Lauri Elliott

This is an article I wrote for Brainstorm Magazine of South Africa. It appeared in the December 2009/January 2010 issue.

The penetration of mobile phones and mobile data will serve as catalysts for a growing mobile gaming market in South Africa. The question is how well the industry will navigate these opportunities.

Globally, gaming is a hot market – from console, to PC, to online, to mobile. Pyramid Research’s recent report, Mobile Gaming in Emerging Markets, says that mobile gaming will grow at least 20 percent per year from 2009 to 2014 in the Africa and Middle East regions.

Jan Ten Sythoff, research manager for Pyramid Research, says that mobile phone and mobile data penetration serve as catalysts for this market. While Africa has good mobile phone penetration, there are differences between consumers in mature markets like the United States and those in emerging markets like Africa.

Says Matt Benic, a developer with I-Imagine: “While we have high mobile phone penetration, our potential consumers in South Africa typically have low levels of disposable income (also typical of the rest of Africa).”

This means handsets used by consumers are lower-end devices, and the cost of games needs to be lower than in developed markets. In addition, consumers would not necessarily have previous experience with other gaming platforms like consoles and PCs. Says Danny Day, owner of QCF Design: “The first provider that offers a truly engaging, massively multi-player, micro-transaction-enabled game on phones is going to win big.”

Benic says there is also huge opportunity with sports, like soccer, and SMS-based games in South Africa. A “taxi”-driving game might be an appealing concept in South Africa too. This is tapping into what consumers know and feel comfortable with.

Sythoff says the challenges facing emerging markets include game cost, affordable handsets and piracy.

Benic mentions that the misperception that game development is inexpensive is a challenge in the local industry. Companies that would pay to have games developed for advertising and promotional purposes are often shocked when quoted a price.

Furthermore, according to Benic, the lack of sufficient numbers of skilled developers is slowing down the mobile game development industry. And then there is the ongoing issue of the cost of internet access. There are many free and inexpensive tools online to support mobile game development but the data usage expense can be prohibitive for small firms.

Challenges impact the consumer too, says Day. “Poor visibility, commodity-focused instead of product-focused marketing, shoddy after-sales support and lack of penetration by local mobile developers means…potential players have to wade through sheets and sheets of poorly advertised games.” In addition, the games are not localised to suit consumers.

Challenges notwithstanding, Sythoff shares several business models with the potential to succeed in African markets. First, there is gaming for advertising, or adver-gaming: players are allowed to download games for free, but the games contain advertisements. The vendor and developer generate revenue by selling advertising space.

A second potential business model allows consumers to play games for free until they reach a certain level, after which they must pay. This is a good way of getting consumers hooked on a game, providing motivation for them to pay to continue.

In some instances, a game developer will work with a data provider to provide games. Both share the revenues while keeping the price of games lower. Day says QCF Design is looking into another business model – subscriptions.

No matter which business model is employed though, says Benic, a game has to make it the first month it is released.

Sythoff says there are potential spinoffs in digital content and educational games, while Day says his firm “has had some success with mobile-based learning games”.

Sythoff points out that new mobile game developers need to address several issues. First, they have to find channels to reach potential consumers. This will normally result in partnerships with mobile phone operators or aggregators. Second, developers need to consider how they will bill the end-user.

Third, games should be localised to match language and culture.

Unlike the iPhone Appstore, which shook the US mobile game industry by allowing new and more agile mobile developers to enter the market, local developers find it difficult to enter the market. Day says “commissioned game development is currently more lucrative”.

Up, up and away

As for the future, Day provides several insights. “New studios are applying lessons learned from digital distribution games on consoles and PCs to the mobile space. These are studios and products that will change the mobile gaming sector in South Africa.”

Also, says Day: “Watch content creators that produce content for local consumers, as well as the Indian mobile game development industry… (it) will inform developers here.”

Finally, Day says to track MXIT.

“MXIT is a heavyweight in the industry. It’s one to watch for future growth in the mobile game sector, especially if it acts as an aggregator for quality local content.”

The sector will also be tamed. “New gambling control laws and changes to premium cost services should help reign in the `Wild West’ nature of many mobile businesses,” according to Day. This will reduce exploitation of consumers.

Overall, two possible scenarios will develop in South Africa’s mobile game sector. Mobile games will be overtaken by flash- or browser-based games as phones evolve, if the mobile game industry does not respond on time. Or, the industry will shift from its current business models to more customer-focused models, which focus on alternative revenue streams.

Sythoff says the mobile game sector is complex. Navigating this complexity successfully is a key enabler for firms wanting to enter this space. Success will come to firms like Apple, which are able to deconstruct the complexity and tap into the potential of the sector. With the potential revenue stream and under-tapped market, it’s definitely a sector to consider.

This is an article written by Hilton Tarrant and myself as part of the ICT in business sector series for Brainstorm Magazine in South Africa.

There is no question that the healthcare sector in Africa represents a huge challenge and opportunity. The question is how, and how well, ICT will meet the challenge.

Most African countries have a critical shortage of healthcare workers, and the majority of African healthcare systems are low-ranked internationally, according to the World Health Organisation.

Dr Dirk Koekies, Chief Executive Officer of GeoAxon, states plainly that the challenge is “creating a healthcare system out of nothing, which can deliver quality basic primary healthcare services to those without it”.

While this situation is a critical challenge, it presents a tremendous opportunity for ICT in the health sector. The opportunity is particularly good in the mobile sector (mHealth) due to the penetration of mobile phones on the continent.

The United Nations 2009 report mHealth for Development says: “Mobile phones reach further into developing countries than other technology and health infrastructures.”

One mantra for mHealth is “make available the right information at the right place at the right time and in the correct form,” according to a 2008 Rockefeller Foundation report.

This mantra, when actualised, translates to several benefits, according to Tyson Greer, CEO of Ambient Insights.

First, clinicians and patients can make more informed and intelligent decisions. Second, real-time data is provided for communication, consultation and notification. Third, mHealth increases efficiency and speed of care, and increases productivity of healthcare workers. And finally, it provides on-demand access to information and continual learning for healthcare professionals.

There is a unique opportunity to provide ICT-based products and services to the private healthcare sector.

Firstly, because private sector healthcare already represents a good portion of services provided to Africans compared to public healthcare. And secondly, African governments are using private healthcare providers to augment and enhance public healthcare systems, which are overtaxed.

This creates a sizable opportunity for ICT firms. Specific business opportunities in mHealth, according to the mHealth in Development report, include education and awareness, remote data collection, remote monitoring, communication and training for health care workers, disease and epidemic outbreak tracking, and diagnostic and treatment support. Koekies also says that developing centralised, electronic medical information records is a low-hanging fruit opportunity.

GeoAxon is delving into business opportunities presented in diagnostic and treatment support. Its “Tele-medicine Doctor in a Box” allows a doctor to examine a patient over the internet, using devices the patient interacts with locally. These devices transmit data, which would normally be assessed in a face-to-face consultation with a doctor, remotely to the physician.

While mHealth seems to be gaining momentum, it still has several challenges. mHealth is still in the pioneer stage with many projects in pilot, but little empirical evidence to prove its impact. Koekies indicates that funding for innovative solutions is still difficult to come by. And while the technology may be there, the ecosystem for the mHealth sector is still immature.

Recognising that eHealth*, and mHealth, are still emerging markets in Africa with high potential, ICT firms might want to first look for low-hanging fruit opportunities and those that leverage its strengths.

Big opportunity

The healthcare market is huge. A recent report by research and consulting outfit Markets and Markets says the healthcare IT systems market will be worth $53.8 billion in five years’ time.

One of the major areas of growth in the space is tele-medicine. This is by no means new technology, with policies put in place and applications created over a decade ago.

A new push, by networking giant Cisco, is through a pilot programme demonstrating that tele-medicine is real and it works. The so-called HealthPresence programme saw remote clinics linked up in Aberdeen, Scotland and San Jose, California.

This service provides what Cisco terms “care at-a-distance over the network”. It uses Cisco’s TelePresence teleconferencing technology, with patients and physicians able to see life-sized images of one another. The system also collects physiological data from a variety of linked devices such as a stethoscope, blood pressure cuff, pulse oximeter and other diagnostic equipment.

The Aberdeen trial started in January last year and found that 90 percent of the patients who used the technology were satisfied with the experience, 95 percent said the visit felt confidential and 93 percent said they would recommend it.

“In almost every case, we could accurately identify the degree of urgency and make a diagnosis,” said Dr James Ferguson, national clinical lead for the Scottish Centre for Telehealth.

He added: “Cisco Health- Presence can enable us to deal safely and effectively with 90 percent of the cases we see.”

The Medical Research Council is currently running five separate tele-medicine projects around the country.

Obviously bandwidth constraints mean that the implementation of tele-medicine is difficult in both South Africa and Africa. In addition to bandwidth, the MRC identifies other obstacles such as the lack of easy-to-use, robust diagnostic instruments and no dedicated tele-medicine centre to act as a hub for tele-medicine.

The deployment of terrestrial fibre networks in South and East Africa, as well as the commissioning of Seacom, has helped solve the bandwidth problem, however.

At a recent exhibition, Seacom showcased healthcare teleconferencing applications, and earlier this year at GovTech 2009, Moses

Mtimunye, then acting CEO of Sita, said that in the near future, similar technologies to Cisco’s TelePresence “will make for commercially available tele-medicine projects providing people in rural areas with world-class healthcare services”.

The national Department of Health says its long-term goal is to “make tele-medicine live up to its potential as a valuable tool to improve access to high-quality and cost-effective health care services in South Africa”.

Beyond structured implementation of tele-medicine systems, Cisco believes that HealthPresence could mean a revolution: “Instead of making a dash to an urgent care facility or emergency room, what if you could use your television or other networked device to connect with a medical centre?”

Cisco believes this is not fantasy, it reckons it could become reality within the next three to five years.

*eHealth is the use of ICT for health services and information.

This piece was commissioned by ITWeb/Brainstorm of South Africa for August 2009.  It expresses another strategic view of competitiveness, which places Africa, or anyone, as a competitive leader when fighting in their own unique space.  It’s about creating more value through innovation in your unique competitive space.  It reflects the paradigm of the Vision Society in which everyone, including organizations, is designed for a purpose and has a unique space on this earth.  Let it influence your mindset about approaching your own competitive space.

Is Africa ready to compete globally? If you read the Africa Competitiveness Report 2009 by the World Economic Forum, you get the sense that it isn’t. Although progress is being made, we still hear about the need to address the same issues around infrastructure, health, education, etc.

Malik Fal, MD of Endeavor South Africa, says these are “tangible issues but not the real issue”. And competitiveness is more about creating ‘unique’ value than productivity.

The Africa Competitiveness Report suggests that nations compete and evolve along a continuum, moving from basic factors to efficiency to innovation. Dr Paul Romer, Senior Fellow at Stanford Institute for Economic Policy Research, says: “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable.”

In the end, it is innovation-driven economies that are best able to raise and sustain the living standards of their people.

Says Fal: “Africa’s mistake has been competing on basic factors like natural resources and cheap labour, which promotes poverty instead of prosperity.”

He strongly believes that if African nations, industries and firms compete on their assets in innovative ways, they can compete head to head globally, and regionally. In the book he co-authored, In the River They Swim: Essays from Around the World on Enterprise Solutions to Poverty, there are several examples of industries across the globe – Cuban

Cigars, Rwandan Coffee, Afghan Dried Fruit and Nuts – providing unique value while operating amid political, social and economic upheavals.

Fal states that economies prosper if the focus is on a pragmatic, strategic approach to create more value on the assets inherent in industries and firms. With the Rwandan Coffee industry, the government augmented and filled gaps to help the industry deliver more value by building roads to and from plantations, as well as improving airport infrastructure. One lesson is that focusing on innovation to deliver more value increases economic growth and can simultaneously deal with the tangible issues, if approached correctly.

There is no better example for the ICT sector in Africa than the mobile industry in Africa. Think how it not only opened economic opportunities to the operators but to an entire ecosystem. At the same time, mobile infrastructure development has incrementally pushed overall infrastructure development, according to Ethan Zuckerman, founder of Geekcorps.

At the World Economic Forum on Africa in June 2009, the African mobile market was recognised as one of the fastest growing in the world. The future isn’t written yet, but already there is diversification in mobile applications, e.g. mobile payment systems, agriculture, health, reporting. The social benefits of mobile phones are being experienced by communities that were formerly disconnected.

This is also translating into a larger market for the ICT sector. The benefit is not only to African firms, but also to global firms that are able to gather more real-time data in developing markets because of the proliferation of mobile phones.

Delivering on unique value also results in sustainability. Even during the economic downturn, the ICT sector in Africa continues to grow. Some, like computer manufacturers, have had to change how that value is delivered.

For example, instead of focusing on the laptop market, many firms have grabbed a hold on the netbook market, which is the fastest growing computer equipment segment globally .

Ory Okolloh, executive director of Ushahidi, emphasises that Africans should be creators of the technology for this mobile revolution, not just its consumers. Fortunately, there exists an ecosystem of diverse stakeholders based on innovation and collaboration that supports this idea.

This ecosystem reflects a strong, intangible asset of the African business culture – the social fabric of community interwoven in all aspects of society. How to leverage this asset to increase a firm’s unique value still poses a challenge for many, though. Verna Allee, president of ValueNetworks.com and author of the Future of Knowledge, stresses the increasing importance of leveraging the social dimension in the business context to be more competitive. She adds that, “Intangible assets account for 50 to 70 percent of a business’ (economic) value.”

Both Allee and Fal agree that company and industry competitiveness starts with knowing the full value, tangible and intangible, a company brings. Then, developing the space to deliver and leverage that value. The African mobile industry has demonstrated its unique value in many ways. Business models like pre-paid services, started in Africa, are gaining ground in the United States. The key for the African ICT sector to increase its leadership competitively is to continue in the same vein – concentrating on unique value.

In a bid to help companies realise their full value, Allee developed the value network methodology, which helps to map and leverage both the tangible and intangible assets of organisations.

According to Allee, a value network “is any web of relationships that generates tangible and intangible value through complex dynamic exchanges between two or more individuals, groups, or organisations. Any organisation or group of organisations engaged in both tangible and intangible exchanges can be viewed as a value network, whether private industry, government or public sector.”

A value network is structured by the roles people play. Figure 1 (above) illustrates the rich set of value exchanges within the value network of a technology firm.

In the end, African ICT firms will gain competitiveness due to innovation. While basic factors and efficiency augment innovation, innovation finds ways to trump them on the competitive field. In other words, African companies will remain economically viable and competitive if they are able to deliver on their unique value amid the turbulence of the business environment.

Original publication

Originally posted at www.afribiz.info.

The one-two punch of mobile phones and high-speed bandwidth on the African continent is fueling a boom in the ICT sector.  The  “Information and Communications for Development 2009” report by the World Bank says that voice communications offered through mobile telephony has lead the way for people in developing countries to realize the potential of ICT for economic and social development, and that broadband expansion is “catalytic” in the development of trade and e-government.  Expect the ICT sector to drive how you do business with Africa and open immense opportunities for doing business in Africa over the next five to ten years. 

Availability of high-speed broadband in Africa will increase over 200% in the next few years.  The first of the undersea fiber cable projects, SEACOM, provides high-speed international broadband to East and Southern  Africa .  This is not only important for the Internet market but also for the mobile phone market as consumer experience converges to the mobile platform.  In addition, the African mobile market remains one of the fastest growing markets worldwide.

Another interesting trend in the ICT sector is the rise of East Africa.  South Africa has been the clear leader in ICT sector development in Africa, but the Eastern African Community (EAC), including Rwanda, Burundi, Tanzania, Kenya and Uganda, has prepared itself to serve as a competitive ICT hub to South Africa and other global regions.  The SEACOM project removes one of the few remaining obstacles to this vision.

Many of the trends in the ICT sector are causing the African consumer markets, which were traditionally considered too small and too disconnected for many firms, to become connected and consolidated.  For the first time, African consumer markets are able to tap into real-time data and firms outside the continent receive real-time data from Africa.  For example, local farmers are able to check market data for their produce, empowering them during business deals.

As a business person or investor, the opportunities in the ICT sector are not only in the wave of infrastructure development projects, but also the products and services that can be provided over these “virtual” trade routes.  To give yourself a glimpse into some opportunities in the ICT sector in Africa, review the:

• “SA ICT Rocks!” article
• “Kenya is Calling” article
• “Moving Ahead with Education” article
• “ICT Business Opportunities in the African Consumer Markets” radio broadcast.

 You can also check out brief profiles for the ICT markets in each African country this month by subscribing to our daily BizBits twitter feed.

As we have seen the world economic, financial, capital and money systems implode over the last year and as it continues to disintegrate (however, much money keeps being pumped into them), I have been pondering what does the “new” or different economic system look like in God’s eyes.  God has given me different revelations, but I want to share one in particular now.  The original purpose for money has been perverted.  Money is thought of in ways and used in ways outside its original purpose.  Therefore, it becomes a tool for oppression and destruction.

 What is Money?

 Practically speaking, money is a “…a medium of exchange, a measure of value, or a means for payment.” (www.m-w.com)  Our world uses money to represent wealth and as key to creating wealth and prosperity, but is money used today for its original purpose?  We can understand if something is working outside of its purpose for which it was designed, it can be misused and lead to problems.  God says the root of all evil is the love of money, or unrighteous mammon.

 God Promises Wealth not Money

First, God does not promise us money, He promises us wealth.  Deuteronomy 8:18 says “But you shall [earnestly] remember the Lord your God, for it is He Who gives you power to get wealth, that He may establish His covenant which He swore to your fathers, as it is this day.” (AMP)  The Hebrew word for “wealth” in this passage is “chayil.”  Chayil means force as in an army.  It is noted that this “force” can come in many forms, e.g., strength, power, riches, means, resources.

Force as defined in a modern dictionary means strength or energy, as well as a cause of motion or change. (www.m-w.com) It would seem to me that the wealth we have the power to receive, in whatever form God chooses, is used to make a difference.  Not something hoarded or stored.  This would align with the Abrahamic covenant of being blessed to be a blessing.

 Second, through God’s wisdom, we inherit this wealth.  Proverbs 8:20-21 (AMP) says:

    ²⁰ I [Wisdom] walk in the way of righteousness (moral and spiritual rectitude in every area and relation), in the midst of the paths of justice,

    ²¹That I may cause those who love me to inherit [true] riches and that I may fill their treasuries. (AMP)

The requirement is that we love God’s Wisdom, which is one in the same with Him.  So, if we love God’s Wisdom, we love Him.  This translates to continual fellowship with Him – a personal, intimate relationship.  When we remain “connected” to Jesus as He says in John 15, we can ask what we will and it will be given to us.  So, we will receive wisdom, if we ask as it also states in James 1.

So, if wealth is what we are promised why do we pray for money?  Even in our churches, we frequently ask God for money.  Our environment and culture has conditioned us to do this as a matter of habit not spiritual insight.  It’s not that God will not give money when it is called for.  However, we should focus our prayers on wealth not money unless led for a specific reason to pray for money in these days.  If we take on this mind set and act on it, I believe we will see what Paul speaks of in 2 Corinthians 9:8-11 (AMP):

      ⁸And God is able to make all grace (every favor and earthly blessing) come to you in abundance, so that you may always and under all circumstances and whatever the need be self-sufficient [possessing enough to require no aid or support and furnished in abundance for every good work and charitable donation].

    ⁹As it is written, He [the benevolent person] scatters abroad; He gives to the poor; His deeds of justice and goodness and kindness and benevolence will go on and endure forever!

    ¹⁰And [God] Who provides seed for the sower and bread for eating will also provide and multiply your [resources for] sowing and increase the fruits of your righteousness [which manifests itself in active goodness, kindness, and charity].

    ¹¹Thus you will be enriched in all things and in every way, so that you can be generous, and [your generosity as it is] administered by us will bring forth thanksgiving to God.

Problems with World’s Money System – Another Reason to Pray for Wealth not Money

Speaking practically, there is something wrong with our world’s economic, financial, capital and money systems.  We can see how they are imploding with no sign of slow down at the moment.  I believe God is allowing this to happen because they are not aligned with God’s system of freedom for people.  They, in fact, oppress the majority of the people and nations worldwide and place them in bondage.

Part of the problem is how the current world system perverts the purpose of money, remembering that money is a medium of exchange (currency).  Lawrence Reed of the Foundation for Economic Education (FEE) says:

The “money is wealth” error is the affliction of the currency crank. From John Law to John Maynard Keynes, great populations have hyperinflated themselves to ruin in pursuit of this illusion. Even today we hear cries of “we need more money” as the government’s monetary authorities crank it out at double digit rates.

The good economist will recognize that money creation is no short-cut to wealth. Only the production of valued goods and services in a market which reflects the consumer’s wishes can relieve poverty and promote prosperity.

You can read a full article on the subject here.

As eluded to before, an object’s form is to follow its function.  If the understanding of the function of an object is not correct, it stands to reason that the design, or form, will also be off.  We can see endless patterns of this at an accelerating pace in the world economic system, particularly in the last 40 years or so. I cannot explain the complexities of all of this, but I would like to share a few things concerning the money system to illustrate my point.

Up until the 1970s, the world’s money system operated on the gold standard, meaning when paper money or financial instruments were exchanged, they were backed with actual amounts of gold reserve.  In essence, there was an absolute measure for what something was worth in terms of gold.

Unfortunately, the world moved from the gold standard to floating currency, meaning that capital markets (supply/demand) for our money would determine the value of our currency.  The United States Dollar replaced the gold standard as the prime standard at the time, however, now there is a basket of currency, including the Euro.  So, one day the U.S. Dollar might be worth .75 cents for every Euro or $1.25, depending on the global environment.  This means the value of the money we use for exchange varies from day to day.  This does not represent a system in balance.  God wants an honest scale.  In fact, He says that unjust weights are an abomination to Him.  (Proverbs 11:1)

We don’t think about it, but this is an oppressive system of bondage, in particular for those who have limited or just sufficient means.  For example, if a developing country gets a loan from the World Bank in foreign currency (typically the U.S. Dollar, instead of its local currency) and the foreign currency strengthens against the country’s currency during the period of the loan, the country will be put further into debt.  For example, if South Africa gets a loan in U.S. Dollars at the time the exchange rate between the Rand and U.S. Dollar is 7 to 1 but then the Dollar strengthens and the exchange goes to 10 Rands to 1 U.S. Dollar, South Africa owes more money than the amount of the loan because it is converting Rands to Dollars to make payments.  This creates an oppressive environment for weaker economies and currency when placed against stronger economies and currencies.

Foundations for a New Economic and Monetary System

We can no longer spend time on reflecting what went wrong other than to make sure we do not make the same mistakes going forward. Our full energy should be directed in developing a new economic system that benefits all.  I have a few suggestions to start a dialogue.

First, I think the economic system should be framed from a human ecological perspective.  Simply, people are the foci.  The system and institutions should be built to support and benefit the people.

Second, I think the economic system should be designed on the principle of a commonwealth, meaning that all people benefit from it.  This includes economic equity.  This means all people have the opportunity to tap into various economic opportunities in the system.  It is designed with openness in mind.

Third, as discussed here, we need to think of how to generate wealth not money.  However, we need to define money correctly and use it correctly.  John Tomlinson wrote a book called “Honest Money,” which you can download for free from here.  It will help you think about what money’s place might be in the new economy.

Fourth, we need to expand, or adapt, our understanding of currency.  Remember, currency is a medium of exchange.  Money is a form of currency, not the only one.  Many propose that there are alternative forms of currency like influence and intelligence (information). One alternative economy idea is peer-to-peer (P2P) economies.  In this economy, influence is a primary currency it seems.  Check out the news report on this concept.

I hope that you join the dialogue on this topic.