Africa’s Cheap Labour Comparative Advantage Has A Major Disrupter: AI (Artificial Intelligence)

This post has received the highest interests from African policy leaders. Simply, Africa cannot copy the Chinese developmental paradigm because what made China successful will not be relevant in this era because of AI. The cheap manufacturing jobs of the 21^st century belong to AI and not human beings. So, anyone pushing the path of industrialization to create low-level jobs is already disrupted. Yes, a farm in England has no single farmer, from planting the crops to harvesting them. Simply, no one is sending you cheap labour from the Western world to Africa because machines will do them!

Read it if you have time.

This morning I made a remote presentation to a Presidential Committee on innovation in an East African nation: any industrialization policy based solely on China and India models will struggle in the age of AI (artificial intelligence). The country has an evolving strategy to mirror China and to a large extent India in its industrialization policy. In an extensive brief, I made it clear that we have a major dislocation which would make it challenging for any country to replicate China and to a small extent India on the path to industrialization. The issue is AI which will create a massive shift in how products and services of the 21^st century are developed, manufactured and distributed. A farm in England has no single farmer, from planting the crops to harvesting them.

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The factory jobs of the future will not cement our future. We have to position, and to innovate at our own levels, and build local capabilities. By innovating, we create new basis of competition, making even some Western World systems and processes obsolete, as MPESA made every digital payment system in the world.

There is a huge opportunity across industrial sectors to pioneer new ways. We can only do those by pushing higher because if we just think cheap labour will take us where China and India are seated, AI, our biggest competitor today, may make that difficult.

Africa Needs New Ideas, AI Will Disintermediate China and India Industrialization Models

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I think it’s a faulty argument from the beginning for anyone pushing for industrial policy on the basis of cheap labour, it simply shows lack of awareness and significant detachment from the reality on ground. Same way you cannot push for agricultural policy for commercial farming on the basis that 65% of Africans are farmers. Obviously, to practice agriculture business at scale, you do not need to send more people to the farmlands, the reverse is actually the case.

Just like in many things about Africa, we are highly handicapped in the area of storytelling, so when we have a good policy to push, we end up messing up everything with the way it is presented, thereby devaluing a brilliant policy framework in the process.

We need industrial policy that is forward thinking, the AI that will “take over” all our jobs cannot be trained in China or America, you do not import your data elsewhere and reuse same in a different setting, this is where our own basis of competition and differentiation lies. Any threat of job taking is demystified when you look at each case from the right perspective.

We have plenty things to keep our people busy, but we must improve greatly in our storytelling capabilities, it’s key to better valuations.

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