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Will digitalisation be a key economic driver in Africa?

July 7, 2016 • East Africa, Enterprise IT, North Africa, Southern Africa, Top Stories, West Africa

digitalisation in Africa

Siemens South Africa CEO, Sabine Dall’Omo. (Image Source: Agency).

Digitalisation is considered to be key an economic driver and one that will allow countries within Africa as well as around the world to grow GDP, create employment and reduce spending. This is according to South Africa CEO for Siemens, Sabine Dall’Omo, who spoke at the inaugural IoT Africa Summit – which was held in Sandton, Johannesburg.

According to Dall’Omo, more can be done by both business and government across Africa to grasp opportunities and take advantage of such technologies.

“The Internet of Things is easy to identify when you think of business to consumer. We have moved from record stores to live-streaming and from taxis to ride sharing. Disruption can, and does, have a positive impact on critical sectors in business markets yet more must be done to embrace this new era, this 4th Industrial Revolution,” said Dall’Omo.

The business of digitalisation at Siemens will see market growth by mid-2020 of between 7 and 9 percent, she added. Businesses will use intelligence to manage physical engineering systems like turbines, trains, and energy grids allowing for improved efficiency and productivity. Such efficiencies not only increase employee productivity, but also generate greater customer satisfaction and loyalty as well as create revenue streams which did not exist 15 years ago.

This growth is being driven by a number of megatrends. The growing and ageing world population, global warming and weather extremities, globalisation, specifically investment abroad, and greater urbanisation. At the heart of these trends is digital transformation and the exponential growth of connected devices.

Africa will be home to a consumer population of 900 million new urban dwellers over the next 35 years, all demanding goods and services to be delivered through digital. To meet such demand, business and government have to keep up.

“We have made a number of strategic investments into South Africa digitalised economy,” said Dall’Omo.

Siemens technology through smart pre-paid metering connected to a smart digital grid allows for optimised distribution of electricity regardless of whether it is distributed to small power users, or alternatively, medium and large users such as industrial complexes and malls. It allows for the real-time monitoring and control of the electricity grid. The system can alleviate both the cost burden of copper cable theft of between R5 and R7bn, as reported by the SA Chamber of Commerce and Industry, and the municipal debt owed to Eskom reaching into the billions.

In terms of rail, according to Dall’Omo, Siemens technology is being used at the Gauteng Nerve Centre. New (GNC) signalling systems on the PRASA network are being centrally controlled through a state of the art operations centre. The technology enables greater efficiencies in rail operations and train safety in Kaalfontein, Johannesburg. The system allows for more frequent service through higher line capacity, and is a first of its kind on the continent.

Siemens Digital Services allows for the remote monitoring of wind turbines in Jeffrey’s Bay. Remote monitoring takes place in Denmark and includes monitoring of all wind turbines throughout the year. There is real time trouble shooting and error correction to ensure maximum availability of all turbines and the technology will be applied across other wind farms in South Africa including Sere, Noupoort, Loeriesfontein and Khobab wind farms.

Other digitalisation benefits:

  • Infrastructure: Intelligent building technology reduces energy costs by up to 40%. Traffic management solutions allow for up to 20% fewer traffic jams, accidents and CO2-emissions.
  • Healthcare: Internal data management reduces laboratory test errors by 73%.
  • Manufacturing: Totally integrated automation together with Digital Prototyping can reduce engineering costs by up to 30%. This means manufacturing companies can get products to market twice as fast without compromising on quality.
  • Renewable energy: Through smart grid technology, renewable energy sources are integrated into energy grids and can be done at up to 40% lower costs.

While South Africa may rank second in the Sub-Saharan region on the Networked Readiness Index, it only comes in at 70 out of 142 globally.

“That’s not to say progress has not been made but in order for South Africa to compete on the world stage, the IoT and digital transformation must be part of today’s business conversation. There are also a number of downstream benefits in the digitised economy. The world is moving away from trading in goods and services and towards data trade,” cocludes Dall’Omo.

Editor: Darryl Linington
Follow @DarrylLinington on Twitter

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