Digital innovation economy for business growth - Full speech by CEO, Margins Group

Nana Addo Dankwa Akufo-Addo, President of the Republic of Ghana, Ministers of State, The Diplomatic Corps, (Nii mei and Naamei), Chief Executive Officers, Captains of Industry, The Press, Distinguished Ladies and Gentlemen, all protocols observed.

REVOLUTION in the political parlance and context is quite a scary word. When it was used in France in 1789, it was followed by a lot of carnage and in the 18th century and 19th century, many Monarchies were toppled and the modern republican states were born in Europe. During this same period, the Latin meaning of the word ‘REVOLU’ which means ‘to turn around’ was happening to the industry. This industrial revolution is in its 4th Cycle and it is the age of DIGITISATION!

The 1st industrial revolution in the late 18th and early 19th century saw the shift from a rural agricultural economy to an Industrial one. It was the advent of textile, iron, coal and the Steam engine. The world economy expanded exponentially and dramatically.

The 2nd industrial revolution took off late in the 19th century and continued into the 20th century; Alexander Graham Bell’s telephone, Thomas Edison’s Light bulb and phonography, Thomas Newcomen’s Steam engine, the Wright brothers’ plane and quite many other inventions impacted the future of the economic expansion and created new industries that had not existed before then.

In these first and second industrial revolutions spanning over 300 years, Africa and Ghana did not participate meaningfully. First, we were busy fighting amongst ourselves, and latter selling our enemies, and sometimes our friends into slavery for short term profit, without regard for the long-term damage and consequences. The most visible negatives being an inferiority complex and a stigma that has now become associated with our colour and even persists up to today.

The 3rd industrial revolution departed from the Mechanical, Electric and analogue systems, devices and products and ushered in the computer age. This age from the 1980’s, saw the emergence of personal computers and then the internet, which created the Information, Communication and Technology (ICT) age

This 4th industrial revolution is the mother of all revolutions and will alter the world fundamentally and dramatically and as a country and as businesses we need to carve out a sound vision and be deliberately involved in a major way for the sake of our children and the generations yet unborn.

Imagine a $100 billion company domiciled in Ghana, that creates jobs for thousands of employees; a law-abiding corporate, able to lock horns with global behemoths. This is not a fantasy; this is the new reality where innovation is not restrained by unaffordable capital cost. The 4th revolution is here, it is the age of digitisation. A new reality in which a kid from Nima can hone his knowledge and skills to achieve global pre-eminence. This 4th time, we have run out of reasons to fail.

Mr. President, you have asked us not to be spectators in the governance of our country and we hear you. We cannot in this 4th industrial revolution be spectators or sit by to import knowledge and systems wholesale without Ghanaian industry and business’ significant participation. Our companies must invest in knowledge in this 4th revolution to grow wealth here in Ghana and keep it here, and our government must create the environment to promote our companies, based on merit and performance.

4TH INDUSTRIAL REVOLUTION AND ITS 12 ESSENTIAL ELEMENTS

1. The fusion of all knowledge and information, analogue and digital in libraries, physical and digitised into big banks of data covering all disciplines. The scanning of all available analogue information into binary format including voice, video and data, on to digital infrastructure has made knowledge accessible on demand, with the right access control to the right digital platforms of powerful computers networked across the globe. These big data banks can provide information on all subjects across all disciplines in real-time.

2. The creation of powerful algorithms can make sense of these big databases and provide information and knowledge on demand and predict with efficient accuracy the solutions and answers to most questions and problems at unbelievable speed with unprecedented accuracy. Such has been the disruptive influence of algorithms on how we make our choices that Ariel Ezrachi – author of “Virtual Competition” observes that “the invisible hand has become the digital hand”.

3. The growth of Social Media and the exchange of information between billions of people on the internet is also providing unprecedented amount of Data on people and generating billions of profiles of billions of people, their identity, their preferences, their ideas and their behaviour.

4. Artificial intelligence programs and systems connected to these vast databases can recognise patterns, predict outcomes and provide the right data for planning and for solving problems long before we know they exist.

5. The Internet of Things or machine to machine (M2M) intelligent interaction allows intelligent machines to talk to each other intelligently and to come to conclusions and carry out actions even whilst we sleep, further disrupting the way we deliver goods and services, and make decisions.

6. The increasing sophistication of robotics to a level never seen in human history enables robots to perform most of the tasks that humans can perform, mechanical and non-mechanical, almost like humans.

7. The fusion of all these digitisation technologies is not limited to just these but also has digitized maps with global positioning systems now map every square meter space on this earth, and accurately locate places on earth almost instantaneously.

8. When Steve Jobs created the App Store in a cloud, it enabled millions of developers to develop software for almost all human needs by dematerializing how our needs were fulfilled and allowing us to buy digitised contents through applications (APPS), developed and placed in virtual stores, and pay for them with electronic wallets, debit and credit cards, and of late with virtual cards, virtual bank accounts and digital money.

9. With Cloud computing, we can access all our information wherever we are on multiple digital devices from different clouds, anywhere on earth wherever we have a connection to the internet. We can create, store and share information (voice, video or data) across multiple platforms once we have a data connection with a minimum speed.

10. BLOCK CHAIN is an electronic ledger that is connected to multiple computers involved in a transaction each one recording simultaneously every block in a transaction with multiple validation by all computers involved in the transaction, these records cannot be falsified.

Distributed copies of the ledger done in real time ensures no one person can alter or delete a record not even the administrator. It is said that ‘Blockchain is for business, as the Internet is for communication’.

A tamper proof real-time digital ledger is the foundation of a transparent, validated, transaction ecosystem, and the beginning of a reliable and verifiable digital commercial platform. Bitcoin, the digital currency is based on blockchain.

11. TRUST INFRASTRUCTURE – The threats to a digitized age is the same as the threats to the material age. Thieves, criminals, terrorists and plain old bandits have also gone digital. The modus of these new digitised criminals is hacking and compromising of digitised infrastructure exploiting system vulnerabilities or identity theft.

Without a trusted and protected infrastructure, digitisation can cause great harm to countries and people, just as a home without doors or windows can easily be burgled. Public Key Infrastructure (PKI), Cryptography, digital certificates, biometric authentication and verification, passwords, randomly generated keys, 2-3 and 4 factor authentication systems and Encryption provide the logical access control that is needed in this digital age to prevent crime and fraud.

12. DIGITAL DEVICES - The personal computer as we know it is now integrated into the mobile phone in this digital age. We now communicate and share information on digital devices that we still call a phone but in reality, are more than phones. They are digital assistants, which are embedded in a variety of form factors that connect us to the world and fulfills almost all our needs on demand.

HOW CAN GOVERNMENT AND PRIVATE SECTOR COLLABORATE AND INNOVATE TO BENEFIT FROM THE DIGITAL ECONOMY?

1. National ID and Addressing System

I applaud the government for taking steps to kick-start the national ID project and digital addressing system to create the trust infrastructure so crucial to a modern-day digitisation economy. These two initiatives are critical and key components of a holistic digitisation infrastructure.

2. E-GOVERNMENT –

Government services delivered efficiently and cost effectively to the citizens without frustrations, delays and time wasting and bribes, depend on a fundamental database with individual’s relevant data and biometrics attached to a unique number, from cradle to grave, identifying positively citizens and foreigners and delivering their rights, duties, privileges and obligations due them digitally in real time.

This foundation will usher us into the digitised e-government ecosystem for delivery of government services. Government must partner with the private sector to push for this in order to deliver government services like Passports, Vehicle registrations, Drivers’ license, Taxes, Fines, land titles, Housing, Local Government, Performance tracking, Health, justice, Elections, Budgeting, Crime detection and prevention in real time.

3. E-COMMERCE

This 4th Industrial revolution whose factors of production is knowledge and brain power more than the traditional Land, Labour and Capital gives us a tremendous opportunity. We can teach our young population, armed with digital devices, to build digital applications that will create the global companies of today and tomorrow and teach our people to scale globally without infrastructure, a phenomenon described in the new business jargon as, ‘INFRASTRUCTURELESS SCALING’ which describes the new digital companies like;

1. UBER – the biggest taxi company without taxis

2. Google – the world’s biggest library with no shelves of books.

3. FACEBOOK – The world’s biggest publisher with no newspapers

4. AIRBnB – The world’s biggest hotel with no hotel rooms

5. SNAPCHAT – The world’s biggest photo studio with no cameras.

I can go on and on from Amazon and the retail revolution and Netflix, the world’s biggest movie theatre with no theatres. Giant global companies are being built right under our watch in university labs and garages with new knowledge and new tools. We can and must harness this opportunity. This knowledge is available in virtual classrooms to all.

ECONOMIC IMPACT OF DIGITISATION

Doubling the digitisation index score for the poorest citizens over 10 years! If Ghana can achieve this, will move us to the first world in a decade.

According to research, if emerging markets could double the Digitization Index score for their poorest citizens over the next 10 years, the result would be a global US$4.4 trillion gain in nominal GDP, an extra US$930 billion in the cumulative household income for the poorest, and 64 million new jobs for today’s socially and economically most marginal groups. This would enable 580 million people to climb above the poverty line. All aspects of our lives will be significantly improved by digitising our economy.

Mobile and Digital money payments, Supply chain management, access to capital loans, interest rates, agriculture and commodity exchanges, stock markets, transport business and industrial efficiencies will all be greatly enhanced and this will increase the velocity of economic expansion and wealth creation in our country.

According to the consulting firm Booz Group, digitisation provided an additional US$193 billion to the world economy and 6 million jobs worldwide in 2011. The most advanced economies (North America and Western Europe) accounted for approximately 29 percent of the output gain, but just 6 percent of the employment impact.

Emerging economies accounted for 71 percent of the gain in gross domestic product (GDP) and 94 percent of the global employment impact. Booze Group further revealed that an increase of 10 percent in a country’s digitization score fuels a 0.75 percent growth in its GDP per capita.

THE ROLE OF GOVERNMENT IN THE DIGITAL REVOLUTION

1. Formulating and implementing the right POLICIES to usher in a new era of enlightenment that puts the Ghanaian and the national interest first. We cannot expect others to develop our countries for us. All governments proclaim this as their primary objective but the evidence does not support their rhetoric. Let us stop the lip service. In a fragile economy such as ours, good policies have become hostages to politics over the past 60 years. The result has been high unemployment and lack of wealth generating innovation.

We are in the era of collaborative competition and most of our problems have already been solved by other nations. Let us collaborate with other enlightened and forward looking countries in governance and in business, but as equal partners not as beggars, always looking first at our national interest. Mr. President, we agree with you. We do not want aid, we want our dignity, we want a working and performance driven economy, in which we can work hard to earn our keep and create wealth.

2. EDUCATION – Let us reform our education system fundamentally. Let us deepen the civic education of the youth and transform their values and work ethics, and optimise the curriculum and make the education more pragmatic and suitable for this digital age.

The content needed is everywhere on the internet. Let us improve internet access to cover all educational institutions 100%, so that with just a little guidance, the youth can access the right information and grow their brain power, believing in work, productivity, performance and meritocracy as the only way to live a fulfilled life.

I believe that with the right vision, focus and determination, we can, in only a decade focus on the adolescents and children population aged 0-19 and with the right education, knowledge, and tools, enable them to compete at the highest level globally to lift this country to the first world.

The statistics is in our favour. According to the Statistics Services Department, the child and adolescent population of Ghana (as at 2010) Ghanaians aged 0-19 years is 48.9% (12,060.387 0f 24,658,823).

We still have time to fill these young minds with the right content with all the information and knowledge that has been digitised to equip them with the capacity and tools to be in the vanguard of the digital revolution, and not the rear as mere consumers of technology.

3. THE ROLE OF LAW – We have all the laws that we need in Ghana. However, we must align them to be relevant to the new digitised age and enforce them. The protection of intellectual property, the respect, commitment and enforcement of contractual rights are important to the digital economy.

This is so because its highest value is knowledge based. The blatant theft of intellectual property and the lack of quick remedies for breaches of contract in our jurisdiction will make it an unattractive destination for building these modern companies.

If we do not build a modern and incorruptible judiciary, the bright children of today and tomorrow will move their talents to more open and accountable societies where they can protect their intellectual property and get value for their intellect.

4. CREATING THE RIGHT ENVIRONMENT FOR THE DIGITAL REVOLUTION IN GHANA AND IN AFRICA

Ghanaians like Thomas O. Mensah, a chemical engineer who worked in the area of nanotechnology and fibre optics was a leading member of a team that invented the modern fibre optics in the USA which enabled the world to transfer large amounts of data across computer works without which the digital age would not have been achieved.

Another Ghanaian, Professor Nii Narkai Quaynor, a computer scientist played a pioneering role in the introduction of the internet to Africa. Many more Ghanaians played significant roles in this 3rd revolution.

Professor Kwabena Adu-Boahene, Professor of Bio-engineering and electrical engineering in Stanford University is playing a role in the 4th industrial revolution. A Ghanaian born in Ghana and my Senior at Mfantsipim School.

At 17 in 1989, Elon Musk born of a Canadian mother and South African father moved to Canada. in 1992, he moved to the USA aged 20 after an undergraduate degree and Masters in Penn State University, he started Zip 2, an online city guide in 1999 he sold it for US$300 million in cash and US$34million in stock options aged 27.

He then co-created Paypal and in 2002, it sold for US$1.5billion he owned 11% of the stock. He founded SpaceX which was given a contract by NASA to handle cargo for the international spaceship. He launched Tesla in 2008. In April 2017, Tesla overtook General Motors and was declared to be the most valuable USA car company. He was born in Africa.

This year, Chinedu Echeruo creator of Hopstop, sold it to Apple for US$1billion after founding it in 2005, 12 years ago. Chinedu Echeruo grew up in Eastern Nigeria and attended Kings College in Lagos, Nigeria, West Africa. There are many more stories of Africans migrating from Africa in this digital age and helping to create companies that have been valued or sold for billions of dollars, or contributed to the advancement of the digital age from the front and not the back.

WHAT IS THE RIGHT BUSINESS AND ECONOMIC ENVIRONMENT FOR THE DIGITAL REVOLUTION IN GHANA?

Let me use a familiar cliché – Government has to ‘create the enabling environment’ so that these companies can be created right here in Africa, in Ghana. Mr. President, the CEO’s of this country, and I think I speak for all of us would like you to declare a new age of enlightenment defined by vision, passion, values, patriotism and the national interest to create an ethical, meritocratic, transparent, professional, digital, open and performance driven environment in Ghana.

This environment must promote the capable, the knowledgeable, the passionate, the hardworking and the diligent, and the pursuit of efficiency and productivity, to attract the brightest and the best to Ghana and to keep them in Ghana to give birth to the great digital entrepreneurs of today and tomorrow.

We have to expand our economy and to move it to the first world, using policy, law and education to create the environment and cultivate the minds of our children and adolescents whose minds with the right content, discipline and orientation will be the fuel that propels us into the vanguard of the 4th Industrial revolution; the digital revolution.

For us, one of the most significant statements that you have made is that your government is open for business and to promote the private sector. Your proclamation that public service is public service, and people wanting to make money should join the private sector and not your government, is new, fresh and very significant indeed.

An economy that is based on poli-trepreneurs and tender-preneurs will not create any lasting value and will in the end leave a legacy of penury for our children. Digitally constrained economies receive the least benefit, largely because they have yet to establish an ICT ecosystem that can capitalize on the benefits of digitization.

Alas! Ghana is classified as a digitally constrained economy, but we can change this to become a world leader in 10 years.

It is only an environment that promotes the capable rather than the preferred that will bring lasting wealth to this generation and the generations yet unborn and make our country great and strong.

The government must strive to provide this environment or we risk missing the digital revolution. Let us not create a Ghana in which any initiative that is not pre-authorised never sees the light of day. If we do, Ghanaian entrepreneurs will simply stop trying. For those that tried, it has been 60 years of - in the words of Etienne Balazs - “endless paperwork and endless harassment”.

ROLE OF PRIVATE SECTOR

If the laws and the actions of the three arms of government are consistent with the letter and spirit of the constitution, and if the national interest is pursued to create the environment for businesses to collaborate and compete.

If the best businesses are rewarded by the market, and the public purse is protected and vulnerable groups are given a safety net by the state, in such an environment the private sector will naturally expand. It will play its natural role of taking advantage of this digital age because it will focus and strive for excellence, performance competitiveness and hard work and productivity will follow naturally. The private sector should not, and will not be looking for handouts from government.

Public Private Dialogue

Critical to this exploitation of this digitised economy is regular collaboration between business and government. The lack of a serious Public Private Dialogue over the past 60 years to shape and deliver the economic transformation vision for the country has been an unacceptable omission. Mr. President, your presence here gives us hope and affirms the seriousness that you attach to the role of the private sector and the importance of a public private dialogue to advance our country in creating wealth, expanding our economy and lifting millions out of poverty.

To conclude,

I shall touch on 5 key areas for such Public Private dialogue Dialogue should focus on shared vision and prioritisation –

I. focus on national competitive advantage.

II. Constant change in such a fast moving industry means prioritising to focus on key areas that give competitive advantage, promote social inclusiveness and create jobs

III. Create innovation hubs designed to build capabilities to deliver these areas

IV. Understand investment decisions of the private sector and develop policies and plans to complement them

V. Provide feedback on progress towards shared vision

The dialogue should focus on Creating a holistic infrastructure – Becoming a digital market maker requires a holistic ecosystem, and in that pursuit, the Public and Private should be partners to enable us grab the opportunities opened up by the 4th industrial revolution, the age of digitisation.

I thank you all and especially, the founder of the CEO Network, MR. Ernest De-graft Egyir and Deloitte Ghana for putting together this summit and creating this essential platform for the CEO’s of this country and to interact and dialogue with the President.