt 4IR technologies in productive and service sectors.
Recommendations for business associations
- Raise awareness and provide information about the potential for and the markets for technologies.
- Increase investments in training.
Recommendations for development partners
- In general, it is important to raise awareness among African governments that sustained public investment in scientific research and development (R&D) is necessary.
- Finance research projects on the impact of the 4IR on African economies and societies.
- Support the creation of regional R&D centres and foster linkages with international R&D centres.
- Support pilot projects for opening up data held in the public and private sector using public-private partnerships.
- Offer finance using blended finance and innovative financial instruments.
Recommendations for the African Development Bank’s (AfDB) internal operations (making AfDB a Smart Bank)
- Set an audacious digital agenda for the AfDB in its internal operations.
- Include a Chief Information Officer (CIO) function in the current Director of Corporate ICT position.
- Foster greater collaboration between the corporate ICT team and other (mainly client-serving) units of the bank.
- Monitor trends in the 4IR.
- Build on the current internal innovation initiatives such as InnoPitch and include a category of awards for 4IR technologies.
Recommendations to develop capacity within the AfDB on the 4IR in order to better respond to client demands
- Generate knowledge products specifically for the African context.
- Strengthen the 4IR/Digitalisation training through the African Development Institute (ADI).
- Incentivise innovation and foster experimentation with 4IR technologies within offerings to clients.
- Establish a community of practice (COP) within the AfDB, which has visible support from the president’s office.