We shouldn’t be bystanders in 4th industrial revolution
The world is in the Fourth Industrial Revolution, 4IR, an era of rapid change driven by technology, industries, and societal patterns and processes due to increasing interconnectivity and smart automation.
It is a vast combination of three other revolutions in a storm that will revolutionize industry but indications are that Kenya will continue licking its wounds from the missed opportunities.
Since the first industrial revolution in 1784, the second revolution in 1870 and the third revolution in 1969 whereby electric, information technology and automated production drove industry, Kenya has largely been a consumer and a Johnny come lately in many aspects.
As the fourth industrial revolution takes shape, Kenya must streamline policy and industry and make it a better place to invest and create opportunities for the millions of unemployed youths.
While we cannot estimate the amount of money private sector set aside last year for research, the government gave only Sh323.0 million for the National Research Fund in its Sh3.6 trillion budget.
Research and development is an important driver of economic growth. While it can be capital-intensive, it can also lead to breakthroughs that can drive up profits. This can encourage more foreign direct investors.
The development of Safaricom’s M-Pesa is the only major innovation that Kenya has scaled up, but the results of the idea is a story that will be told for years. We need more of such innovations.
M-Pesa is now one of the largest mobile money services in Africa and transactions reached 19.9 billion in the financial year ending March 31, 2022. During that period, however, manufacturing has been declining. Between 2011 and 2021, it dropped from 11.16 per cent to 7.24 per cent.
During that period, Kenya has been performing poorly in terms of manufacturing sector’s contribution to GDP compared to neighbouring countries.
Growth of the manufacturing sector has been generally low and volatile and averaged 3.48 per cent between 2010 and 2022. The pandemic knocks did not help the situation as Kenya recorded a negative growth of 0.42 per cent.
So when industry players forwarded a memorandum to the speaker of the National Assembly, this was a clear signal that things are not right.
Their concerns can be summarized that the performance of the manufacturing industry has been generally low and volatile for a long time and the country needs to change tack.
I was therefore hoping for serious strategies touching on both long and short term plans to promote investments in the sector, understandably, the manufacturers called for policies on exports domestic taxation to be avoided to promote export growth.
Manufacturers also want fees, levies, and charges to be reviewed and approved by the National Assembly since they are considered as statutory instruments. They also warned that movement of goods and services continues to be hampered by the introduction of fees, levies and charges imposed across county governments.
Clearly, the efforts of industry currently are focused on surviving the high taxes and pushing a well-functioning system that can manage velocity of money in the trade environment to help firms to have cash to operate well by, among others, encouraging prompt payments and by ending increasing cases of pending bills.
Granted, these are immediate concerns but Kenya needs to be more ambitious and have a conversation and move beyond these challenges, and mull of excellence that can help spur real growth.
The State and the private sector must intentionally create an environment where a combination of factors must come into play. This includes change in government policy, encouraging entrepreneurial ambitions, making more money affordable for R&D, and above all creating demand for goods and services as Africa becomes one market place.
The World Economic Forum warns that compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace. Moreover, it is disrupting almost every industry. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance.
— The writer is the Business Editor, People Daily