22 November 2017

Ethiopia: Software Potential


The global economy is heading towards being technology and knowledge driven, and this is raising the importance of ICT sectors like software and the software-based services industry, where software is everywhere in our products and services today - ranging from cellphones, cars to mobile apps.

This is not lost on the government of Ethiopia. The government has made the development of information and communications technology (ICT) one of its strategic priorities, recognizing the sector as a "key driver and facilitator for transforming Ethiopia's predominantly subsistence-agriculture economy to an information and knowledge based economy. and society that is effectively integrated into the global economy."

Through its national "ICT Park" projects, which aims at attracting multi-national ICT service companies, the government is aiming to benefit software developers, as they are one of those companies that are involved in the project along with manufacturers, system integrators, incubators and Research and Development centers.

Many believe that the ICT industrial park will play a paramount role in enhancing international competitiveness and accessibility to organizations engaged in the software sector.

The software industry is viewed by many Ethiopians as a sort of future sunrise, independent, and cool industry where any dynamic and vibrant young man can create something and be competitive. It presents an avenue - a conducive one at that - to upcoming young people of the country to be creative and put in their contribution's to the nation's socio-economic development in the process. Potentially, the sector can contribute to a developing economy, like Ethiopia's, through absorption of labor and the development of human capital in the economy. There is already an urban sub-culture of young software programmers emerging in Ethiopia, and the onus is to maintain and further steam the momentum.

Moreover, the software sector can not only increase the relative value of professionals and programmers, but it can also help augment the capabilities of managers and entrepreneurs. The growing importance of human capital, as seen in developed countries, has led to innovative models of entrepreneurship and organization, pioneered by the software sector, and these can potentially take root here in Ethiopia and spread to other sectors of the country's industry. Direct spillovers from software (IT) sector can easily be diffused to other service industries as well.

Furthermore, Ethiopia's Growth and Transformation Plan, which is hinged/supplemented with huge infrastructural undertaking, cannot be facilitated without huge software usage. Some of our undergoing projects are very big and complex that there needs to be software usage to optimally and smoothly use them and to fully function their purpose.

From mega hydro plants like the Renaissance Dam to huge power grids, and the transport infrastructures that have been installed and being undertaken are all helped and dependent on software usage. In this regard, the Ministry of Communication and Information Technology (MCIT) has revealed that the sector is contributing hugely and playing its intended role.

In an age of knowledge and an evermore globalized and interconnected economy, software is integral to a country's competitive advantage. Software application and IT services can play a central role for Ethiopia's economic growth, by providing continued enhancement of comparative advantages for the world market like the Japanese and Korean experiences with automobile industry and electronics can attest. The software industry can also give Ethiopia an economic edge by boosting its export performance, like India where "its software sector surpassed the export income of any of its export products that began 100 years ago."

Some of that benefits have already been felt in Ethiopia's economy already. Citing the Ministry of Trade and Industry, the Huffington Post has revealed that more than 700 companies in computer technology and 95 software businesses are serving customers worldwide at a fraction of the cost elsewhere, bringing in private sector opportunities to the country in the process.

While the government is working to heighten the international competitiveness and accessibility of the software sector through its ICT project, and while the budding sector so far is proving to be a boon to the economy - contributing in bringing in foreign currency and creating job opportunities - still, a lot needs to be done in order to solve the bottlenecks facing it and further develop and maximize its contributions to the country's socio-economic development. One is to make skilled manpower available at highly competitive rates, and the other is to enhance the competitiveness of the sector and the market for it

All in all, Ethiopia's software (ICT) sector should be further developed as it can play a central role for its economic growth whilst creating intra-service/inter-sectoral development and generating positive external effects. Though less visible than the macro contributions to employment and foreign exchange, the sector can be a source of productivity improvement for all industries, and can have powerful long-term benefits for Ethiopia's industrialization and growth.


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