Op-Ed: Who is Monitoring the Economic Impact of Silicon Valley in Africa?

PUBLISHED: Tue, 18 Sep 2018 17:24:09 GMT

Picture by Coolcaesar – Own work, CC BY-SA 3.0 – Wikimedia Commons

Does anyone know if Silicon Valley costs us more than it gains us?

By Nnamdi Oranye

Does having Silicon Valley-based companies, like Uber or Amazon or Google, functioning and conducting business in our country cost us? Does anyone know? Or are we just guessing and assuming that the jobs created satisfactorily offset whatever it might cost?

Think about it. When you use an Uber your credit card is deducted instantly after your ride, and that money goes straight to the bank account of a Silicon Valley company far, far away from our borders. The driver gets paid out his percentage, fair enough, and that money goes into their account (I wonder how many charges the banks put on that process) but the bulk of it remains in Silicon Valley, does it not?

Or what happens when you buy an app from Google for your phone? Or from Apple? Or you buy a book on Amazon? How much of that money enriches our economies? Or is all this ultimately making us a mere conduit to enrich Silicon Valley?

Has anyone done a proper cost analysis?

I don’t think anyone really has done a proper and thoughtful cost analysis – at least not over the long term. I’m sure our governments are certainly thinking about these things, but I also get the general sense that we’re not having the right conversations with the right people at the right time. We’re certainly, as the public, not getting a sense of how this is all working.

How much money is actually leaving our African countries through these innovations – and through the continent as a whole – and ending up in Uber’s and Amazon’s and Facebook’s bank accounts, never to make its way back here? And can we compare that against the jobs created and the families empowered and come to the conclusion that it’s a good thing?

I’m not saying it isn’t a good thing. I’ve used Uber many times, and the discussions I’ve had with practically every Uber driver has been a positive one. They were retrenched but can now be their own boss. They are earning well and can work their own hours. Some never had work at all until now.

While I know there are many arguments around how drivers feel manipulated or used by Uber, and of course there are the dangers of violence, there are an equal amount of stories saying it’s been a good thing for them. Innovations that disrupt will always come with a mass of differing opinions, and it’s only over time that the truth will emerge. Uber, by way of an example, is in big trouble right now, and it’s “move fast and break things” attitude reflecting Silicon Valley is one that we all need to deal with.

Excited to see African-based competition in the market

So I’m neither for nor against Uber itself, although I think as an innovation it has done brilliantly and I am excited to see the African-based competition that is rising in that market. The taxi industry has needed a disruptor to get it to also deal with its own issues – some of which are still not being dealt with.

Perhaps it’s easier to see how the likes of Uber creates jobs. But what about Facebook? What about Google? How are they creating work for the previously unemployed?

We need to have this conversation about whether it costs us to have Silicon Valley functioning on our continent here, or whether it benefits us. And this conversation must be a Pan-African one. The question is whether the number of jobs being created on the continent; the amount of revenue being invested; and what profitability looks like for them and for us, is mutually beneficial.

We would need to look at the long-term and the long tail. An Uber driver might now have work that he might not have had before, which makes him now able to put his kids through school and educate them and build a life for his family. That’s all a good thing.

Weigh that against the revenue leaving the continent

And is that long-term change something that makes us be happy with the amount of revenue leaving our continent? Or could we have done that in other ways? And is this all sustainable in the long term? Decisions for people here are being made by a bunch of executives in California. Is that a good idea or not? Is Uber simply using our tax money and our roads to run its business practically cost-free? At what point are they contributing in other ways?

Of course, one might accuse me of siding with the likes of Multichoice or Vodacom and MTN, who have both publicly complained about how these overseas innovations are taking advantage of their infrastructure but not paying a cent for it. Multichoice feels misled by the like of Netflix (but surely they saw it coming?) and MTN and Vodacom feel that Whatsapp is getting a free ride.

There is some sense in their arguments, but not complete sense. They have actually each had a long time to see these days coming and they could have developed their own products long before Silicon Valley came here. That’s for another discussion. But all I’m saying here is that we need to have a good, long, even public discussion with Silicon Valley about this – much like America is having with the big boys now.

Silicon Valley companies think Pan-African

It’s not good enough to just have a per-country strategy, because clearly, Silicon Valley companies don’t see it that way. They think Pan-African, and so should we. And the conversation needs to include central banks and regulatory bodies, politicians and even our own innovators. Because, ultimately, I still believe that Africans need to have space and support to create African innovations for Africa’s people. They need to be involved in how innovations are implemented or localised on our continent. They need to benefit as well and be a part of the process.

If Silicon Valley is good for us, then great; but if it isn’t… well, we better know that now before it’s too late. Because this can just be another colonialism in disguise if we’re not careful.

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