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How to Encourage the Adoption of Agtech Innovation in India

By
Guest Author
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0

Editor’s Note: Hemendra Mathur is agribusiness investment lead and venture partner at Bharat Innovations Fund, a new $150 million early stage fund with a focus on agtech, cleantech, health-tech and enterprise-tech ventures. Mathur previously worked at SEAF India Investment Advisors and Yes Bank. 

An estimated 450 million¹ of the population in India depends on farming for their livelihood. Agriculture in India makes for an interesting study with the farmer at the epicenter.

An interesting phenomenon of Indian agriculture is that it’s increasingly feminized with more women working in the fields while menfolk migrate to urban areas seeking alternate employment. Despite the increasing contribution of women to farming, few women have titles to the agricultural land in their name.

Landholdings are small and getting smaller. The average size of farmland holdings in India is also falling on account of the division of landholdings among siblings in each generation. Average holdings are currently around 1.2 hectares (3 miles) and widely expected to drop to one hectare or less. In fact, nearly 50% of Indian farmers have land holdings of less than half a hectare.

The Indian farmer has subsistence income and is heavily in debt. The average monthly income of the Indian farmer is a mere Rs6,400 ($100). An estimated 50% share of the income is from farming and animal husbandry (mostly cattle) while non-farming activities account for the rest. This income barely meets household expenses and leaves little for savings or investment in new farming techniques. Indian farmers on average have loans of over Rs47,000 ($700). Unsurprisingly, over 50% of Indian farmers are in debt, and a mere 10% have crop insurance cover.

Farming is not the preferred option to earn a living. Most Indian farmers inherited the farm from their ancestors. A significant one-third of farmers, according to various farmer surveys, are willing to quit farming if presented with alternate employment.

In this scenario, understandably, the farmer has limited ownerships of farming assets such as machinery. The penetration of tractors in India remains well below 10% — by comparison, the adoption of mobile telephones has surpassed 50% — and most small and marginal farmers lease land from larger farmers.

The Indian farmer requires assistance on several fronts including policy reform, infrastructure development, institutional financing and, more importantly, innovation to address some of their key challenges.

How Will Innovation Benefit Indian Farmers? Will Farmers Pay for Innovations?

Agtech innovations can increase farmer incomes by improving the efficiency of farm operations, reducing costs, and de-risking farming considerably in the following ways:

  1. Improved productivity and diversification of farming activities.
  2. Optimizing the cost of applying inputs such as seeds, fertilizers, agrochemicals, mechanization.
  3. Improving supply chain efficiency and reducing the cost of borrowings.
  4. De-risking Indian agriculture by developing innovative crop insurance solutions and reducing supply-demand mismatch which causes price volatility.

Five agtech innovations that have the potential to collectively and comprehensively achieve the above are:

  1. Farming-as-a-service to make cost variable and make farming affordable to the majority of small and marginal farmers.
  2. Big data intervention through real-time capturing and synthesis of data to aid farmers in better decision making.
  3. Market linkages for the sale of farm produce to facilitate disintermediation and aggregation of farm produce so farmers reap a higher share of the end-consumer price.
  4. Fintech platforms to aid institution financing to reduce the cost of borrowing for farmers.
  5. Diversification to increase the sources of income for farmers.

Figure 1: Role of Agtech Innovation Mapped with Farmer Needs

Screen Shot 2017-03-16 at 12.12.02

Each innovation in Figure 1 addresses at least three pain-points for Indian farmers. Indian farmers have time and again demonstrated an eagerness to set aside convention and adopt new practices, as demonstrated by the following three key developments in Indian agriculture in the past decade.

  1. Small and marginal farmers are taking horticulture to new growth levels – in 2016 they produced approximately 290 million tons compared to less than 150 million tons in 2006. They are doing this as it fetches higher/additional income and is less working capital-intensive.
  2. Many farmers are using new equipment like a rotavator, a machine that breaks up the soil for planting, laser land levelers, solar-powered irrigation pumps. Those that cannot buy the equipment are renting it, even using social media for bookings!
  3. Growth in the cattle, poultry, and aquaculture feed markets in the past decade – they now have a combined size of $ 18-20 billion. This is a clear indicator that animal husbandry has been adopted to diversify income sources, improve the working capital situation (refer Figure 2) and allow for non-farming income from alternative sources in drought years.

Figure 2: Schematic of a Farmer’s Working Capital Requirement During the Year

Screen Shot 2017-03-16 at 12.26.48

As demonstrated in Figure 2, in the case of food grains, farmers enjoy liquidity only twice a year – at harvest time of Rabi (April-May) and Kharif crops (October-November) respectively. Horticultural crops (read vegetables) offer more frequent liquidity due to the short lifespan of those crops. Animal husbandry (read dairy) offers the best liquidity of all because surplus milk is sold for cash daily with winter months yielding better than summer due to the availability of better fodder resulting in higher milk output. Both horticulture and animal husbandry have demonstrated significant easing of working capital requirements for farmers and this has promoted the higher adoption rate of these farming activities.

Given the cash-strapped financial status of the farmer, the cost of the innovation will need to be financed by other constituents in the supply chain. The likely buyers of agtech innovations who stand to gain from it, and are therefore willing to finance the costs, are mapped in Figure 3.

Figure 3: Likely Buyers of Agtech Innovations in India

Screen Shot 2017-03-16 at 12.22.19

Farmers have demonstrated willingness to pay for innovations that have immediate tangible benefits; be it hiring of implements or farm produce aggregation for a better price and higher income through diversification.

This also implies that entrepreneurs working on agtech innovations must prepare themselves for sales through a B2B business model for the initial period of sustenance.

Four Recommendations to Facilitate the Adoption of New Innovations by Farmers

    1. Rural Incubation Centre: The Government of India entrepreneurship fostering initiative, Atal Innovation Mission, provides grants of up to Rs100 million ($1.5 million) to each center, but should give preference to incubator centers set up in rural areas and targeting agriculture innovation.
    2. Rural Entrepreneurship: Agriculture alone cannot provide a sustainable living for India’s teeming rural youth. Rural youth will not be tempted to migrate to urban areas for employment if they are provided with entrepreneurship opportunities in the villages. These opportunities can center around services that are in high demand such as aggregation, farm produce storage, soil scanning, implement rentals and cattle feed centers.
    3. Village Data Hubs: Farming decisions are taken based on previous years’ data but the availability of real-time and accurate current year data is limited. Institutionalizing farmer advisory services through village data hubs will help capture real-time data from in-field interventions such as drones, sensors, IoT and satellite images, with access of this on smart phones which are today affordable. Innovations should drive real-time capturing and analysis of the data and the disaggregation of data at the farm level.
    4. Village Adoption by Research Institutions: Simple mechanisms to transfer technology from research institutions and agricultural universities to farmers; and incentives for institutions to adopt clusters of villages to facilitate “faculty-researcher-student-farmer” interaction, will provide much-needed support to the farming community. The village adoption program of National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) in India, trained farmers in some food technology innovations, for

In conclusion, there needs to be a concentrated effort from investors and innovators to develop and deploy innovation to make farming an aspirational profession in India.

As Will Rodgers wisely said, “The farmer has to be an optimist, or s(he) wouldn’t still be a farmer.”

¹The population in India is an estimated 1,326,801,576. Of the over 167 million rural households in India, approx. 90 million households are engaged in farming. The average farming family has five members, thereby near 450 million people directly dependent on farming.

African entrepreneurs in the age of data revolution and personalization of everything

By
Tekedia Editors
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0

Technology is redesigning industrial sectors and transforming people, nations and governments. As we continue to experience innovations in A.I, machine learning and overall computational models, new business models and processes will emerge. Personalization is going to become the business model standard of the 21st century.
Emerging technologies will bring the individual to the epicenter of solution development and spur design and development of more and more customized and need-based products and services. This will allow ‘on demand’ and personalized access at affordable prices and empower the individual to have a say in solution development and the governance of his or her data.
Fintech startups have been leading the way, leveraging data backed insights to develop customized financial products and serve financially excluded populations. However, the potential is much larger for disrupting the way companies, governments and donors design and deliver solutions and engage with the BoP consumers.

How we design solutions: From customization to precision

Today there are 15 billion connected devices worldwide, generating massive amounts of data about people using them. About 725 million people in Africa are projected to subscribe to mobile services by 2020. The resulting explosion of data will fuel deeper insights informing customized solutions, leveraging emerging technologies. Blockchain and AI enabled smart contracts will enable personalization of nearly everything across the product life cycle. Mobile phones will serve as a medium for registering and serving about 400 million people in Africa who today lack any official form of identification.

East-Africa based Tala, for example, is a data science and mobile technology company which is already gathering information about a customer from over 10,000 data points to form a financial identity with a credit score within five seconds. Precision medicine is beginning to target an individual’s personalized needs using a combination of genomics, Big Data and predictive analytics. Going forward, this will also inform more targeted public healthcare approaches and allow greater precision in disease surveillance.

How we deliver solutions: Accessibility and affordability for all

New insights will allow further segmentation of BoP markets, driving more informed and personalized marketing, pricing, delivery and financing strategies for improving access. The healthcare sector, for example, will see a transition towards personalized delivery, increasing access and affordability. While telemedicine and mobile health services have already facilitated ‘on demand’ medical advice, emerging technologies will drive a new wave of personalization. Wearables will provide people with data and tools to make better health decisions and also be accountable for their decisions.

Big Data in combination with predictive analysis and newer forms of remote diagnostics will shift health and disease management from being reactive to preventive, reducing costs for patients and healthcare providers alike. Similarly, IoT and Big Data will encourage insurance providers to rethink their business models and client interaction. For example, sensor enabled real time feedback and predictive analysis of consumer behavior can shift property and casualty insurance from a ‘reimbursement’ model to a ‘prevention and loss control’ model.

How we engage with the individual: Enhanced accountability and empowerment

Personalized and decentralized solutions will drive redistribution of power, accountability and decision making to the individual. Personal data encryption and decentralized data management will redefine the way data is shared and hence, what data is being used for solution development.

MedRec and IBM Watson Health are examples of innovators who are working on creating Blockchain enabled data management system for health records and strengthening a patient’s ability to manage and own his or her data. Empowerment of the individual will also extend to production itself. Currently CAD files for 3D Printing is restricted in use owing to issues around intellectual property (IP) and design theft. Blockchain can overcome these issues via smart contracts and trigger exponential use of 3D Printing.

Cases

  • Health providers are able to prevent more than USD210.7 million in healthcare fraud in one year using predictive analytics (Source: mapr.com)
  • Market for personal 3D printers increased 33% in 2015 (Source: 3Dprint.com)
  • Worldwide Wearables Market increased 67.2% in Q1 of 2016 (Source: IDC)
  • Personalized medicine market will be worth over USD149 billion by 2020 (Source: Marketwatch.com)

Rounding Up

It is here – the era where everything can be personalized. As internet penetrates across Africa, this will be easier across different industrial sectors. Entrepreneurs must understand this design and be “open” as they architect products and services. Products of the 21st century will be personalized.

Full Text of Nasir El-Rufai Memo to President Buhari – “Immediate and Medium Term Imperatives for President Muhammadu Buhari – September 22, 2016”

By
Tekedia Editors
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4

Governor Nasir El-Rufai of Kaduna State,  in September 2016, sent a memo to President Muhammadu Buhari arguing that their party, the All Progressives Congress (APC) has made the situation in Nigeria worse than it met it by failing to be proactive in taking key decisions in a timely manner, SaharaReporters has learned.

In April 2015, I sent a short memorandum to you, Sir – then as president-elect. We never discussed the memo in detail and I am not even sure you got to read it bearing in mind the levels of human traffic visiting you in those heady days. I crave the indulgence of Mr. President to please read the memo (attached herewith as Annex II) and see how like every aspect of life, the memo was sometimes presciently accurate and at the same time off-target! It is on the basis of that message, and my commitment to write anytime I feel compelled that matters of urgent national importance confront you, that I address this with greatest respect and humility.

Read the full text here (PDF).

Here are major excerpts from El-Rufai memo to President Buhari:

1. It is 1984 for you all over again— only far worse…You must therefore put forward some organizing principles around which your administration would be designed that will enable Nigerians identify and adopt as a unifying vision for the next decade or so.

2. [These principles] should be national unity, social discipline, personal sacrifice and the constant signaling of hope for a better tomorrow.

3. You must through your words, your personal example and the selection of the team around you, unite our nation by creating a sense of inclusion that gives people of proven honesty, competence and commitment, roles in your government. The mistake of the outgoing regime of creating a strong appearance of an Ijaw enclave, or the Katsina-Kano cabal of Yar’adua, must be deliberately avoided.

4. A key requirement of setting the right tone and direction of your government is to choose the right people early to constitute your core team that will work in the State House…The quality and caliber of the personal staff you appoint, along with a handful of key executive positions will either reinforce the tone and direction of your government or contradict it…It is important that these persons are carefully selected with emphasis on integrity, competence, capacity and chemistry to work well with the President.

5. It is not difficult to reverse these negative trends and change the narrative to one of a nation with a growing, efficient and well-managed national infrastructure. All the plans and strategies are there. What is needed is political will, technocratic capacity and focus, which you, Mr. President must ensure are present here and now.

6. …We must therefore take advantage of our large internal market, natural endowments and comparative advantages in agriculture, minerals and human resources to be self-sufficient in food and fuels within your first term of office. It is neither impossible nor unduly difficult to achieve both goals.

7. The danger of this current state of affairs is that we are inadvertently creating successive generations of poorer, barely educated, unskilled, hopeless and angry children of the poor, side by side with increasingly richer, privately educated, skilled and optimistic children of the privileged. It is a demographic and social time bomb waiting to explode as the poor and hopeless youths are easy recruits of insurgents, violent politicians and criminals. Only you, Mr. President will appreciate this danger and do something about it with the urgency it deserves.

8. Government performance depends on political legitimacy and administrative capacity. It results from sound political vision, courage and the will of the President and other appointed and elected officials, supported by the administrative capacity of the public service…You have the vision, courage and will, Mr. President. The jury is still out whether your most senior appointed officials share these qualities, and this must change for the better, Sir.

9. Our public service today is too expensive, aging, outdated and inadequately skilled to discharge its mandate of providing administrative support to the political leadership. The nearly 600 MDAs at the federal level (and smaller number of counterparts at subnational levels) consume nearly 90% of our national revenues. This is why the FGN borrows over 100% of its capital budget! This is neither fair nor just.
There is a perception that your ministers, some of whom are competent and willing to make real contributions, have no clear mandate, instructions and access to you. Ministers are constitutional creations Mr. President and it is an aberration that they are expected to report to the Chief of Staff on policy matters.

10. Mr. President, there is an emerging view in the media that you are neither leading the party nor the administration and those neither elected nor accountable appear to be in charge, and therefore the country is adrift. It is the view of many informed citizens that while you are actively fighting corruption, the institutional weaknesses that enabled it to thrive under Jonathan, and the persons that participated in it, and oiled the system are still very much in charge, and many are around you.

 

The problem with Google’s claim of training one million Africans on Digital Skills

By
Ajayi Bode
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0

Google lied and the evidence is everywhere – it did not train 1 million Africans. It is working under the illusion of its robots and AI on its definition of training.  The fact is this – no employer of labour, in Nigeria or anywhere in Africa, has experienced the impact of 1 million new-ready young Africans with digital skills in the last one year.

One million is huge – that is 1,000,000 people. Where are these trainees who have been prepared and unleashed into the African economy, by Google?

They are nowhere because Google has not done anything on that scale in Nigeria, Kenya and South Africa.

The Claim

Google announced that it has reached the 1 million milestone in its Digital Skills program, via via newsletter.

Last April, we set out to help bridge the digital skills gap in Africa when we pledged to train 1 million young people in the region. Today, we’re excited to announce that we’ve met that target. One million Africans have now been trained and equipped with the skills they need to navigate and take advantage of the opportunities of the web.

But that’s not the best part of the story. Through these new digital experts, the continent is seeing an increase in the number of young people equipped with digital skills—a domino effect of sorts.

The drama continued:

In 2016, Segun Abodunrin hired his first two employees in Lagos. Just a year before Segun had never thought about opening his own business. But after taking our digital skills training program, he went on to start Tway Media, a digital consulting and training company credited to have trained 5,000 young Africans in 2016 alone.

Sure, the company trained 5,000 young Africans in 2016. This means that this happened within a year since Segun was also trained in a program that started in April 2016. He might have done that, actually, but in the real sense, there was no valuable training than mere watching prepared slides that offer nothing.

The Corporation Insults

These foreign companies like to insult we Africans as they take us for cheap. They come here and use words carelessly in ways they cannot do in their native countries. Let Google go to the state of Louisiana and show slides to 3000 youth, and then go out to claim it has trained 3000 people. The government will respond in kind, for deception.

But they come to Africa and do all kinds of nonsense and deceive everyone.

In Kano where I live, we understand training and we know the impacts. There is real training that changes lives. Google is providing PR training and not real training. Until they begin to do the real training, they do not have to associate their shows with the name of Africa.

Notice that this is not just Google, GE, Samsung and all of them are training in one city or the other in Africa, every month. But if you look carefully, they are doing marketing which promotes their businesses.

Those are not training, Those are market outreaches.

Market Outreaches and Training

When foreign companies train, they prepare you to use their products. There is nothing wrong with that except that the companies do not offer full disclosures on them. They create impressions they are preparing people for unbiased, un-tethered, and platform agnostic skills.

Google can train on how to make money via advertisements because they need people to bring adverts in their platforms.

Samsung may support people on making apps because they want good ones they can use to drive their Galaxy phone sales.

They all have the rights to these growth strategies. But they have to re-classy them as marketing, not training.

The is the brief of the Google training, from the newsletter

  1. We will provide offline versions of our online training materials to reach individuals and businesses in low access areas where we were unable to hold physical trainings. Our goal is to ensure that everyone, regardless of location and online status, is able to access these trainings.

  2. We will deliver our offline trainings in Swahili, IsiZulu and Hausa. We understand the role of local languages in communicating with rural communities of Africa and want to ensure that more non-English speaking Africans get an opportunity to take these trainings.

  3. Our offline training effort to reach students, job seekers and business owners will continue through face-to-face trainings managed by our partners.

  4. We will hold regular meet-ups to drive engagement around the value of the web at the community level with those trained, Policy makers and influencers within those communities.

  5. Finally, we’ll continue to focus on achieving gender balance by ensuring that at least 40 percent of the people trained are women.

It has all the nice structures but the detail is where the devil resides. You can get many free materials without the trouble of this online.

Follow Andela

Andela is a model of empowerment and training. They are technology blind, totally agnostic, and they make people better. That is what you call TRAINING. By the time you go through Andela program, you become a knowledge expect with deep domain skills and capabilities.

Andela training makes one a leader and jobs come. If you do not want to work for another person, you have all you need to create something new. You can innovate. That is training.

Google is light-years out of sync with the quality and scope of Andela. Andela training is what we want and that is the spectrum of the definition of empowerment. You get immersion and be prepared to attack the world of opportunities.

It is like attending our good universities where despite all the challenges, you are prepared to succeed.

Google with their cheap PR insults great firms like Andela who are genuinely working to improve African youth with real training and education. Google should stop the deception.

Googel is doing well for Africa

For all foreign companies in Africa, Google remains the most impactful in many ways. It continues to explore how to make its communities better. The fibre optic protect could transform African cities that get it. By making its products largely free, there are many possibilities for developers and users. Many people feed on these Google business model of allowing people to tap their products for free.

Google Inc. is scaling up investment in Africa by laying fiber optic cable, easing access to cheaper Android phones and training a workforce in digital skills as the U.S. technology giant seeks to expand on the continent.

“We laid about 1,000 kilometers (621 miles) of fiber in Uganda and we are busy doing about 1,000 kilometers in Ghana,’’ Google’s South Africa head Luke McKend said in a phone interview. “We want to make sure that we cover all the bases. We want to train people and make sure that they have the devices and are able to connect to the internet.’’

Let it continue to do that. But whenever it wants to claim this training thing, it has to calibrate its grammar. Here in Nigeria, we know what it means to have a challenging educational system. If you run the percentage distribution of Africa, Nigeria should have gotten at least 300,000 trained Google youth. It trained 1 million in Nigeria, Kenya and South Africa.  I will be proven wrong but I do not know if any person can claim that we have injection of 300,000 young people in our economy with top digital skills.

About 1 million people in Nigeria, Kenya and South Africa have been trained by Google over the past year, yet many had to complete their courses with limited internet access due to unreliable coverage and high data prices, McKend said. The Mountain View, California-based company is now turning its attention to web-focused skills training for small businesses across Africa.

If Andela graduates and sends 100,000 into Nigeria today, everyone will know. That is what we mean by impacts.

Sure, Google is also doing good on the Project Loon which uses solar-powered balloons to connect people in rural or remote places. We thank Google and hope it continues that. This is far better than the hosting idea.

(Few years ago, Google came up with the idea to put small businesses online. They have this website where you can get a page to advertise your business. For them that was the main way to help local companies go digital. Of course, people that work online understand the attraction of digital presence. You do not just become a page in the sea of thousands and expect to have any uniqueness. Using Gmail for business is not that great; you need a domain. That program did not work out well.)

Rounding Up

Simply, Google continues to do well. But on this training claim, make it clear that you are preparing people on how to use Google products and tools to make money. That is the disclosure you have failed to add. If you want to train young Africans, please work with Stanford, MIT and Andela to develop a program. Once you have that and you begin to deploy them, we can then start counting the PR as training.

Thank you.

(Image Credits: Google Blog)

 

What Africa can learn as IBM redesigns Dubai’s business grid with blockchain and Watson

By
Ndubuisi Ekekwe
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0

IBM has a history of elevating the game of technology, finding ways to transmute itself as a pioneer and an established reliable innovator. It continues to invest in emerging fields, filing patents like it is collecting high school prizes. IBM inventors received a record 8,088 patents in 2016 representing a diverse range of inventions.

Besides the Watson, the IBM supercomputer, one of the most important units in IBM today is the IBM Blockchain business. IBM is not in this business for the largely mundane thing of moving money from one region of the world to the other using Bitcoin. Certainly, it is not interested in the gyration of the price of the cryptocurrency.

Watson is an IBM supercomputer that combines artificial intelligence (AI) and sophisticated analytical software for optimal performance as a “question answering” machine. The supercomputer is named for IBM’s founder, Thomas J. Watson.

IBM cares about the technology which underpins Bitcoin – the blockchain. Blockchain is one of the most important technologies which have been invented in the last few decades.

A blockchain is a distributed database that maintains a continuously growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block. By design, blockchains are inherently resistant to modification of the data — once recorded, the data in a block cannot be altered retroactively. Through the use of a peer-to-peer network and a distributed timestamping server, a blockchain database is managed autonomously. Blockchains are “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically

Forget the hype, on its face value, the technology can accomplish many things not just in the long-term, but right now. It can help to transform cities and governments – making them more agile and cheaper to run.

How blockchain transaction works

Wiring the New Business Grid: The Blockchain Grid

IBM has built a fusion between IBM Watson and IBM Blockchain. IBM Blockchain provides the private blockchain infrastructure of distributed peers that replicates the device data and validates the transaction through secure contracts. Watson IoT Platform translates existing device data, from one or more device types, into the format needed by the blockchain contract APIs. Through this, IBM offers a set of customized service engagements allowing clients to experiment and innovate with the IBM Watson IoT Platform and blockchain technologies.

What is happening here is profound because IBM has brought hardware, via IoT, into its blockchain business. With its experience in hardware building servers, computers and intelligent systems, IBM is one of the few companies that can bring blockchain technology into the mainstream of citizens and governments.

Most others will remain at the software level, but IBM will use blockchain to bring intelligence to what GE has called the Industrial Internet.

The Industrial Internet is the integration and linking of big data, analytical tools and wireless networks with physical and industrial equipment, or otherwise applying meta-level networking functions, to distributed systems.

With this integration of Watson and Blockchain, IBM can build a new grid that will run the world – the blockchain grid. This is going to be as important as the electricity grid and will permeate any level in our lives and governments. It is the new world order that will shape any industrial as we know it in the 21st century.

IBM Blockchain

 

Making a Redesign and Disruption

Blockchain will redesign commerce and industry. That will bring disruption across industrial sectors.

The blockchain technology has the potential of disrupting industries such as financial services, remaking business practices such as accounting and auditing, and enabling new business models. For agile firms, to avoid disruptive surprises or missed opportunities, strategists, planners and decision makers across industries and business functions should investigate applications of the technology.

The key attributes of the technology are the following:

  1. Security – hacking is impossible given the ledger is distributed across thousands of computers, reducing server maintenance requirements and improving security for banks.
  2. Transparency – the sender and recipient of each transactions are recorded and all transactions are publicly available for inspection.
  3. Privacy – users are anonymous and can move money around instantly and securely. This allows banks to save time and reduces costs on international transactions.
  4. Risk – currently, if a bank’s system goes down, users are unable to perform transactions. Using the blockchain technology, the bank’s system would continue as normal.

The Dubai Experiment

IBM is partnering with Dubai to advance the nation’s blockchain strategy.

IBM is collaborating with Dubai Customs, Dubai Trade and its IT provider DUTECH, to explore the use of blockchain for a trade finance and logistics solution for the import and re-export process of goods in and out of Dubai. Using Hyperledger Fabric and IBM Cloud, the blockchain solution transmits shipment data allowing key stakeholders to receive real-time information about the state of goods and the status of the shipment. Taking the example of a shipment of fruit, stakeholders involved in the process will receive timely updates as the fruit is exported from India to Dubai by sea, and then manufactured into juice in Dubai, and then exported as juice from Dubai to Spain by air.

We do think that this project will extend from Customs to Central Bank and anything you can imagine in the near future. Essentially, Dubai, as a nation, can live within the IBM technologies. IBM is using IBM Cloud for this and that will help it attain any level of integration it needs to build a very seamless product.

As you read further that press release, you can see where this is going

Additionally, as part of the solution, IBM is also working with du, a UAE-based telecommunications service provider that is conveying data from internet of things (IoT); Emirates NBD Bank, the letter of credit issuing bank; Banco Santander, the letter of credit responding bank; Aramex, the freight forwarder; and a leading Airline, as the airway carrier.

IBM is working with telecoms, working with the banks and other strategic partners. When IBM finishes, one will expect that some of these partners will cut-off existing relationships if IBM experiments work. With that, IBM will become the engine that runs the bank, the freight forwarder, the airline and more. Practically, IBM can build a new financial and business grid within its IBM Watson-Blockchain portfolio.

As has been noted, the “potential applications of blockchain are limitless, ranging from storing client identities to handling cross-border payments, clearing and settling bond or equity trades to smart contracts that are self-executing, such as a credit derivative that pays out automatically if a company goes bust or a bond that regularly pays interest to the holder.”

Implications for Africa

Africa has a lot to gain from technology. Most systems are broken and technology can provide real impacts. At both firm and government levels, Africa needs affordable technologies that work. That is why cloud computing will be a winner in the continent. Blockchain falls into that league also.

Globally, IBM is rapidly expanding its blockchain capabilities and actively working with companies to understand what it takes to make blockchain ready for business. Financial services, supply chains, IoT, risk management, digital rights management and healthcare are some of the areas that are poised for dramatic change using blockchain networks.

Technically, there is no sector in Africa that IBM Blockchain business cannot affect. We do think that this is going to be the real smart city initiatives without the expensive feasibility studies. Blockchain will make this a piecemeal process which will later converge into one hub. IBM is ahead and we do think once the Dubai experiment is over, forwarding thinking nations like Kenya and South Africa will sign-up IBM for help.

For countries and their institutions, struggling to modernize their outdated legacy systems in the face of increased pressure from decreasing foreign earnings, digital challengers and cyber criminals, blockchain represents an opportunity to rethink much of what they do and redesign business processes.

Nigeria and Angola will benefit significantly here as they streamline businesses in the period of uncertainties fueled by diminishing value of commodities.

It is not just for the big banks, the blockchain applications can make transportation, corruption fighting and management of social benefits better. For the financial services sector blockchain offers the opportunity to overhaul existing banking infrastructure, speed settlements and streamline stock exchanges. Thus, the shared public ledger has the potential to radically simplify banking by reducing costs, improving product offerings and increasing speed for banks.

The promise of an integrated African bigger stock exchange will happen faster under blockchain technology. African exchanges are still analogue. The promise of making them fully digital and integrated is catalytic to unlock more value.

Rounding Up

Blockchain will cause a major disruption in the business ecosystems as we know it today. Expect banking, insurance and all major industrial sectors to change.If IBM succeeds in Dubai, we will begin a new phase in human civilization that will redesign everything we know.  The interesting thing about IBM is that it is not just selling blockchain, it is bringing blockchain with the intelligence of Watson.

We have to welcome this and understand the new reality of global redesign. Buy hey, African entrepreneurs must respond to the possibilities and opportunities, fast.

 

(Sources: Reuters, IBM, Deloitte, Wikipedia)

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