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Why African Leaders Must Learn From Turkey – Favorable Business Ecosystem Is Vital For FDI

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Turkey used to be known for its political turmoil. Investors used to see the country as an unstable nation with a radioactive financial market that sensible fund managers must stay away. The Judiciary has even tried to ban a ruling party. A decade ago, Turkey’s outlook was very bleak.

 

Speculative trading on bonds and currency by major Turkish banks permeated the financial crises that rocked Turkey.

 

Not anymore.  Turkey’s economic fundamentals are very good and the economy looks very promising. The population has a solid middle class with a good manufacturing base. Industrial clusters are emerging and researches in emerging technologies like biotechnology and nanotechnology are growing.

 

Besides, it has an untapped service industry, especially in finance, and the population is very young.

 

Their fundamentals are so good that this nation has attained a fairly relative stable inflation and interest rate. This is something which was not possible in the political crises ridden old Turkey. While Greece and Bulgaria are in crises, Turkey came out of the global recession with minor scratches.

 

Right now, Turkish banks will be buying some distressed Greek banks.

 

This country did not bailout a single bank. Also note that Turkey had lived on IMF loan for years. The whole theory in some African quarters that a loan cripples country is not valid here. The problem in Africa is that when loans are taken, politicians corruptly waste them.

 

You can take loan and come out stronger if you use the loan properly. Brazil was able to emerge a stronger nation despite its currency crises. Loans helped them.

 

I have come to understand Turkey more while working in my new book, Nanotechnology and Microelectronics: Global Diffusion, Economics and Policy, where one of the contributors discussed the technology transfer and diffusion paradigms of nanotechnology.

 

What happened? Few years ago, the duo of Prime Minister Recep Erdogan and his Deputy Ali Babacan engineered some reforms. They privatized some state firms, reduced government spending, strengthened and enforced financial and capital market regulations, and recapitalized the banks.

 

It is important to note that these were done transparently, unlike similar programs in Africa where reforms are designed to manipulate systems. The banking reform in Nigeria was done; but the regulation was so weak that after less than six years, the government had to bailout some banks.

 

The privatization program in Nigeria was executed so fraudulently that some firms were sold to politicians at extremely discounted prices. There have been allegations of rigging the nation’s stock exchange after the country’s richest man (according to Forbes) was involved in questionable trading on competitor’s equities.

 

So, Turkey did more that reforms; they followed up and executed them very well. Export is up; FDI continues to flow into Turkey. GE, Ford and host of many multinational giants have called Turkey home for producing their products and this has helped the nation’s manufacturing climate.

 

Africa must note that nothing comes by chance in this century. You must have plans. Turkey has positioned itself through education, reforms in capital markets, and other ways to attract global resources.

 

The world has heard them and the country is doing well. It is estimated that Turkey will be the next League of Nations after the BRIC countries of Brazil, Russia, India and China that will propel the world gross product.

 

It is time Africa revamps its leadership and provide roadmaps that can help citizens make Africa great.  We must bring people that can engineer new ideas to position the continent instead of recycling people which have not added any value for years. There are many smart and committed Africans around the world. It is time we get their ideas to move the continent out of our present stasis.

Video Phone Is Coming – Watch Out For Next iPhone

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I remain confident that the next generation smart phones will have video capabilities which will enable seamless communication. In other words, you can see your buddy on the phone while you guys are speaking on the phones.

 

For me it is the only thing that does not exist right now in smart phones. Apple, Logitech or Nokia could do this before this Christmas or next. I am certain that it will come.

 

Sure, the world has seen many video phones before.  That is not what I am talking about. I am talking about elegant new creators, similar to iPhone. They would be stylish with nice ergonomics.

 

The market is ready for these phones and I think they will do well. There are many markets it will cannibalize. It will eat into the airline business since people will see video to video while talking. Why travel when you can see grandma on video and she can see you?

 

It is possible they can make it so that you can project the video on a wall.

 

Yes, that brings the need for Cisco to have a family portable Telepresence. People, it is time they make one I can afford. The industry size one that costs around $35,000 is not for personal use.

 

If Cisco can make a portable one, I will get one for my family in Nigeria and we can talk live. Yes, I know there are bandwidth issues, but I think Nigeria is going to improve with time.

 

Have you noticed that if we have video phone, I can teach students in Nairobi right from my house in the U.S.  They have the phone, I have mine and they can watch me while I speak. It will be very cool to get to the level where people can communicate at that level.

 

Do you know that video phone will revamp healthcare delivery in remote Africa? Just ask the patient to position the phone and you can get a good assessment of the problems without even traveling.  People spend a lot today to do exactly that, but in the new era, all it will take is phone and wireless network (possibly 4G network).

I cannot wait for simple video phones that work.

Research In Motion, Blackberry Maker, Sacks 2,000+ Staff On Its Road To Extinction

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Research In Motion has confirmed that it will sack more than 2,000 people. The Canada-based dying giant will trim its total workforce by 10% after this layoff exercise, reducing it to 17,000 people. This is expected to be completed this week. They also made some changes in the management with the retirement of the COO, Don Morrison who was replaced by Thorsten Heins.

 

Nevertheless, the duo-CEO model remains in place. This is one of the companies where two people run the show, in the persons of Jim Balsillie and Mike Laziridis.

 

Few years ago, before the age of iPhone, RIM’s blackberry was the best berry in town. They were doing well with shares getting nearly to $90. Today, the share is below $40. They used to the giant in this game, but they have lost the baton to Apple and Google powered OS smartphones.

 

With no working strategy in sight since Blackberry phones and Playbook tablets continue to stall in warehouses, the best way to reduce expenses is human counts. And that is exactly what Blackberry is doing. They have noted that the job cuts were designed around  “eliminating redundancies and reallocating resources to focus on areas that offer the highest growth opportunities.”

 

One of the most promising areas for RIM right now is the QNX operating system which was created for its Playbook tablet. The challenge is just the advertising muscle and the support from 3rd party developers.

 

There is also the planned release of BB7 which has been pushed to August thereby putting more pressure on old devices which have been in the market for up to a year. It is expected that BB7 will do the magic because it is sleek and cool. BB7 is the Blackberry OS7 operating system which has been on work for sometime now.

 

Tekedia does not think that few of the BB staff in Africa will be affected by this worldwide layoffs. And we still doubt if this will work as what is killing BB remains in place and that is iPhone.

Insurance Firm Approves $600m Services Agreement With IBM As New Server Targets Africa

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Canadian insurer Manufacturers Life Insurance (Manulife) has awarded a seven-year services agreement to IBM, valued at CAD$630m (about $600m), to support its ongoing business growth, as well as continued evolution of its information technology operations. Under this agreement, IBM will advance Manulife infrastructure services for mainframe, midrange server and storage, desktop services, business continuity, disaster recovery and security.

 

IBM said the Canadian insurer will also consider the application of cloud computing and high-performance computing environments to accelerate and enhance the deployment of business applications.

 

Manulife Financial executive vice president, global services & chief information officer Joe Cooper said IBM’s expertise in the finance and insurance sectors also assists Manulife in the execution of its information services strategy by providing industry skills as required to support the businesses and customers.

 

IBM Canada vice president of global technology services Leslie Keating said the 10-year relationship with Manulife provides a strong foundation for us to share global expertise in cloud computing, infrastructure reliability and security. The two companies have been actively collaborated since 2002.

 

This is coming at a time IBM has just announced a new server (a powerful version of the IBM zEnterprise System that’s said to be the most scalable mainframe ever) to extend the mainframe’s innovation and unique qualities to more organizations, especially companies and governments in emerging markets in Asia, Africa and elsewhere.

 

The new IBM zEnterprise 114 mainframe server follows the introduction of the zEnterprise System for the world’s largest banks, insurance companies and governments in July 2010. The new server, which allows mid-sized organizations to enjoy the benefits of a mainframe as the foundation for their data centers, costs 25% less and offers significantly more performance than its predecessor, the System z10 BC server.

 

It is projected that clients can consolidate workloads from 40 x-86 processors running Oracle software on to a new z114 with just three processors running Linux, and over a three year period, total costs for hardware, software and support on the new z114 as compared to consolidated servers can be up to 80% less with similar dramatic savings on floor space and energy.

 

At a starting price of under $75,000 — IBM’s lowest ever price for a mainframe server — the zEnterprise 114 is an especially attractive option for emerging markets experiencing rapid growth in new services for banking, retail, mobile devices, government services and other areas. These organizations are faced with ever-increasing torrents of data and want smarter computing systems that help them operate efficiently, better understand customer behavior and needs, optimize decisions in real time and reduce risk.

 

IBM also introduced new features that allow the zEnterprise System to integrate and manage workloads on additional platforms. New today is support for select System x blades within the zEnterprise System. These select System x blades can run Linux x86 applications unchanged, and in the future will be able to run Windows applications. With these capabilities, the zEnterprise System including the new z114 can help simplify data centers with its ability to manage workloads across mainframe, POWER7 and System x servers as a single system. Using the zEnterprise Blade Center Extension (zBX), customers can also extend mainframe qualities, such as governance and manageability, to workloads running across multiple platforms.

 

IBM System z servers are also making inroads in emerging markets in Africa. Governments and businesses in Cameroon, Senegal and Namibia have all recently purchased new IBM mainframe servers.

How Africa Could Change Its Economic Geography

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About five hundred years ago, generations that lived apart did not experience any major change in their standard of livings. Global productivity was very low and man was generally poor. Yes, there were empires and kingdoms, but on average the world was on static economic expansion.

 

But with emergence of mass penetrated technology, things began to change. The industrial revolution was a quintessential moment in modern history. Technology brought productivity and man became richer. Standard of living on average improved. It remains till today that when technology penetrates en mass in any economy, national productivity improves, and living standards advance.

 

There is another caveat to this development. Intellectual property right (IPR) is a cardinal part of this productivity. Without it, technology will not advance and innovation is stalled. The old world was an era of weak IPR and that was instrumental to the lack of wealth creation. People invented things in arts, engineering, and medicine but no mass wealth was created. Lack of IPR prevented meaningful capitalism. It prevented the pursuit of innovation since ideas could be stolen and commercialized with no penalty. The return to innovation was very low and that was why the world had many inventors and few innovators.

 

Today, we read about inventors that developed nearly all the engineering principles in use today. They had ideas, bright people and created prototypes. They were celebrated as icons and legends. But many died poor. They could not transition from inventors to innovators, partly because lack of IPR unmotivated desire for commercialization, despite the presence of markets and engineering know-how.

 

Two things have changed the world: technology and IPR. While every culture has its technology which has helped it to adapt and survive, the same cannot be said about IPR. In ancient Africa, there were herbalists who could use herbs to cure the bites from the most poisonous snakes. There were women who could help deliver babies in the farm. There were orthopedic ‘doctors’ who knew how to repair the worst of bone problems. But in all these cases that involved extraordinary inventions, there was no IPR to protect the trade.

 

In contemporary Africa, the IPR that exists is not better than the one that existed 500 years ago in most western world. From Zimbabwe meltdown to ethnic clashes in Nigeria, many continue to suffer because of opaque and redundant property rights. In a continent that failed to develop a widespread indigenous way of writing before colonialism, many world changing ideas on science and medicine were lost through oral folklores and tradition. Unfortunately, not much has changed in preserving, owning and respecting IPR in sub-Sahara Africa.

 

In a continent known for years of impoverishment, poor leadership, and vicious intrastate conflicts, the United States has an opportunity to lead. With its generous citizens working in remote parts of Africa, America occupies a pivotal position in the future of the continent. The US must help Africa develop a strong culture of IPR and move it from pre-civilization era into the 21st century. Simply, Africa cannot prosper until its gets a practical and working IPR culture.

 

It does not matter how much aids and loans they get from foreign agencies. Without IPR, nations cannot innovate and without innovation, any economy dies a natural slow death. IPR is the catalyst that drives national technology policy, making it implementable and sustainable. You cannot have a better technology policy than a working IPR.

With a strong IPR, inventors could become innovators. Across the continent, there are crusades on technology policies; but no one is paying attention to the abysmal IPR culture. Weak IPR hurts Africans more than foreign trade partners. It destroys any African creativity. For instance, the Nigerian movie industry would have made more impacts on Nigerian economy if there is a strong IPR protection in the industry.

 

As the continent makes progress to redesign its economic landscape through supports from United States, the hurdle of IPR still persists. Over the years, I have noticed how difficult it is to sustain a creative technology venture in Africa. I founded a technology firm upon college graduation in Nigeria. But after few months, the business model was destroyed when anyone could use my idea to profit.  I closed the business and joined a bank. The laws are weak to protect from piracy and copyright infringements. This problem continues to undermine the abilities to have an organic evolution of African indigenous technology success.

 

It is an illusion for African governments to think that multinational companies will take them serious on the creative side of business when they allow boys in Accra, Lagos, and Nairobi to hawk pirated foreign software openly without consequences. Many African entrepreneurs suffer more from weak IPR than lack of infrastructures like electricity and road networks.

 

Having traveled across the continent, I have this confidence that US agencies and nongovernmental organizations could help beyond health and food by assisting to modern African IPR structure. A strong IPR will nourish the ingenuity and creativity in African arts, technology and business by empowering some of the least educated to have protection over their ideas.  When start-ups are guaranteed protections on their ideas, America will notice that some of the health problems in Africa can be solved by Africans. That pure greed to build wealth through innovation is universal and IPR will give that to Africans. Until then, the pace of development will remain in stasis.