If we were to think of Silicon Valley, and our own innovations and start-ups, as countries, we might be able to capitalise on the kind of thinking that makes Silicon Valley so successful, writes Nnamdi Oranye.
California, where Silicon Valley resides, has a bigger economy than most nations of the world. In fact, the World Bank in 2016 rated it as the sixth biggest economy on the globe. That’s one State in all of America. And within this State resides states of their own, if you will – countries, nations that cross borders, generate revenue in almost every border of the world, and connect people across geographic regions in new, unthinkable ways. These are the countries of Silicon Valley, and the big five of them are undoubtedly Facebook, Google, Apple, Uber and Amazon.
If you were to think of Facebook as a country, it would be the most populous on earth, with 1.86 billion people logging onto the network each month. We could think of that as 1.86 billion living, active users – effectively, Facebook’s citizens. That’s more than China’s entire population (about 1.4 billion). It’s more than India’s (about 1.3 billion).
Facebook’s users are more than the U.S. population itself, which comes in at about 0.3 billion, where the company comes from. Facebook’s biggest problem is that there will eventually not be enough people in the world who will actually log on and use it, so how will it grow? It’s still banned in China, but who knows for how much longer?
To get Africans on board and increase its user base, Facebook is, therefore, finding ways to help us all get online. Through a partnership with Eutelsat, it’s looking to offer a connected experience that it calls Free Basics (see internet.org), which already operates in several countries across the globe and has partnered with MTN and other telecommunications in Africa. This has come with some controversy.
Its plan is clearly to get everyone on the planet logged on and connected – and at 1.39 billion users logging on every month, it doesn’t seem as if it is just dreaming. If you consider Facebook’s earnings of USD $8.81 billion (Q4 2016), and you compare this to other country GDP’s, you see it’s richer than many of the countries of the world!
Google isn’t far behind. If it were a country, it would probably be the third biggest in the world. In 2016, it reported that it has now more than one billion active users on Gmail. YouTube, Maps, Google Play, and Chrome also have more than one billion active users. And this doesn’t account for active users on the Google search engine or users of its other products. In the same year, it reported it had reached 3.3 trillion searches in a year.
There are more than 1.6 billion Android devices in the market (2017). Alphabet, the holding company of Google, reported USD $21.33 billion in revenue in 2016; 24.8 billion in the first quarter of 2017. It outstrips even more nations than Facebook if you had to compare GDP with Google’s revenue. In fact, only just over 60 countries in the world beat it – while the rest trail behind.
In 2015, its revenue for the year was better than 33 of the world’s poorest countries combined, meaning – as reported by Investopedia – that its wealth exceeded roughly 18 percent of the global GDP. It’s not the biggest multi-national corporation there is, and that in itself is saying something.
Where does Whatsapp sit in all this? The messaging app boasted 1.2 billion active users a month in January 2017. If you consider that Whatsapp is owned by Facebook, you can begin to see just how much Facebook would dominate if it were a country. And then let’s not forget Instagram with 600 million users at the end of 2016 – which is also owned by Facebook.
These are nations within all of our nations. Realising this stark fact puts things in an interesting perspective. It’s a good thought exercise to think beyond the stats and consider the philosophy behind this, consider what it means to have nations of this size within your own nation, linked to your next-door neighbours and across the world. When you think of these innovations as countries you can see the type of service they provide, and the way they provide their service, is totally different to how we normally do things in an African context. The regulatory framework is different. The approach to technology is different. The way they view themselves, and their citizens, is different. What this means is if we were to
The regulatory framework is different. The approach to technology is different. The way they view themselves, and their citizens, is different. What this means is if we were to try compete with the likes of Uber, for example, we can’t compete in the way we usually do with other countries: with borders and regulation and certain security approaches, and so on. We have to start to think of things like VISA-less borders and we have to come to grips with what our response to that sort of thing is — what our regulatory framework will actually be. This regulatory framework has to be totally new, it can’t just incorporate a ‘business-as-usual’ approach.
The sheer connected nature of these Silicon Valley companies — the way in which they truly want to connect us — speaks volumes into this, and is truly globalism gone next level. Consider Google / Alphabet’s plans. It has been developing its driverless, ‘smart’ car for some time now, and expects to release this to the consumer market by 2020. It’s investing in healthcare. Android phones and Android watches are telling us about how healthy and active we are being. You can see where Google is going with that. And no doubt, through collecting all the information Google does about you, it will (in my opinion) look to start health insurance or other kinds of insurance too. (Amazon, too, just announced this last week that it’s thinking of going into pharmaceuticals, so this is clearly a market Silicon Valley wants to
And no doubt, through collecting all the information Google does about you, it will (in my opinion) look to start health insurance or other kinds of insurance too. (Amazon, too, just announced this last week that it’s thinking of going into pharmaceuticals, so this is clearly a market Silicon Valley wants to cannibalise). Facebook and Google have plans to get the world online via satellite, or Google’s connected blimps in the sky.
Google along with Levi’s just released a jacket in the last few months to the market with ‘gesture-sensing fabric’ which effectively lets you control your phone by just touching your jacket. Google has been making headway into the ‘connected home’ concept with its Nest products, and others. So the plan is simple: make everything connected, from your watch to your phone to your car to your home to your clothes. Google wants to create a new ecosystem. Facebook wants to, too. Amazon, on the other hand, just wants to own everything.
“Ecosystem” is the key for me in how we need to think of our innovations, as I’ve argued elsewhere. But more than this, if we are looking at the economies of these companies and thinking of ourselves as African nations in comparison to them, we must realise that we cannot see technology innovations as ‘start-ups’. We have to think of them as more than that.
We have to think of our own innovations, and innovators, as developing nations and ecosystems within our nations. We have to open our borders to them, so they can think Pan-African from the start. We only tend to think of our innovations as ‘tech’, but we have to think consider them as countries all of their own.
Acha Leke, director at McKinsey and Company and a member of the World Economic Forum (WEF) Global Agenda on Africa, represents, in my opinion, one way we need to be thinking about this. He is actively campaigning for visa-less borders in Africa, for the recently launched African Union passport. He believes this will accelerate socio-economic growth; boosting tourism revenue and increasing intra-African trade.
As he said at Oxford in 2015, “We are the second fastest growing continent in the world, and Africa offers the second highest return of investment of any region in the world.” What this means is that if we can make our borders more open, we can make it so much easier for our innovators to expand across Africa and get even more investment with effectively less hassle, and that will benefit us all. We will create a more integrated market, make it more efficient for business, open up opportunities, which all will promote greater stability and investment.
Silicon Valley does not think within borders. It’s kind of connected thinking that creates a better “working together” and the kind of prosperity these Silicon Valley companies enjoy is what we really need, I believe. You can see the same thinking employed in China’s open-source philosophy that has helped it to innovate so quickly – a philosophy that is highlighted by China’s very different take on patent laws.
If we want to prevent Silicon Valley from not only capitalising on our opportunities but also our current markets, we have to start thinking a bit like them while thinking about our context at the same time. For example, I’ve been saying for some time that Facebook can cannibalise our telecommunications industries. Take a look at the Telecom Infrastructure Project, a consortium led by Facebook and launched at Mobile World Congress last year; and also take a look at its Voyager project; and also just think about the fact that Whatsapp is processing 100 million calls a day. It is poised to sweep the rug under the carpet of every telecoms company in the world, including Africa. The problem is I don’t think we’re ready for it.
We need to be creating a new ecosystem for us as Africans through our own innovations, and working with these Silicon Valley innovations, our way. Along with the tremendous positive the likes of Google and Facebook can bring to help connect us, they can also bring significant negative in the forms of where the revenue generated will all be going, what happens to all the jobs that can be lost, and how it develops our own skills for the future. We have a serious challenge before us and we need to rise up to it now.