Technology: The Last Frontier in Economic Challenges

By: Hruy Tsegaye

“Poverty can put you in a difficult state of mind, and a difficult state of mind can make it more difficult to escape poverty”. Jamele Rigolini.

1) The weak link in Economics

The science of Economics had always been a mystery for the layman, but the strange thing is Economics has never been an unambiguous discipline even for those who trained to be professional Economists. To make matters more complicated, regardless of our insight into economics, we still live by it!

Let us begin with the weak link of Economics principles. Most principles of economics are built on a simplified model of human behaviour, which the economists call the “homo economicus”. Although John Stuart Mill did not coin the term, the concept of the economic man was first introduced through his famous book, “The Principles of Political Economy”. Moreover, he even defines what the Economic Man is in his essay titled, “On the Definition of Political Economy; and on the Method of Investigation Proper to it”.  According to Mill, Political Economy perceives humans from one, a bit narrower, angle: “It is concerned with him [man] solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end”. (Mill, 2000, p. 137)

It is a concept in many economic theories, which assumes humans as agents with narrowly well-defined self-interest and who have the ability to make judgments toward their subjectively defined ends. The most notable element in this assumption is that the choices of the economic man are marked by rationality. Hence, to most economists and economic principles, the economic man is a rational and profit motivated man.

Because of this age-old principle in the science of economics, mainstream economists implicitly assume that the Economic Man is perfectly informed, rational, makes all kinds of optimal decisions, and can be squeezed into mathematical models that describe the aggregate supply and demand. Oh, how simple life would have been if this gravely erroneous postulation were right! The truth is that people simply don’t behave the way homo economicus would have them behave.

Fortunate for us, now the big players in the world’s economy are becoming aware of the illusions of homo economicus. The recent World Bank Development report is a witness to this awakening and there is no one better than the president of the bank to announce it. “Many development economists and practitioners believe that theirrational” elements of human decision making are inscrutable or that they cancel each other out when large numbers of people interact, as in markets. Yet, we now know this is not the case. Recent research has advanced our understanding of the psychological, social, and cultural influences on decision making and human behavior and has demonstrated that they have a significant impact on development outcomes”.  (Jim Yong Kim, 2015, p. 12)

The faulty rationale of homo economicus is now under a revision from a relatively younger branch of economics called Behavioural Economics.  This is an interdisciplinary field, which links cognitive science and Economics. It tries to answer the age-old question; what are the factors behind an individual’s decision? Broadly speaking, it refers to the attempt to increase the explanatory and predictive power of economic theory by providing it with more psychologically plausible foundations (Camerer and Loewenstein, 2003. P. 3-5).

Its central theme revolves around the study of effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices. Hence, it challenges the old notion of homo economicus and the rational man. Although there should never have really been any doubt about this, we now know quite definitively and scientifically that it’s not solely rationality that motivates/guides people’s economic decisions; and that the role of the biological brain and its psychological partner, the mind, are crucial factors in any economic decision.

A good example for this relatively new economic notion and how it has grasped the truth about the ‘real irrational market’ is the 2008 US financial bubble that resulted from the subprime mortgage disaster and perhaps caused the on-going Global Economic Crisis that has plagued much of the world since then. Perhaps the best literature to point to in order to highlight the causes of this crisis stirring the old canon is the highly critical paper commonly known as the Dalhem paper.

The paper clearly demonstrates how economists had been predicting outcomes and formulating policies based on the notion of homo economicus and the rationality of market agents while the 2008 crisis took place right under their nose that lead to an utter failure; neither in warning governments nor in averting the looming crisis.

As of this writing, this crisis was [and still is] overtly analysed in a manner based on the implicit assumption that market participants [agents] function rationally at all [or at least at most] times when making choices. Yet, in contrary to this notion, the market participants [agents] in the real world had been behaving irrationally [to the extent that it resembles a self-destructive pattern] when it comes to the real-world market regarding Mortgages; the participants were buying and buying even though they knew they couldn’t afford it!

None of the mainstream economists cared to pull a check on the notions of behavioural economics and study the real time reaction of market participants [agents] and how their assumed ‘rationality’ is pretty much unreliable.

It is not enough to put the existing model to one side, observing that one needs, “exceptional measures for exceptional times”. What we need are models capable of envisaging such “exceptional times” (Colander et al., 2009).

2) Is Technology the Ultimate Factor in Today’s World Economic Development?

Since, the purpose of this article is intended neither to discuss the shortcomings of homo economics nor to suggest alternatives to it; we will leave it where it is. Yet, one of the factors that make homo economicus impractical is a relevant issue to the central theme of this article and we will briefly see to it.

As it happens, one of the dynamics that make homo economics a failed attempt to formulate the ‘Golden Economic Theory’ is rooted in the nature of our world itself. We live in a continuously changing world and the behaviours of yesterday, often, are not good for today; they are either obsolete or futile.

If we stretch the concept of Homo Economicus and picture nations as economic men, what they should do is maximize their profit with rational decisions. So far, the economic policies in the third world (especially that of Africa) seems to follow this rule; and as a result their policy focuses on agriculture or industry, and investing precious dollars on hi-tech is frowned upon. It is not rational for a poor nation to spend millions on hi-tech; there are priorities! Hence, the ‘rational economic policy’ suggests, first cultivate your agriculture sector, then the industry then the service.

Yet, the world is changing, it’s a fast paced change and not even Homer’s swift-footed and super agile Achilles can catch up unless he has a head start. Regrettably, the poor nations are very far from a head start, they haven’t even really started! This change is disrupting the principles of economics and the poor nations can no longer remain faithful to the traditional Homo Economicus rules, it’s time to be rationally irrational.

Doubtlessly, for the past centuries, the fundamental principles of economics have been stalwart proponents of the status-quo— while the elastic ever-changing socio-cultural structures and the disruptive behaviour of humans have proved them wrong for countless times. In a world where change is the only constant, the rational man must go along with changes and the reasonable reaction to unexpected but unavoidable changes is to embrace them.

One such good example could be the application of Hi-tech in very backward nations. Let us say a fully functional, Artificial Intelligence Research Company started to operate in Ethiopia. Yes, at a first glance, the nature of this company seems a bit out of place. Researching on Artificial Intelligence (AI) sounds very generic and somehow impractical within the context of Ethiopia— the country is still struggling to build a self-sustaining agriculture sector! However, there is a new story in town; countries in the third world cannot afford to overlook technology anymore.

We are living in an era where the changes, more than any other time in history, are super-fast and radical. These changes are now creating environments that are marked by externalities beyond the perceived speculations of the mainstream economic theories. In such situations, no matter how irrational it sounds, economic restructuring is the only rational reaction— it is not enough to merely adapt but adopt the changes!

The coming decade is where technology will rise to its summit; revolutionary breakthroughs in bio, Nano, and digital technology, together with social-networking, 3D-printing, and crypto currency (beyond money) will trigger a fundamental transformation in all of our socio-cultural relations which will inevitably shatter the canons of today’s economic theories.

This article and the main theme of its topic tries to shed some light on the role in the third world’s development strategy of technology [hi-tech], which ironically and quite disapprovingly is undermined in Africa. The likes of the hypothetical AI Company in Ethiopia [in the third world] are the ones with the insight to adopt the upcoming technology, which most certainly will dictate the future. Yet, most governments of the third world nations stand in oblivion to their existence.

The power to shape and run today’s global economy is slipping away from the hands of economists to the people in command of technology and its invention. The transition was so swift, and even though few economists have noticed it, the world didn’t saw a radical adjustment of economic principles. We are now heading to an era where the futurists/technologists are going to lead the world’s economy and unfortunately, it is willy-nilly.

In one very farsighted report, farsighted regarding its time,  the issue of technology as the new control switch to the global economy is addressed rather in a very bold statement which perfectly depicts what role the soon to come technologies are going to play. The 2005 report of The Aspin Institute stated, “Now, with data serving as a basic resource and digital communications the means of transport, financial capital is moving throughout the world at nearly the speed of light and work is moving to the worker at the same velocity, reshaping the landscape of the world economy”. (Bollier, 2005, P. 4)

For the past two decades, computer science has changed the methodology, output, and infrastructure of the manufacturing and service sectors in ways that exceed the wildest speculation of the then-economists. The change is not just radical on the scale of the mainstream economists, but also optimal, cheaper, and decentralized. This is something contrary to the traditional progressive development strategy which stresses on a predefined transition Path; from Agriculture based economy to Industry and then to the Service sector.

In today’s reality, the application of Computer Science in any given nation’s economic sphere is the watermark of development.

In the developed nations, computers are now in total control of their industry, their automated agriculture, and their financial sector. Now we have established a hypothetical, yet fully functional, private company that works on the fields of AI and Robotics in Ethiopia, question is, is it really a geek’s ambitious bravado signifying nothing in that country’s real economy?

In a broader definition, AI is a science that tries to create a machine (computer software) that has a human like problem solving ability. Hence, in today’s economy, what better field is there with such a vast and sustaining prospect in the coming future than Computer Science and its pinnacle aka AI?

3) Technology, Development, and MDG’s Gumshoe

To answer this question (Is technology the ultimate factor in development?), first one has to see the trends of development strategy in today’s world and the measurements the third world nations are undertaking. More than any other times in the history of our planet, Governments and International organization are working together in anti-poverty movements. The best example of this movement is the 15-year long Millennium Development Goals (MDG) initiative.

Nevertheless, the movement, despite the tireless effort and capital poured on it, was not a big game changer in the world’s economic development. Furthermore, nor was the initiative a success in its attempt to uplift the human condition which is the immediate reflection of economic development manifested in the day-to-day life of more than 3 billion poor people around the Globe.

Although it has remarkable gains, it had failed to eradicate poverty in a greater range. “I am keenly aware that inequalities persist and that progress has been uneven. The world’s poor remain overwhelmingly concentrated in some parts of the world. Progress tends to bypass women and those who are lowest on the economic ladder or are disadvantaged because of their age, disability, or ethnicity. Disparities between rural and urban areas remain pronounced”. (Banki Moon, 2015. P. IIV)

As a result, world leaders are preparing a new movement to extend the MDG to the coming 15 years. The goal is the same, eradicate extreme poverty and the new motto seems “leave no one behind”! One has to ask, why are we doing the same thing time and again? The MDG was intended to end extreme poverty. Now mind this, the new bold ‘post-2015 development goal’ that is already been discussed by world leaders is also intended to end extreme poverty by 2030.

Here, we need to understand what it means when UN or World Bank say ‘extreme poverty’. According to the international standard, extreme poverty is set to the possession of less than 1.25 dollar a day. Notice how it is not concerned with broader quality of life issues or with the overall level of inequality in society. Then the Poor (the ones who live on the edge) are defined as those who earn 2.50 dollar.

This is really a ridiculous game of pragmatics; the MDG elevated more than 45% of people who lived in ‘extreme poverty’ to what? To ‘better poverty’? What does it mean when we say they used to earn less than $1.25 a day but now they get less than $2.50 a day? This is not meaningful progress!

The core of MDG is to eradicate poverty and when it fails to do so, the global leaders change its target so we won’t notice how far it missed the intended objective. One honest document, which you can see for yourself, is UNICEF’s 2011 publication. “While there is evidence of progress, it is too slow; we estimate that it would take more than 800 years for the bottom billion to achieve ten percent of global income under the current rate of change”. (UNICEF, 2011, P. 7)

There you have it; we need 800 years just to achieve a meagre 10% of the world’s wealth.

In 2015, there were still more than 1.3 billion people living in extreme poverty and more than 3.5 billion people live just on the edge. The prediction of UNICEF is indeed a creepy omen. Poverty rates have remained unchanged after all these years and, to make matters worse, it has recorded an actual increase in number of people who live in extreme poverty (less than 1.25 dollar) in some countries like Angola, the Democratic Republic of Congo and Gabon.

As of 2014, there are 51 nations all over the globe pushed aside to the thresholds of dissemination regardless of the MDG effort to eradicate poverty. The UN calls them the “fragile states”. Unless there is a faster way, this poverty is not just going to stay for 800 years, but it will soon consume these nations and their diffusion will happen in the coming few decades. Ethiopia is the 36th nation on this list. The testimony on fragile states read as follows: “They are the ones furthest away from the Millennium Development Goals. They will be home to more than half of the world’s poor after 2018. Yet the aid they receive is shrinking…” (OCED, 2014, P. n.a)

How are we going to eradicate extreme poverty, let alone poverty, in just 15 years while we are 800 years behind? Isn’t this one of the things that leaders of the world promised throughout the UN’s history? Forget the initiative’s core target, which was to eradicate poverty and forget the spectacular and gymnastically manoeuvred shift towards the motto of ‘eradicating extreme poverty’. Just ask the question how we are going to change, literally, the miserable life condition of half of the world’s population. If your answer is something like… “emm, well, let’s run the second MDG initiative for the coming 15 years”, it is capital WRONG!

To be more frank, if the same methodology is applied in this new post-2015 development strategy, then the world for sure is fated to expect the same promise and the same movement to be initiated as “the post-2030 MDG”. The disappointing fact is that it is inevitable even for the ‘the post-2030’ international development goal to embrace the same objective carried by its two predecessors— to eradicate ‘extreme poverty’. We are in a vicious circle!

Let us take a closer look at this circle. Many of the Millennium Development Goals are concerned on poverty eradication while the focus on the means to achieve it has undermined the role of technology, especially that of the hi-tech.

Yet, to the extent of our bewilderment, the UN and World Bank are still ignoring the role of technology in this strife and there is no better example than that of the 2013 report publication of the High-Level Panel (HLP). The HLP, established by the UN Secretary General to make recommendations on the post-2015 international development has totally ignored the implementation of technology for poverty eradication.

The HLP report addresses the issue of the strategies pursued by the MDG as somehow incompetent to achieve all the goals in the given time. From the looks of the new report, the methodology of the 15 year long MDG was not enough. “But to fulfil our vision of promoting sustainable development, we must go beyond the MDGs”. (UN, 2013, p. III)

Of course, we need to go beyond the MDG yet the ‘beyond’ suggested in that paper is nothing but an empty word magnified under the ornamental choices of the paper’s lexicon! It’s nothing but an echo of the failed MDG with minor additions of new mottos that are carefully orchestrated to sound a decisive and optimal model in the fight against ‘extreme poverty’.

To the baffling surprise of myself and many others, the “five big transformative shifts” of its paradigm [the post 2015 MDG] doesn’t even remotely address the question of technology, let alone prioritising its spread at grassroots level. On the contrary, a closer look at the events that took place in the economic progress of exemplary nations in Asia might hold the secret to this tiresome and seemingly eternal fight against poverty.

The MDG’s effort in Africa was epic failure! Well, for the international organizations “epic failure” is gruff and the term they used is a bit different. “The primary twin goal for many African Nations (ending extreme poverty and boosting shared prosperity) still lags behind the target and it calls for a sharp ramping up of effort”. (World Bank. 2013, p. 2)

On the other hand, the progress in East Asia is something unheard of. That region has experienced an exponential economic growth. Most importantly, the lives of the miserable souls in these Asian nations, who used to be excellent models and data feeds for MDG reports, are now greatly transformed. Extreme poverty, in most part of East Asia, has become a thing of history.

The World Bank’s global monitoring report holds a startling data on extreme poverty. In its latest (the 2015 Global Monitoring report) one can find that in 1990s the share of population below US$1.25 a day in Sub-Saharan countries was 56.6% (281 million people) while the share in East Asia was 58.2% (957 million people). In 2015 the share in Sub-Saharan is 11.5% (403 million people) while in East Asia it becomes 4.1% (86 million people). To make your day gloomier, the report concludes that by 2030 the number for the Sub-Saharan will be 4.9% (334 million people) and that of East Asia will be 0.1% (25,000 people). (World Bank, 2015, p. 19)

Now what can cause such a radical  positive transformation in East Asia — while Sub-Saharan nations failed despite their head start of 676 million people in the 1990s?

East Asian nations like Indonesia, China, Korea, Singapore, Vietnam, Taiwan, Thailand… Don’t the names of these nations start to ring one bell? Technology! As usual, professional Economists had their professional theory that attempts to explain this remarkable growth [in just 25 years]. And as usual there are multiple contradicting theories and they [Professional economists] will probably debate on it for the coming 25 years. From their various theories, let us focus on the theoretical notions of growth accounting.

The most common growth accounting method deals with three elements that contributes to the production of goods and services: labour, capital, and technology. Labour and capital, are known collectively as the “factors of production and these two refers to the workforce and to the capital goods (buildings, machines, vehicles) that the workforce uses in manufacturing some product or providing some service. Technology refers to all the methods employed by labour and capital to produce a good and depends on the development or acquisition of practical skills to get the job done more quickly and more efficiently. (IMF, 1996, P. 1-5)

The quintessence of the debate lies on one question, “Is growth the outcome of an accumulation of manpower and machinery, or is it the result of employing the latest technology?”

The IMF study document presents a comparative figure showing the rates of technological progress in the Four East Asian Tigers (Hong Kong, Taiwan, Singapore, and S.Korea) in 1980-90s. And it was compared with that of Japan’s and the United States’ during the same period. The East Asian Tigers had accumulated capital and increased labour participation at a much faster rate than the two world’s largest economies of the time. Yet, as you have guessed it, the Four Tigers productivity fraction is significantly attributed to innovative technology.

On the other hand, undoubtedly, progress in Sub-Saharan Africa on reducing poverty has been slow. The existing economy in this region is also hindered by high inequality and this headache [high-inequality] is becoming a prominent economic feature of these nations.

Despite such concrete evidence regarding the healing power of Technology, Africans and the MDG are ignoring it. In the beginning of this article, you have read that (the Aspin Institute paper) financial capital is moving throughout the world at nearly the speed of light and it is reshaping the landscape of the world; economy and work is moving to the worker at the same velocity. Is it not obvious that the champion of this radical change is Technology especially that of the information technology? Yet, the new post 2015 MDG’s gumshoe is not stretchy enough to put Africa’s poor souls under the cool shades of technology.

4) Technology and the Pro-poor Development Strategy

In the last ten years, there has been great interest towards harnessing Information and Communication Technology for Development, aka (ICT-D). The work is diverse and extends from the levelled shores of information technologies that provide infrastructure for micropayments to the zigzag-ish techniques of monitoring and enhancing the cultivation of crops via mobile apps.

The availability of computers and ease of information and related technologies do matter when it comes to the formation of an industrious society. The more the society is informed, the less the poverty persists.

One might argue that hi-tech’s contribution appear valuable only when viewed as a way to serve and amplify existing, successful development efforts, and not as technology that solves any of the myriad challenges associated with poverty. Yet recent facts, especially in the ICT industry show the opposite.

Even the pinnacles of hi-tech, such as AI, can generate a considerable amount of income in such backward nations. The unprecedented volume of data currently being generated in the developing world on human health, movement, communication, and financial transactions provides new opportunities for untapped market in the data-mining sector.  There are a lot of Computer Science graduates, yet unemployed youths in such nations are not even considered as the next team of people who are going to appropriately curate and clean up this data for future usage.

In 2014, IBM, the world’s largest Information Technology (IT) products and service provider, took an anticipated move in one of its AI project. International Business machines Corporation (IBM) launched a 10-year initiative in Africa at the cost of 100 million dollar. The project is called Lucy and it brings to Africa an AI computer called Watson and its other AI-ish cognitive systems.

In the last decade, Africa has been a tremendous growth story— yet the continent’s challenges, stemming from population growth, water scarcity, disease, low agricultural yield and other factors are impediments to inclusive economic growth”, these were the words of Kamal Bhattacharya, Director, IBM Research – Africa. Announcing this move the director claimed “With the ability to learn from emerging patterns and discover new correlations, Watson’s cognitive capabilities hold enormous potential in Africa – helping it to achieve in the next two decades what today’s developed markets have achieved over two centuries”.

As one can see it, beyond more basic technologies, even the cusp of cutting edge hi-tech like AI is not an alienated subject while addressing poverty–  and IBM’s move is a witness to this. Companies like Google and Facebook generate billions of dollars as net profit annually. Do you know what it took to establish a company like Facebook? Putting aside technicalities, we can say one computer programmer, one Laptop, and an idea, that’s all!

For a long time, computers in the developing world were primarily restricted to governmental organizations and academia; they are still categorized under luxury items in some African Nations. When it comes to ICT, prior to 1995, only five African countries could connect to the Internet. (Africa Recovery, Web). It was only after the late-2000s, with the explosion of the Internet and commoditization of digital technology, did the global development community begin to see ICTs as a way to achieve development ends.

It is true that in many circumstances the use of ICTs can complicated, and the biggest successes are often concentrated in the service sector. However, the point in need of stress is that ICTs can momentously change the grim situation of poverty. “IT can be of great value in various economic sectors if used for decision-making. But, computers are still largely used for routine data processing in sub-Saharan Africa with very little computer-aided decision-making”. (Odedra, Lawrie, Bennett, & Goodman, n.d.)

What the above paper forgot to mention is the bottleneck of Data Curation in Africa. Indeed it is still a challenge and there is so little clean data available for computer-based decision. Without strong data curation, machine based decisions are bound to be unreliable in the continent. Yet again, the continent is not doing what it is expected to do; digitizing, cleaning, and again sorting the data at hand.

ICTs can be applied on Pro-Poor Growth strategies. Microcredit services through social capital, transparent financial infrastructure, electronic service delivery support structure, along with local agriculture research for highest pro-poor gains will not just strengthen the economy in specific sectors but these will certainly elevate the conditions of people living under extreme or whatever sort of poverty. In today’s reality, Technology is the only tool through which nations can develop a specific processes that lead to economic growth, achievable pro-poor actions, and a sustainable economy marked by a healthy equity distribution.

Without appropriate technology, a mere economic growth may not lead to pro-poor growth. Many commentators believe that there have to be specific pro-poor activities. These interventions are specifically designed to reduce inequalities. How can ICTs contribute to these specific pro-poor actions?

Those that have the potential to enhance pro-poor growth specifically include infrastructure, private sector development (PSD), and rural livelihoods. And in many cases, ICTs tend to be complementary to existing practice within each of these sectors rather than a substitute for them. Yet, in some cases, there is evidence that ICT infrastructure can substitute “traditional infrastructure” (roads, hospitals, schools). In today’s world, one can work all the office work via internet connection while sitting in the remotest area of the world where there had never been roads, buildings, file cabinets and xerox machines. A student can attend the finest school only through their computer screen or a smart teaching tablet. Patients can be consulted and admitted through either their phone or their computer via the internet.

In countries like Ethiopia, building an actual road, and enhancing the public transport is not an easy task. Yet, ICT services can enhance the pro-poor value of these traditional infrastructures; simple example is that they can open up access to market information for farmers through the use of phones which will enable them to select markets more efficiently and conduct remote transactions.

Let us take another example where technology has brought an actual change in grass-root level; the ICT revolution in Kenya. To be more specific, Mobile Money and the Mobile Data Service is a good place to start. For centuries the mainstream has been preaching and then formulating economic policies based on the rational thought that Economic development can succeed if it develops industries that are consistent with its comparative advantage.

In 2007, Kenya’s comparative advantage (between the agriculture and ICT sector) when it comes to capital, labour, resource, skill, market, and scalability slanted undoubtedly towards the Agriculture Sector. Yet, the country has started investing heavily on the ICT sector (more specifically on the Mobile Data service and Mobile Banking) and now Kenyan’s are the leading nation of the globe in the utilization of this unlikely sector.

In that same year, the Department for International Development (DFID), the foreign aid arm of the British government and Vodafone launched a project that provides a platform for banking services via mobile phones (not even smart phones) with a matching fund of only 1 million pound. M-Pesa, the new platform, quickly becomes the second favorite thing next to Chapati in Kenya and now more than 43 percent of Kenya’s GDP flowed through it, no need to add more about its success!

But what about its impact on the pro-poor activities? Well, despite the positive impact of M-Pesa in the creation of thousands and thousands of small business leading to an actual poverty reduction, it is now a platform accessible to ‘the wretches’ of Kenya as well. Yeah, people who live under the $1.25 are using it now; it may sound to good to be true because individuals who live under 1 dollar and 25 miserly cents cannot use banking services, it is not rational but it proved to be irrationally rational! “M-Pesa has been especially successful in reaching low-income Kenyans: new data indicates that the percentage of people living on less than $1.25 a day who use M-Pesa rose from less than 20 percent in 2008 to 72 percent by 2011”. (Suri & Jack, 2012)

This is not the end of the story though; now because of M-Pesa, Africa is in a position to export innovatio – not just to import it. “Now the world’s most successful mobile wallet technology is expanding beyond Africa to Europe, starting with Romania. In what may be a historical first, the move involves the export of a technology from the developing to the developed world, reversing a centuries-old trend”. (Heinrich, 2014)

5) Conclusion

What is technology? Technology is the art and craft, i.e. the smart use of human rationality and the intelligent development of specialised bodily functions, to design and develop skills and techniques and fabricate artefacts. We use these skills, techniques, and artefacts for making and doing things necessary for our survival or useful for our flourishing”. (Lötter, 2007, p. n.a )

This is the missing link in Africa’s development plan. The entire growth and transformation plan doesn’t involve the creation of business capitalised on the smart use of human rationality. What the MDG and other initiatives seem to miss is that to eliminate poverty, all these miserably dilapidated African nations cannot afford the consequences of minimizing the role of technology or even that of hi-tech. What they are pressing now is the rule of the Homo economicus; these nations are poor and they cannot afford the implementation of hi-tech hence this [technology or hi-tech] will not maximize their profit. But this is an erroneous approach in a world where unpredictable change is looming and technology is the absolute dictator to enforce it.

The output of the labour force marks the state of poverty and nations in the third world are marked by a labour output labelled as low-end service value. This kind of production is the result of an economy, which suffers from the implementation of technology. The production and service sector, because it lacks technology, cannot entertain skilled and trained labour; in simple terms, the demand for such labour is low. On the other hand, the labour force engaged in such kind of economies is only rewarded cheaply and this will greatly cripple the pro-poor strategy; the people will never be paid more than 2.50 dollars a day!

If the status quo is not changed and the irrational notion towards Hi-tech and the poor nations is not abandoned, the third world will not see a change. As the saying goes (for the sake of integrity, let’s not state who says this), “Jesus you’re a waitress, you’re not building a rocket”! Hence, Africans and the other third world nations cannot demand a high paying salary. We are farmers, shoe shiners, cashiers… And this image extends even to the minority, the professionals, and they are not paid at all! Yes, even the likes of UN, the organization dedicated to eradicate poverty, is still hiring a white european college dropout to boss a black African expert with a PHD!

The majority of the labour in the third world is low-value service and, from the looks of it this will continue for the coming 800 years. This is also assuming automation will fail to replace this kind of labours yet it is highly unlikely and if these portion of the world’s demography loses its job for the machines while the poverty is still there… chaos! Poverty has cornered the minds of these nation’s people , driving them into in a difficult state, and hence these minds are no good in the fight against poverty. It is time for change; the mentality, which states that Africans cannot afford hi-tech, is wrong because it is the result of a mind that resides in a difficult state.

One last but perfectly good example to demonstrate how to transform low-value service labour into a high-value service labour is India’s accelerating economy. The open secret of India’s success in transforming the economy from Agriculture based to service based is marked by a high-value service labour. The transformation is solely championed by Technology and especially of those related to Computer and ICT services. The country’s economic growth cries aloud a shift largely related to Computer Science and Information and Communication Technology – showing that development of the technology based Service Sector can be a dependable alternative path to sustainable growth.

Hence, it is sensible to say that technological advancement should be the priority of governments especially those governments in charge of poor nations. At a first glance, giving priority to technology in countries like Ethiopia, where the question of food sustainability is still the resonant challenge, might sound ridiculously over-ambitious economic move. Yet, the facts presented in this article or those that can be seen all over the rest of the world’s economic growth on the ground tell a different story.

Growth was accompanied by marked structural change in farming and by rapid technological adoption, largely in mechanical technology, that reduced labour requirements in agriculture. Over the longer-term, technological improvements and productivity gains would need to drive the agricultural growth in East Africa as well”. (Salami A., Kamara, Abdul B., Brixiova, Zuzana, 2010, p. n.a)

This is the time to direct Africa’s towards the right direction; and the next step is to invest on technology. Africa’s growth is more than ready to adapt technology and there is a lot of room for creative moves in this regard.   Adaptation of and to cutting-edge technology has proved itself to be the best and fastest way to beat poverty and radically enhance the living conditions of human beings.


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From the editors of

This Article was originally written for the bi annual magazine (iCog Makers) by Hruy Tsegaye and was published on hard copy in collaboration with the Federal Democratic Republic of Ethiopia’s Ministry of Science and Technology on 5, August, 2017. It is republished here with the permission of the iCog Makers magazine editor and the verbal consent of the Ministry. 

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