Core drivers of digitalization in developing economies – investments in Future
This summer I was honored twice to deliver SAP point of view on what are the key drivers of digital transformation in developing economies. First we were discussing Future of Africa and how to promote economic growth and employment through work-based technical and vocational education and training at G20 Africa Partnership session in Berlin chaired by German Federal Ministry of Economic Cooperation and Development (BMZ). Then I moved to CIS and moderated an open discussion on “Digital transformation of World Economy” at Astana Economic Forum in Kazakhstan. What was most interesting looking at these two events, is that all discussions started with the question of the role of Government in driving economic change and digital transformation and ended with putting people first and life-long education at the center of any positive change.
Who builds the future? Role of the government and people
All the discussions held those days were surprisingly in agreement that Government is heading towards the role of an enabler of transformation and growth, rather than staying in the role of a provider of fixed services and structures. And one of the important aspects of the Government enabling role is to invest in building the digital technologies, infrastructure and the workforce of the future. Alongside with investments in the digital infrastructure Government is a coach, growing the talents that have skills to execute a digital strategy. From knowledge sharing program on the level of Cabinet of Ministers to the extended learning program in Universities; volunteering courses for the youth in techno parks, sponsored by ICT vendors – all means are applicable to grow new digital generation. And the benefits of partnership with the private sector in creating and spreading the new ways of doing business and delivering knowledge are now more obvious than ever.
“To 2025 Kazakhstan should be clean out of dinosaurs to be open for innovations,”- metaphorically stated prime-minister of Kazakhstan Mr. Sagintaev…
… and we at SAP believe IT, software and of course our software and technology portfolio can do great things in this field, to surface and improve many issues not only in developing economies, but also in the mature markets. Data is the currency of the future, to be able to provide the right insights, interpretations, transparency and then act on it will be the key differentiator in the future – but to be able to support countries on their journey, we need local people in the job market who understand the latest technology and our products and have the vision and skills to innovate on the edges and to work on implementations.
Disruptive technologies are massively impacting our business and engagement models, the business processes as they are shaped today. Actually, about 90% of our today’s processes we follow, will disappear over the next decade. And the way how we will work in future will also change. What we know for sure – is that:
- Data, transformation, technology means nothing without people. Technology becomes a benefit for the country and stimulates economic growth only when there is a workforce to take lead – education is key and is an investment in the future which is approaching now pretty fast
- Skills are the fundament for moving transformation forward.
- Technical and Vocational Education and Training programs need a strong link to the labour market. This link and the commitment of a country need to be reflected in their national plans.
So constant life-long education and investments in people are the only seeds able to adapt, grow and give fruits in total disruption. Investing in digital fluency and ICT literacy skills building the skills needed to successfully leverage the technological advances of tomorrow – are the right direction to accelerate the potential. Finally, improving labour market data and forecasts is in itself a tool for designing better and more nuanced future-ready strategies, focused on specific skills, geographies or sectors. And this is the point – where IT private sector should continue being a strategic Govts’ partner – the way SAP works.
In place of epilogue, a brief dive into Africa and Kazakhstan specifics
African economies are amongst the fastest growing in the world. Predictions see Africa’s GDP rising to $2.6 trillion by 2020. And all this despite global economic developments, pressure on commodity prices and political and social challenges.
Africa shows incredible potential for growth and innovation, but poverty, lack of infrastructure and unemployment that is often linked to a lack of skills all challenge this potential. ICT is a gateway to African growth and competitiveness and it is a pretty powerful one, however, the success in latest disruptive technologies goes hand in hand with local skill representation. One of the key factors to fight poverty and unemployment is capacity building and education. So SDG4 can be seen as a key enabler for many other SDG’s.
For the years of Kazakhstan’s independence, dynamic growth of the economy allowed the country to achieve significant results. Kazakhstan was included in TOP-50 governments with the most innovative economies (Bloomberg, 2016) and took the course to the digitalization. The Government of the country is sure that the implementation of the National Plan “100 concrete steps”, which includes institutional reforms for building modern, transparent, and accountable public administration as well as for industrialization and economic growth, is impossible without intensive and pervasive use of digital technologies. The effort of state authorities over the last 10 years has built a solid infrastructure and regulatory framework in ICT area (33rd rank in the UN e-Government rating, 68% of Internet users, etc.).