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How business models are set to change

Fourth Industrial Revolution
Existing business models will die as the Fourth Industrial Revolution begins to take shape. FILE PHOTO | NMG 

Without a doubt, many of the existing business models will die as the Fourth Industrial Revolution begins to take shape.

A World Economic Forum (WEF) report, ‘‘Is your business model fit for the Fourth Industrial Revolution’’, says, that the "most successful business model today – in terms of customer value, revenue growth rates and market valuation – is the digital platform business model."

Further, the report says 70 percent of the world's top 10 most valuable companies (Amazon, Apple, Alibaba, Microsoft, et al) and 70 percent of the $1 billion and more "Unicorn" startups (Didi, Airbnb, et al) operate this model, yet fewer than two percent of other companies do. Some of these companies are building their own infrastructure across the world to intensify their domination. Others are amassing data from every citizen of the world to gain competitive advantage.

Some of these companies know about us more than even our closest relatives do. They can use the data to create all manner of scores to easily determine your behaviour patterns, what you want, when you want it and how you want it.

This is good and bad news at the same time. Good because of all the conveniences and improved productivity that comes with digitalisation. Bad because these companies could eliminate competition and create massive monopolies. Yet other companies may undermine our civil liberties.

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We are staring at a future where someone from far away could easily begin to influence local culture and own the politics. Developing countries are at a higher risk to accept free offers like building costly infrastructure without analysing the long-term impact of such offers.

Facebook, which has been accused of all manner of interferences in several countries, has its eyes trained on Africa. They are building a high-speed broadband cable around the continent. Their entry into Africa's broadband infrastructure is bad news. Our fibre optic cables have a few more before they are replaced.

It means that if Africa does not keep up the pace on reinvestments in broadband, monopolistic digital platforms will step in and control not just the infrastructure but also influence the continent's entire future. If we are not careful, we are setting ourselves for recolonisation.

In my view, it is possible to predict intentions of these digital platforms that have enormous power even in their own countries. Just last week, Facebook CEO Mark Zuckerberg was put on spot for allowing President Trump's inciting and inaccurate statements on the platform, which undermine the company's original ideals.

He did not bother to respond even to dozens of former employees who worked at the company during formative stages, including some who helped develop the company's original community guidelines. He, however, maintains that the company should not become the "arbiter of truth."

In the spirit of self-sufficiency, there is need to build and support local digital platforms. Analyze the needs of the people and address them. Facebook is the world's largest media company, although it creates no content. Its revenue, however, is not shared to content providers. What multinational organisations see in Africa is a young and vibrant population that is actively participating in the global discourse. The media in Africa is not addressing the needs of these youth by giving them space to express themselves, debate ideas, vent their frustrations and shape their future.

Although some could be ruing loss of control, advanced technology (Artificial Intelligence) today can detect false information. Twitter has effectively used it. Local media therefore could easily generate excitement around local content by breaking it into bite sizes for public comments in every article that is published.

We would have better development and transparency outcomes in an enabled freedom of speech. Instead we are facilitating multinationals to benefit from new business models by simply surrendering local content to their platforms where debate happens. Examples include: Kenyans on Twitter (KOT), crowdfunding on WhatsApp and other social media discourses.

It is what we do locally to generate interest that will precipitate investment in local and regional infrastructure that facilitates new business models.

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