Digital Economy, Digital Enterprise

Enter Digital Enterprises in Africa

Digital technologies like Internet applications and mobile phones are changing the nature of work, business and organisations. Their extensive embeddedness in the economic exchange of goods and services is also creating digital economies – a phenomenon with growing importance. The digital economy is “that part of economic output derived solely or primarily from digital technologies with a business model based on digital goods or services”. For the global South in particular, the digital economy even though usually only accounting for 3 percent to 4 percent of gross domestic product (GDP), has a much larger impact when firms use it to spur competition and productivity in traditional sectors, such as retail, banking, and manufacturing. Available statistics suggest that the mobile ecosystem alone contributed US$8.3 billion to the Nigerian economy and 7% of Mali’s GDP consists of its digital industry (da Silva, 2014). Despite these successes, the region is yet to catch up with the bigger benefits the global North enjoys from the digital economy.

Synthesising Available Evidence
To have a deeper understanding of the digital economy in the global South (specifically Africa), available evidence was gathered and synthesised as part of DIODE Network activities. Unfortunately, the synthesis had to rely mostly on practice-based literature due to the scarcity of academic research on the digital economy of Africa. Such a synthesis was also important to uncover areas that need further research. Guided by the narrow definition of the digital economy, the synthesis focused on the activities of enterprises in telecommunications, digital services, software and IT consulting, hardware manufacture, information services, platform economy, gig economy, and sharing economy. Available evidence suggests countries like South Africa, Nigeria, Kenya and Ghana are quite advanced in the digital economy. Their advancement reflects their level of development and abounding availability of digital enterprise activities. Encouragingly, other countries with some investments from established players in the global North, are also making efforts to catch up.

Areas for New Research
Overall, five main themes emerged as areas that need new research efforts. First, there is need to undertake studies that trace value creation amongst various forms of digital enterprises. Second, there is need to study the career trajectories of people who engage in the various aspects of digital enterprises – especially the gig economy; in order to understand the factors determining their involvement. Third, there is need to undertake periodic and regular research to find out the motivations of the companies that want digital presence and mobile apps developed for them, and the development impact of their decisions on those who work on such requests especially if they are gig workers. Fourth, there is need to undertake country and cross-country case studies of the various platform and digital enterprise issues, to generate lessons and best practices for countries that are now picking up. Fifth, one big question that remains unanswered relates to knowing who exactly is benefiting from the digital economy in Africa, therefore it would be interesting to know the true beneficiaries, and also the coping mechanisms of the losers.

In summary, there is a paucity of academic research on digital enterprises in Africa. In order to end this paucity, more research needs to be conducted around this phenomenon in the global South. Such research could begin with the areas derived and discussed in this synthesis study.

Read More in the Synthesis Study here:

Boateng, R., Budu, J., Mbrokoh, A.S. Ansong, E., Boateng, S.L. & Anderson, A.B. (2017). Digital Enterprises in Africa: A Synthesis of Current Evidence, Paper 2. DIODE Network, University of Manchester.

Text Reference

da Silva, I. S. (2014). Mali Digital Plan 2020 to reorganise economy. Retrieved from http://www.biztechafrica.com/article/mali-digital-plan-2020-reorganise-economy/9327/

Picture Reference

Ansip, A. (2017). Heading to Nigeria, EU Commission and Its Priorities, Retrieved 23 November 2017 from https://ec.europa.eu/commission/commissioners/2014-2019/ansip/blog/heading-nigeria_en

Digital Economy, Digital Enterprise, DIODE General

Open data platforms and development in Latin America

There is increasing excitement about the developmental effects that data released in open format could bring to the global south. The so called open data—data released in digital format, publicly available for anyone to use—promise to contribute to key development goals, such as economic growth, job creation, inclusion and access to public services. To illustrate the economic potential, McKinsey estimated in 2013 that the economic value of open data could reach between $1 and $3 trillion per year. Although these figures remain highly speculative, the rationale is that by using or re-using open data, new products and business can be created, innovation can be spurred, and productive processes can be optimised to achieve gains in productivity. That includes governments and public organisations. Open data can help improving the delivery and quality of public services and can contribute to the efficiency of internal operations. Equally important, open data is seen as central means to increase transparency, fight corruption, as well as promote inclusion and civic participation. The latter has been particularly acknowledged in the commitments that governments endorse when joining the global Open Government Partnership.

Open data in Latin America

As a region, Latin America has moved comparatively quickly in embracing open data initiatives. Mexico, Uruguay and Brazil lead the table among the developing world and are amongst the top 18 best performing countries in the 2016 Open Data Barometer, a global ranking led by the World Wide Web Foundation that ranks countries according to the publication and readiness of key government datasets and evidence of its impact. In addition, the region has now five countries within the top 20 of the 2017 Open Data Index—a survey coordinated by the Open Knowledge Foundation that measures the state of open government data around the world.

The commercial, for profit approach of open data has yet to take off in Latin America. More often, what is found in the region is a growing open data ecosystem that is moving forward an agenda of accountability, innovation and participation. The region holds its own Open Data Conference (AbreLatam/ConDatos) annually since 2013. The annual meet up has strengthened regional communities that use open data to offer tangible solutions in areas of public health, government transparency, transportation and urban planning. A self-reported survey gathered in Abrelatam reveals 196 projects from 135 organisations in these areas.

The ecosystem in Latin America means that different actors have contributed to unlock the value of open data in the region. Governments are important ones—they build open data platforms that form the supply side of the data value chain. But the realisation of the value of these platforms lie on the applications and services that are built on top of the data. The city of Buenos Aires, for example, used hackathons and apps competitions to engage developers and start-ups to co-create new services. In Montevideo, the municipality partnered with the civil society organisation DATA to run a platform called Por Mi Barrio, developed based on the UK’s FixMyStreet initiative. Por Mi Barrio helps people to report street problems like broken street lights or potholes and link it to the municipality to fix them. NGOs and local activist are, thus, another crucial actor in the ecosystem. Ciudadano Inteligente in Chile and SocialTIC in Mexico, both promote transparency, inclusion and citizen participation through open data and the use of new informational technologies. Journalists also contribute to open up government data for accountability purposes. Argentine newspaper La Nación and its data division LNData won the Data Journalism Award for their work on opening up unstructured, closed and opaque data from Argentina’s Senate expenses in times of no freedom of information laws and controversies surrounding media access to government information. In Peru, the organization Convoca opened up public data to help users understand the behaviour of extractive industries in Peru and its impact on people’s lives. The project, called Excesos sin Castigo (“Excesses Unpunished”) won the Data Journalism Award in 2016.

Research into open data platforms and their ecosystem

Despite the anecdotal evidence, the mechanisms through which open data can scale and harness developmental goals have not yet been clearly established. My current programme of research examines how open government data fosters innovation and enables economic and social development in Latin America. One of my ongoing projects, jointly with my colleague Ben Eaton, studies empirically how engagement with open government data platforms unfolds in Buenos Aires, Mexico City and Montevideo. In specific terms, we ask how the installed base (the actors in the ecosystem) is mobilised in open data platforms. Drawing from literature on digital platforms, we aim to understand the context, formation, grow and functioning of the installed base, and to offer insights on the ways actors interact to use and generate value from these platforms. The results of this work will be ready in 2018, so watch this space for research insights and policy implications.

Digital Enterprise

A Research Agenda on 3D Printing, FabLabs, Makerspaces, etc in the Global South

We hear a great deal about 3D printing, FabLabs, makerspaces, hackerspaces and the like.  They are emerging digital economy phenomena in the global South.  But what research has been done so far in this domain?  And what should the future research agenda be?

To answer those questions, Ryo Seo-Zindy – a doctoral researcher with Manchester’s Centre for Development Informatics – undertook a systematic literature review, which has been published as: “Researching the Emergence of 3D Printing, Makerspaces, Hackerspaces and FabLabs in the Global South: A Scoping Review and Research Agenda on Digital Innovation and Fabrication Networks” in The Electronic Journal of Information Systems in Developing Countries.

The review identified 70 papers of relevance (of which only a small minority covered the global South).  It found that the literature maps a complex and varied picture of actors, activities, locations, and technologies.  To link these all together, we propose the notion of “digital innovation and fabrication networks” (DIFNs).  We define a DIFN as “a network of people, technologies, enterprises and other organisations, which use digital fabrication tools and other digital technologies to produce and innovate products in an open, community- and workspace-based environment”.

Textual analysis of the 70 papers included creation of the wordcloud below.

DIFN Wordcloud

From this and other analysis, three overarching themes emerge from the literature.

i. Production:
– The idea of peer production as a new and collaborative mode for creation of digital artefacts and tools
– The rise of industrialised but small-scale production, using tools such as 3D printers

ii. Innovation:
– Support for grassroots, localised innovation often in physical workspaces
– Simultaneously, the emergence of new innovation intermediaries and hubs that link out into wider digital innovation ecosystems

iii. Openness:
– A cross-cutting theme within models of production and innovation, with a focus on re-usability, adaptability, and transparency
– But . . . beyond this, a vagueness or multiplicity of meanings around openness

Despite the work already undertaken, the rapid expansion of DIFNs in developing countries creates a growing series of knowledge gaps and, hence, a future research agenda.  The paper discusses these in detail, with an overview of some elements summarised in the table below.

Research Theme Future Research Agenda
Methodology ·      Extend use of conceptually-founded empirical research
·      Expand breadth of coverage to un-researched locations (Africa, Latin America, most of Asia), and expand depth of insight in East/South-East Asia
Production ·      Map the production processes taking place within DIFNs
·      Map the relationships and production models arising between DIFNs and local manufacturing
·      Analyse the tension between collaborative and individualised production within DIFNs
Innovation ·      Investigate how grassroots innovation, focused on local socio-economic problems, can be fostered
·      Examine the learning processes that occur between actors in DIFNs and the wider innovation system
Openness ·      Research the different types of openness seen in DIFNs
·      Analyse the competing worldviews that influence and are negotiated in DIFNs

Parts of this agenda are currently being taken forward with field research on DIFNs in South-East Asia.

Digital Enterprise

How Context Impacts Developing Country Digital Start-Ups

As the digital economy grows in developing countries, is it part of a “weightless economy” that floats free from the local context?  Or is it still heavily embedded within that context?

Recent research from Manchester’s Centre for Development Informatics investigates this. The paper, “Digital Start-Ups in the Global South: Embeddedness, Digitality and Peripherality in Latin America” looks at the experience of digital start-ups in the four largest economies of Latin America: Argentina, Brazil, Colombia and Mexico.  It does so through the lens of the Triple Embeddedness Framework (see below).

Geels TEF

The Triple Embeddedness Framework

Far from being free-floating, these young enterprises are strongly-rooted in local supply chains, social institutions, and policy environments.  But they also experience “hybrid embeddedness”, meaning they lie at the intersection of different domains:

  1. Product/Digital Hybridity. Digital start-ups are shaped by their product sector: the sector of the goods or services they sell – the financial services sector for an online investment start-up; the recruitment sector for a web-based employment exchange. But – unlike traditional enterprises – they are also embedded in an emergent digital sector.  Where their level of embeddedness in each sector is “just right” – what we called “Goldilocks embeddedness” – they can cross-fertilise ideas between the sectors, draw finance and staff from both sectors, and are not so heavily-embedded that their investment in the status quo constrains innovation.
  2. Local/Global Hybridity. Digital start-ups are also hybridly-embedded in both a local and a global industry regime. Local laws and social networks and capabilities are an essential part of these digital enterprises’ operations.  But they also take business models, start-up methodologies, social norms and policy priorities from the global North; primarily from Silicon Valley in the US.  Their position on the relative periphery of the global economy also seems helpful: it allows these ideas and other resources to flow in from the US but offers some relative protection from external competition.

Governments and firms in the global South need to recognise this pattern of embeddedness:

  • Governments must do more to build up local digital sector institutions which act as key intermediaries both within the local digital economy and between local and global digital economies.
  • Digital start-ups must self-analyse the constraints and freedoms imposed by their embeddedness. And they must customise models and methods from the global North; for example, rescoping the Lean Start-Up methodology to take a broader bi-sectoral and socio-political remit.

In research terms, we need to understand more about how the digitality and peripherality of these start-ups affects their development trajectories.  This and other items will form part of the DIODE Network discussions on future research agendas around development implications of digital economies.