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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.

Rulers Of This World – Algorithms, Knowledge And Information

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The world is being redesigned. Information and communication technologies are changing the structure and composition of global commerce and industry. This is a new economy anchored on the powers of microprocessors.

 

Today, the classical economics theories of factors of production and comparative advantages of nations are still relevant. However, a new concept has evolved to diminish their impacts in international market.

 

As we globalize and Internet penetrates across the world, factors of production can be fused with ease using technology in what I will call ‘knowledge cluster’. That has been the business philosophy of outsourcing. You can buy any knowledge irrespective of distance and integrate it locally in your process.

 

Likewise, the sources of fund have become global and local capital is not that very important. So, local unavailability of capital may not be a limitation to a bright business idea.

 

If you are looking for labor, you can easily access a pool anywhere on earth through the internet. Land has since diminished to be a major factor in location and localization of firms since many firms are knowledge firms and do not need land to exist.

 

Salesforce displaced GM in the Dow Jones Industrial Average. Google has since disrupted old established industries, primarily by competing with Algorithms, Knowledge, and Information (AKI). It matters not they may not have large land mass. With AKI, they can win any battle because that is what matters.

 

Algorithm provides the intellectual base to compete. Information helps firms to stay focused on what customers want, especially in web based firms. The algorithms provide the means to process the information. When the information is available, knowledge is built to develop strategies in the market place.

 

Today, we have grid computing and cloud businesses and progressively transitioning to physical asset-less enterprises. Certainly, we will still have businesses that support the computer powers that power firms, but it is possible that major firms can exist virtually in this age.

 

This observation advances the notion made in old classical economics theories.  For the fact that the world is more accessible, the notion of comparative advantage while important is not potent as it used to be. In the old days when some of the theories were formulated, manufacturing dominated with minimal service industry.

 

Instead of obsession on comparative advantage, firms must focus on core competence.  The latter is internal while the former in most cases is external. You do not have to focus on making chocolate because your country produces cocoa, but you must develop a better production system that makes your chocolate production lean and nimble to be competitive, irrespective of your location.

 

In all these dynamics, what is changing the concepts is knowledge as a factor of production. Knowledge redesigns the mix and opens up new issues in business strategy and marketing.

 

Without being a knowledge economy, Angola cannot focus on developing oil drilling technologies despite the need for it.  Whereas Japan could develop the technologies and sell to them, though, it has minimal local needs for those technologies. As Japan modernizes its technologies, it understands that its competition is not coming from Angola, but say Germany.

 

So, it is important to understand that some of the theories developed in the agrarian and industrial age are not relevant today. The textbooks must be modernized and students must be brought up to date accordingly.

 

Competition today has assumed more amorphous forms owing to the drastic impacts of technology in shaping the tastes of consumers. And one thing that is central to this taste is information.

 

This information changes everything. Unlike the saying:  ‘you cannot eat your cake and have it’; I know that information is non-rival. In other words, the consumption of information does not exclude another person from consuming it. That you read a story online does not prevent another person from reading it.

 

This concept is a key fundamental change to the old marketing and sales strategies. When you sell your cocoa to one customer, it prevents you from selling the same cocoa to another customer. But in this area, that whole concept has since been diminished.

 

A newspaper can make its online content free and anyone can read it. While not selling it directly, someone reading that article brings revenue through a third party arrangement based on how many people visit that site. The focus is to get more people to consume more information on the site because it creates value for them.

 

But there is another caveat to this: why information is non-rival, it has time content.  That is why information is physical since it costs something to produce it. In other words, information is not free and it has an element of time. Think about it: does it matter today if a newspaper has a heading that says: Obama wins the Presidency.

 

Sure, that information is not useful because it is not timely. This becomes more interesting when you trade on stocks. A piece of information can make someone rich (say, insider trading) and that is why SEC will pursue people that partake in insider trading because the value of that information becomes so useful than when it is in public domain. The difference between the same information is time. When everyone has the information, it becomes less valuable. This clearly shows the physical nature of information as it can lose value with time.

 

As technologies transform the global economy, knowledge will become so important. After all, this is a knowledge century. The transformative value of commercial assets which for some firms is information will continue to change marketing and competitive strategies. Understanding these changes will make a firm adapt, evolve and survive this innovation economy.

Where Biology Inspires Circuit Engineers – The Neuromorphs

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The fundamental philosophy of neuromorphic engineering is to utilize algorithmic inspiration of biological systems to engineer artificial systems. It is a kind of technology transfer from biology to engineering that involves the understanding of the functions and forms of the biological systems and consequent morphing into silicon chips.

 

For instance, the study of the structure of the muscle in an animal inspires the creation of locomotive robots that do not rely on heavy and power hungry servo motors. The fundamental thing is to understand how biological nerve tissues represent, communicate and process information. That would become the prelude to engineer electronic devices. Understanding the biologically algorithms of animals are vital and fundamental to reverse engineer the biological systems information representations and then develop systems that use these representations in their operations.

 

The fundamental biological unit mimicked in the design of neuromorphic systems is the neurons. Animal brain is composed of these individual units of computation, called neurons and the neurons are the elementary signaling parts of the nervous systems [9]. Neurons, which have common shape, produce electricity or chemical signals to communicate with other neighboring ones.

 

Though these neurons are similar in shape, different connections with each other, muscles and receptors produce different computational results in biological systems: locomotive control, perception, sensory processing, auditory processing etc. Neuron is made of made up of input area (the dendrite) and output area (the axion) and is connected with other neurons by synapses.

 

Since neurons are the basic cells of the nervous systems of all kinds of animals, building silicon neurons (or neuromorphs) endowed with fundamental life-like characteristics, could enable the emulation or modeling of the neural networks in biological nervous systems.

 

By examining the retina for instance, artificial neurons that mimic the retinal neurons and chemistry are fabricated on silicon (most common material), gallium arsenide (GaAs) or possibly prospective organic semiconductor materials.

Layers In Technology Pyramid – The Closer To Top, The Higher Your Wealth Creation Power

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Technology is the leader of the enterprising world. And it leads using a constitution. Unlike the traditional political structure, this constitution is Algorithms written by engineers, scientists, etc and not congressmen and politicians.

 

The global competition is largely who has the best technical group to write the best one; in this case, Algorithms, that comprise of patents, technical processes, tools, and so on. As a nation develops, adopts, applies and diffuses appropriately the contents of this constitution, it elevates the lives of its citizens. The more innovation a nation pursues, the more it refines this constitution.

 

Economists have shown a correlation between Knowledge Economy Index (KEI), productivity and standard of living. The challenge for any nation is to improve its KEI number. Doing that involves good education, economic regime and other variables that help to improve technology capability.

 

The age of natural resources dominating global commerce and industry is gone. What matters now is creating knowledge and applying it. Some nations will create, others will merely consume. But wealth is concentrated at the creative stage and nations that focus on consuming, without creating technology will not prosper.

 

Even with abundance of natural resources, which in many instances, the consuming nations cannot independently process without the knowledge partners will not change this trajectory of limited national wealth without technology creation.

 

On this basis, I separate the two layers where nations use and compete with technology as upstream and downstream layers. It is like a two layer pyramid where the downstream is at the bottom with the upstream seated on top. What happens here is that some nations focus on the downstream layer while others combine both the downstream and upstream layers.

 

The most advanced nations combine the two layers as they seek international competitiveness. They provide technology roadmap that looks at the future and have plans to take advantages that technology brings.  They create and develop things and in the 21st century are classed as knowledge driven economies. In those nations, there is planning for continuity and technology succession.

 

For the other nations, usually developing, they compete at the technology pyramid primarily at the downstream layer. They lack the know-how to create things and commercialize technology intellectual properties. The nations are not driven by technology, rather commodities. They are prone to trade shocks and are usually economically non-vibrant. They fail to create wealth using technology and participate in the pyramid as consumers or prosumers.

 

Let me illustrate using Nigeria where they speak the language of petroleum. In the petroleum industry, there are the downstream and upstream sectors. While the upstream focuses on exploration of crude oil, downstream does the distribution and marketing.

 

The money is in the upstream sector, a major reason we have the foreign partners concentrated therein. That is where the knowledge creation is done and utilized in the industry. I am cautious to say, without the knowledge partners in Nigeria, helping to explore this crude oil, Nigeria cannot mine this product. Verdict: the oil will be there and of no tangible economic use.

 

This will follow a pattern where villages have water underneath them but no drilling expertise to harness the water for cooking and drinking. That is the problem of anchoring national strategy at the downstream level. It lacks inventiveness.

 

In Africa and many developing countries where ICT has been embraced, they rarely know that there is more value than what ICT gives them. Sure ICT has helped many developing countries to improve their business processes, tools and people.  They are so excited on the powers of quicker and faster communication. They savor the wonders of email, Internet and mobile phone and many more.  These experiences are primarily on marketing, distributing and installation of these ICT systems. They rarely make them and can only play at the downstream layer.

 

There economists point out repeatedly the innovations ICT has brought to the economies. I agree, ICT is wired for innovation in so many areas. Nonetheless, the good news is that there are more benefits up in the pyramid if you move up to the upstream layer. By not creating technology, our techno-economic benefits are limited and this will not change until we move up the pyramid.

 

Though this point can be illustrated with any technology, I will use the ICT because it is common and familiar to people. I have already illustrated the point in the petroleum industry where many developing nations depend on petroleum refining technology of the developed countries to extract the oil. Even if they develop technologies for the distribution, the upstream idea will triumph. Nations make more money to license technologies at the upstream level compared to the downstream.

 

Back to ICT, the upstream level will involve designing computing systems, cellphones, routers, device drivers, and all other infrastructures that enable ICT revolution. Instead of importing the latest cellphones, we will think how to design them. In 80% of the developing nations where mobile technology is used, less than 2% of the technologies are designed and manufactured there.

 

Yes, there are businesses that distribute and sale these gadgets and make marginal profits.  They can import a laptop from China at $500 and sell to their customers at $650. Because the barrier to entry is so weak, the margins are small.  Everyone is selling and there are shops everyone. They are technology firms to their nations because they can load the software and configure the networks and get the laptop working.

 

Compare that with giants like Intel and AMD that take a piece of sand (silica) and process it. At the end, that piece of sand of say a $1 can be sold for $3,000 because of the knowledge involved to transform the sand to a microprocessor. That is knowledge and the very best of human imagination and creativity. It is playing technology at the upstream level and that is where the value is.

 

Nations win at the upstream level because the sale margins are so huge because the products are niche and in most cases innovative with few players internationally. It is not just the trade or margins. Upstream technology layer create good jobs, whether in developed or developing nations. Some of the best jobs in Africa are in the oil giants where upstream technology rules.  You create enviable good jobs for the citizens. They have the money to spend and lift other areas of the economy. They hold jobs that bring honor and dignity and they use their brains to shape the world.

 

You can make the same case for Pharmaceutical firms that mix elements, compounds, etc to create drugs.  Some of the drugs are really expensive but the ingredients are cheap. People pay for the R&D invested in developing that drug.  In developing nations, they focus on marketing and selling the drugs. As in petroleum, ICT, it is all about the downstream. Why the big Pharma can have margins of 1000%, these entities can barely command 6% margins.

 

So in essence, in this century, there are opportunities for nations. For developing nations, if they continue to compete at the downstream layer of the pyramid, they will find it hard to move forward since competition is basically synonymous with technology. There is more risk, more knowledge requirement and more value at the upstream.  And we need to get there.

 

How do we do that? Our nations must have fundamental changes in our national policies on technical education or better Science, Technology, Engineering and Mathematics (STEM). That is the answer. I believe in knowledge and education evolves it. It is about expansion of commitments on microelectronics, nanotechnology, biotechnology, mathematics, chemistry, physics, computer science, engineering, medicine, and so on and within a generation we can become players at the upstream level of technology pyramid. And reap that great value therein.

Embedded Contract Design Is Alive In Nigeria – Talk To The Experts

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We provide world-class advisory and consulting services on all areas of semiconductors and microelectronics. Contact us for setting up your microelectronics labs, institutes and academies. We help clients develop innovative designs and custom IPs at both system and components levels as well as coordinate manufacturing at international foundries. We have networks of partners in Taiwan, US, France and Canada for fabless contract manufacturing for chip and PCB. We also provide international partner intermediaries services and academic curricula development.

In in embedded systems, we provide new insights and some of the challenges we are working on include:

  • USB microscope developed with android tablet and a student can observe and send report online to the instructor. Your tablet becomes a display for microscope
  • RFID Android based supermarket inventory control—-using Android tablet to access and monitor inventory
  • Speed monitoring system for road safety——Android tablet interfaced with speed monitoring system
  • Security monitoring system or aid for security personnel—-In which Android tablet will be interfaced with wireless security cameras. This is a surveillance system
  • Fuel or fluid level inventory control —–holding your tablet,you can monitor and control fluid level anywhere in the world
  • Automation and process control —interfacing sensors, relays,speed controllers etc to Android tablet through micro-controller wirelessly
  • Home Automation that controls your electricity and water taps.

 

We are Fasmicro – Nigeria’s leading IC house and embedded systems experts.