Capitalizing on Africa's Digital Development: Investment Opportunities Abound
Words from a technology-driven future: Pichai's vision in Africa
A few years back, I took a glimpse of the digital revolution unfolding in the heart of Lagos. The city's streets hummed with anticipation for the technological marvels that awaited Africa and the seemingly endless opportunities they would usher in. From job-seekers eager to master the digital landscape to entrepreneurs crafting the blueprints of promising start-ups, their drive and ambition left an indelible impression.
These spirited pioneers resurfaced in my thoughts as I stood among the regional leaders at the African Union's Business Forum this week. Despite the continent grappling with challenges such as the relentless pandemic and a tough economic recovery, the spirit of reinvention persists, nurtured by engineers, developers, and visionaries.
Africa is swiftly becoming the birthplace of innovation, witnessing an unprecedented surge in tech start-up funding last year [1]. Today's mobile payment systems, first developed in Kenya, are now the preferred transaction method everywhere. Renewable energy solutions conceived in Africa are shaping a greener future for us all. And thanks to the Internet, African businesses can extend their reach to far-flung markets, tackling pressing global issues alongside local challenges.
Personally, this resonates deeply. As a youth growing up in India, I patiently awaited the arrival of every new technology – from the TV that opened my eyes to the world outside, to the rotary phone that shortened the wait for test results. India, once a technology importer, has now become a global exporter.
Africa holds a similar promise. With 18% of the global population, the continent accounts for a minuscule 0.4% of high-tech exports and less than 2% of the world's broader service exports [2]. The timing is ripe for Africa to step into the global technology scene and boost its exports to reignite growth.
The continent stands on the brink of a digital revolution. In the coming five years, about 300 million more people will gain online access, many of them young, forward-thinking, and digitally savvy. The African digital economy has the potential to grow to US$180 billion – roughly 5.2% of the continent's GDP – by 2025 [1].
We at Google, in collaboration with governments, aspire to play a pivotal role in catalyzing this movement. In 2020, we outlined possibilities and opportunities in the "Digital Sprinters" report [3], and in 2021, we pledged an additional US$1 billion to Africa over the next five years. Our commitment? To focus on four key areas that ensure the digital revolution enriches every African life.
First, we aim to expand affordable and reliable Internet access across the continent. The pandemic has underscored the vital importance of digital connectivity as a lifeline that links us to critical information and services. Our Equiano subsea cable will equip more people with faster, better-quality Internet, reducing costs by over 20%. Collaborative initiatives like the Taara project deploy wireless optical communications links that harness light to transmit information rapidly and affordably [4]. We are also working diligently to reduce smartphone adoption barriers, aiding countries like Kenya in rolling out device-financing plans.
Second, we are dedicated to helping African businesses adapt to the digital world. Business sophistication – as defined by "knowledge workers, innovation linkages, and knowledge absorption" - still lags behind the availability of digital infrastructure [4]. Empowering businesses to transition online, cultivating technology professionals, and advocating for cloud computing usage are crucial to bridging this gap. In this endeavor, small businesses are the cornerstone, as they employ around two-thirds of the continent's formal workforce.
Third, we are devoted to investing in African entrepreneurs. As the breeding grounds for fresh ideas and innovation, start-ups constitute the lifeblood of a vibrant digital ecosystem. To foster this spirit, we will invest directly in African start-ups through our dedicated US$50 million Africa Investment Fund and the global Black Founders Fund [3]. We have already backed SafeBoda, an app linking passengers with a network of reliable, trustworthy drivers, and we invite others to join us in supporting start-ups across the continent.
The final priority is to strengthen partnerships with nonprofits and institutions devoted to unlocking the benefits of technology. From initiatives like the AirQo project, which deploys AI and sensors to monitor air quality, to broader commitments of US$40 million to assist NGOs in addressing community challenges, our mission is clear: to make technology an accessible, sustainable force for progress for every African individual.
Innovation, education, investment, and collaboration: the keys to making technology an agent of change for generations to come. As we embrace our role in this movement, we invite other companies to join us, ushering in an era of excitement and opportunity in which every African can reap the rewards of the digital revolution.
Sundar Pichai, CEO of Google and Alphabet
Sources:1. We For Africa2. World Bank3. Google's African investment announcement4. Google's Taara project
- The African digital economy has the potential to grow to US$180 billion by 2025, marking a significant leap in its contribution to the continent's GDP.
- Google, in collaboration with governments, aims to play a pivotal role in catalyzing this digital revolution by expanding affordable internet access, helping African businesses adapt, investing in entrepreneurs, and strengthening partnerships with nonprofits.
- In the coming years, millions more Africans will gain online access, many of them young, forward-thinking, and digitally savvy, offering immense growth potential for Africa's technology sector.
- The continent's burgeoning start-up scene, nurtured by visionaries and innovators, is already making its mark on the global stage with creations like mobile payment systems and renewable energy solutions.
- To ensure the digital revolution enriches every African life, Google has outlined four key areas of focus: expanding internet access, helping businesses adapt, investing in entrepreneurs, and strengthening partnerships with nonprofits.
- In the face of challenges such as the pandemic and a tough economic recovery, the spirit of reinvention persists in Africa's engineers, developers, and entrepreneurs, driving the continent's growth and innovation.
- As Africa steps into the global technology scene, it has the opportunity to boost its exports and reignite growth, potentially transforming the economy and lifting millions out of poverty.
- Personally, Sundar Pichai sees a promise in Africa, akin to his own youth in India, where technology held the potential to open doors to limitless opportunities, transform the economy, and change lives.
