The Fourth Industrial Revolution: Unlocking the Gains for Nigeria
Overview of the Fourth Industrial Revolution
The Fourth Industrial Revolution (4IR) builds on the previous advancements achieved in the first, second and third industrial revolutions. The use of water and steam power to mechanize production characterized the first industrial revolution, the second industrial revolution used electric power to achieve mass production while the third industrial revolution introduced a leap in the digital revolution with the use of information technology to automate production.
According to the World Economic Forum (WEF)1 , 4IR is characterised by the fusion of technologies that is blurring the lines between physical, digital and biological spheres collectively referred to as cyber-physical systems. This revolution is differentiated from the previous ones by the transformational effect across industries as well as the speed and rate of its occurrence. 4IR has led to life-changing benefits in every aspect, from the ease of business via e-commerce to the technological strides in healthcare and increased financial inclusion across countries.
4IR in the Global Scene
The presence of technologies such as Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) for low-cost gene sequencing, artificial intelligence supplementing processes across industries, and automation disrupting transport and manufacturing has modified life across nations. The onset of self-driving cars, drones and virtual assistants also point to the impact of 4IR in the world. The COVID-19 pandemic that led to a global lockdown has further accelerated the digital revolution as a lot of businesses were forced to manage a distributed remote workforce with the onset of various social distancing restrictions. Also, individuals tried to adapt to the ‘new normal’ in a quest for innovative ways to live and cope with the pandemic. We saw the advent of innovative ideas like virtual concerts, people trying to stay in touch with their favourite tourist destinations via live street view cams and technology startups like Clubhouse couldn’t have found a better time to launch their real-time audio chatroom app.
Human capital has also been affected by 4IR. A McKinsey report evaluated 78% of the global labour market across 54 countries and identified that more than 50% of the jobs in the agriculture/forestry/fishing/hunting, manufacturing and retail trade sectors can be automated. Retraining and upskilling has been encouraged in the public and private sectors to ensure that employees remain relevant in the new era.
Tremendous impact is seen in the revolution of trade globally. International trade is much faster with the use of blockchains in making payments rather than using traditional methods. The use of 4IR has been employed to reduce shipping and customs processing times by 16-28%, boosting global trade by 6-11%. 4IR is bound to push the barriers of globalization making trade even easier across borders. For instance, digital platforms such as Alibaba and Amazon have millions of shoppers worldwide with the promise of making shopping easier and borderless.
Though this industrial revolution presents many benefits for countries, businesses and people, it is essential to note the downsides being income inequality, cybersecurity risk, core industries disruption and ethical issues. A number of industries have been disrupted by new technologies and entrants into the market; Traditional cab hailing services have been disrupted with the likes of Uber, Bolt and Lyft while the hospitality industry has been upstaged by innovative startups like AirBnB. Even Brick and Mortar stores are kept on their toes with companies like Amazon and Alibaba while content streaming industries are being dominated by the likes of Netflix and Hulu.
4IR in Africa
Africa is generally still characteristic of a lag in its adaptation of technology within the digital evolution2. However, Africa is slowly gaining traction with over 10% (712) of the 6,500 technology start-ups in the continent in 2019 developing 4IR applications receiving $210 million venture capital investments of the overall $2.27 billion. Application of the 4IR is seen in the agricultural sector with the development of machines, mobile and web technology to improve efficiency. Due to Africa being a large continent with the most landlocked countries in the world, there are large distances between and from markets, drone technology is being used for deliveries, surveillance, farming, construction and wildlife protection. Driven by the private sector, the use of robotics is growing in Africa and can be seen specifically in some countries such as Ghana, Congo and Uganda, amongst others.
The financial services industry has also greatly benefitted from the application of 4IR. Africa possessed half of the global mobile money accounts in 2018 with an expected growth through 20253. This has resulted in increased economic development due as more African countries adopt mobile technologies. 17 million jobs have been created and have contributed to 8.5% of GDP of sub-Saharan Africa (value of $144 billion)4. A specific example of this is the M-Pesa platform launched in Kenya with the goal of increasing financial inclusion for the unbanked in the society, which has expanded to over 5 African countries with about 500,000 active agents.
The African health sector is disadvantaged by the shortage of healthcare professionals spurred by a large exodus of these professionals to Europe and North America, the induction of technology has helped to cushion this effect. For instance, we have the use of drones to deliver blood transfusions to remote regions in Rwanda, the use of artificial intelligence to accurately diagnose cervical cancer and other abnormalities in Ethiopia. In Ghana, mPedigree uses simple stickers in packaging, which, when scratched, reveals a numeric code verifiable by SMS to provide a direct confirmation of the drug’s authenticity. Likewise in Uganda, around 27,000 government health workers use mTRAC, a mobile health system for reporting on medicine stocks across the country. South Africa also uses a messaging platform, MomConnect which is integrated with the national pregnancy registry and a help desk for questions and feedback.
The future of 4IR in Africa is promising as start-ups in Africa have emerged with top three activities relating to digital applications and software, information technology and communications (ICT) and internet services, and the creation of audio-visual content and broadcasting.
4IR in Nigeria
The presence of digital platforms have currently revolutionized trade in Nigeria by connecting buyers and sellers directly. Some of these platforms include: Jumia, Jiji, Olx and Konga. Beyond these e-commerce platforms, social media platforms have also been used to further create a market especially for entrepreneurs across the country such that they can gain access to marketing resources that were otherwise not available to them, increase their reach, cultivate strategic partnerships, and increase their contact with customers and suppliers.
In the financial services industry, blockchain and artificial intelligence is widely used to collate data of its customers, model systems for operations and integrate across platforms for greater ease for the customers. Some Nigerian financial companies thriving on this wave include Migo, which uses artificial intelligence (AI) systems to make lending decisions, also one of the leading financial institutions known as United Bank for Africa (UBA) developed the Leo chatbot for customer interaction and Touchabl that offers ease of use for its customers by using AI.
There are also companies that help to democratize access to technologies like Artificial Intelligence, thereby making it accessible for useful applications like facial recognition and object detection, which will be beneficial to multiple sectors and industries. Some of these companies include DeepQuest AI, ImageAI and AirSmat.
4IR has also transformed the educational sector in Nigeria as more companies and the government realize the need to equip its youth and adults for effective functioning in an evolving world. On the basis of this, the Youth for Technology established a 3D-printing academy for girls in Nigeria. In the same vein, a public-private partnership by the Lagos State government focused on the training of 1 million Lagosians with coding skills by 2019.
Unlocking the Potentials for Nigeria
With the happenings around the world and Africa spurred by 4IR, It is safe to say that the same can be adopted to transform various industries in the Nigerian context. We will mention a few here:
The agricultural sector in Nigeria tends to benefit from drone technology and the usage of IoT. Similar methods have been implemented in Uganda and can be studied for replication in Nigeria. The use of this advanced technologies to measure, predict and analyse agricultural data will aid in better production efficiency by farmers. This can also increase wealth generation in the rural areas of the country as farm activities represent 50% of the rural income in Nigeria5.
3D printing and automation is set to transform manufacturing. Automation specifically can aid the growth of the manufacturing and construction industries in Nigeria. Production time for goods can be greatly reduced with access to machines that speed up the development process. The presence of such technologies will aid further investment into these sectors by both local and foreign investors. A typical example of this is the Jet Motor Company, a Nigeria auto-manufacturer of vehicles for African roads who recently received a funding of $9,000,000 for further growth. Additionally, the Dangote-Sinotruk initiative aims to locally produce 10,000 commercial vehicles annually through the use of automated manufacturing. With the development of the skills in Nigeria, innovation is bound to re-occur as there is a long-term promise for growth.
Additionally, the Nigerian service industry possesses the highest application of evolving technology and so exponential growth is bound to occur with the focused usage of ground-breaking technology in the different sectors. Curacel, for example, is a company in the healthcare sector that provides electronic health records and payment solutions for medical providers. The use of such platforms across urban and rural areas can provide necessary healthcare services to many on a mobile level.
With the implementation of frontier technology in Nigeria, transformational change can occur across sectors and industries, aiding the development of the country.
Challenges for Utilization in Nigeria
There are two (2) major hindrances to the successful utilization of 4IR in Nigeria. The first being poor digital infrastructure, as at the end of 2020, Nigeria’s internet penetration was at 43.3% with a major lag in rural regions.
Secondly, with previous industrial revolutions, jobs with different skill sets were created by the implementation of new technologies. This led to a further divide of labour into the ‘low-skill/low-pay’ and ‘high-skill/high-pay’ segments as there is a greater demand for the latter to harness the technology. This poses a concern for the Nigerian labour force as there is an existing divide between skilled and unskilled workers. With the introduction of 4IR, workers who are less-skilled are at the risk of losing their jobs as the demand for new skill sets emerges due to automation and new technologies.. Therefore, the training and reskilling of workers for the utilization of technology needs to be addressed to promote Nigeria’s inclusion in this revolution and prevent further employment. Furthermore, job creation for the low-skilled workers either through training for personal development or the provision of more formal/informal jobs is needed to prevent a growth in currently high unemployment rates in the country.
Role of Government, Policymakers and Private Sector
For successful implementation of the 4IR in Nigeria, collaboration between the government, policymakers and the private sector is essential. This synergy between all stakeholders will lead to a greater level of applicability while maintaining a healthy focus on its long-term sustainability.
To combat the issue of poor infrastructure in Nigeria, the various concerned stakeholders need to take note of the following:
- Continuous Development of the country’s physical and financial infrastructure by the government to promote an enabling environment for the utilization of technology for organizations and entrepreneurs. For starters, access to steady power will be a big plus as the majority of the citizens rely on alternative power sources like generators, solar power systems, etc which come at a cost that few may be able to afford. Simply put, we need to fix power.
- Implementation of the Nigeria Broadband Plan with a focus on achieving the target of 60% digital literacy rate in Nigeria by 2025 and 100% of unserved clusters to be covered.
- Investments in developing innovation ecosystems to provide an enabling environment for entrepreneurs, investors, researchers, venture capitalists, business advisors, trainers, etc.
- Government incentivizing private sector players who engage in Digital Ecosystem building activities through tax holidays or setting up free trade zones that promote technology. This will encourage the setup of innovation hubs, tech parks, centers that promote science, technology and innovation (STI) among other ecosystem building activities.
- The update of existing laws and policies to drive more investments towards critical infrastructure for increased access to 4IR. For instance, some interesting policies such as reducing the right of way charge for telecommunications infrastructure by some State governments in Nigeria is a welcome development that will further encourage more investment into the supporting infrastructure.
To ensure relevance and increased participation of the Nigerian labour force in the global digital economy and 4IR, here are some suggested approaches to tackling the issues discussed earlier:
- Emphasis on education including digital skills, making STEM related subjects more inclusive and attractive and promoting national re-skilling initiatives by the government. Proper training ensures that Nigerian labour and entrepreneurs possess the relevant expertise to position themselves globally as well as developing homegrown skills to tackle various issues from a much more informed and localized approach. It is projected that Africa’s workforce will be the world’s largest by 2030 6. Nigeria has a youth population of about 70% of its population 7, so the development of relevant skills in technology and innovation will position the country to be a leader in the fast-growing digital world and contribute significantly to shaping the future of 4IR.
- Capacity building and reskilling of labour by the private sector to ensure that workers across each sector of the economy are equipped to succeed with the right tools and skillsets to effect lasting change.
- Collaboration between the public and private sectors to ensure the development of a sustainable innovation ecosystem for Nigerian entrepreneurs.
- The update of existing laws and policies to ensure that they promote digital innovation, digital inclusion for marginalized groups, incentivizing various stakeholders such as the private sector and Civil Society Organizations carrying out supporting interventions.
The Bank of Industry lists a focus on digital transformation, education, entrepreneurship and e-commerce as the necessary strategy for Nigeria to harness the benefits of 4IR. Below is a summary of the collaborative effort between government, the private sector and policymakers needed for a sustained technological development in Nigeria.
With the implementation of these strategies across these pillars, Nigeria is set to benefit greatly from the current evolution and continue to live up to being ‘the giant of Africa’. We as individuals are also not left out in contributing to the success of 4IR in Nigeria, How, you may ask? By taking up any and every opportunity in developing your digital skills through available elearnings and trainings, getting involved in the digital transformation activities in your organisation and taking intentional steps to impact digital skills in your communities through volunteering at training opportunities. Need I say more…
Jointly written with Ememobong Etim