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Columnists

Emerging innovations can’t be wished away

Taxi drivers in Nairobi are on the warpath. They want to stop Uber, a new taxi service that uses technology to locate the client, which they see threatening their business. Similar incidents are happening in other African cities.

In one of my columns titled, ‘‘Embrace innovation instead of fighting it’’, I had seen this coming. I bet you it will get ugly even in other sectors where new innovations are causing havoc.

When I picked up two friends at the airport recently, they told me to drop them at an apartment block near Yaya Centre.

They had made reservations through an application (app) called Airbnb, which locates individuals with an extra room in their house and rents it to a visitor at rates way below what the hotels charge.

My friends were paying $30 (Sh3,000) a night for bed only. For a budget traveller, this is a great deal. It enables them cover more activities during their visit than when they stay in a hotel.

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Innovations such as Airbnb will put many travel agents out of business, but the same app will create new jobs and redistribute incomes. It is what Austrian economist Joseph Schumpeter referred to as ‘‘creative destruction.’’

In other words, a good entrepreneur disrupts existing enterprises by coming up with a new way of doing the same business.

The process of change also alters the power dynamics by shifting advantage to the newcomer. The best strategy for the displaced is to join the newcomer and begin to fight from within.

Taxi drivers are therefore engaging in an exercise that will take them nowhere.

Their traditional mode of waiting for a customer at one spot is not helping the customer compared to the efficiencies of a taxi coming to you at an extremely lower cost.

Also, safety and traceability are enhanced with technology. This means that both passengers and drivers will experience better security, as anonymity will be eliminated.

Taxis will eventually be busier and make more money. Their businesses will benefit even more as competition to Uber sets in.

In Nairobi, we have Easy Taxi and Mara Moja providing the much needed competition. The disruption will eventually benefit the owners of the vehicles.

M-Pesa, for example, disrupted banks and postal services and forced everybody to sit down with them and work on their terms. In Kenya, new disruptive apps are coming up and they will change the banking narrative once more.

Just last week I sat with Dennis Makori of Onfon to play with their new app, digital Savings and Credit Co-operative (Sacco) that is likely to disrupt the way current Saccos operate.

They leverage on the power of mobile gadgets and require no office. In the short period they have operated, they have more than 5,000 members with contributions exceeding Sh6 million. This will perhaps be the fastest growing Sacco.

A study from a World Bank research and authored by Oxford University’s Martin School and Citibank established that 85 per cent of jobs in Ethiopia are at risk of being automated from a pure technological viewpoint, the highest proportion of any country globally.

Several other African countries, including South Africa, Nigeria and Kenya, may suffer the same fate.

Technology will continue to hound us not just in the service sector, but in key areas like agriculture that employs more than 70 per cent of the population in most countries.

Although trends and big data analytics can tell much of what will be happening in the future, not many Africans entertain futurist discourse which in my view is very important to grasp given the havoc that technology will create in its path.

These new happenings are coming when Africa is beginning to heal from the effects of globalisation that to a large extent made Africa uncompetitive.

We live in such a turbulent time in the history of human kind that we must constantly update our knowledge lest we be shoved into oblivion.

Indeed Africa is vulnerable to technological shocks and that perhaps explains why taxi drivers went physical to fight a rather faceless Uber.

To overcome these challenges, we must prepare to re-skill as many young people as possible while at the same time consciously preparing those who have been displaced by technology to take up new opportunities.

And more importantly encourage homegrown research and development.

Albert Einstein said, ‘‘It has become appallingly obvious that our technology has exceeded our humanity.’’

The writer is an associate professor at University of Nairobi’s Business School.

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