The Road to Virtualisation (in Business & Financial Times, 10 July 2020)

As you will surely know, Covid-19 is quite infectious (though much less so than measles for example), serious or deadly for a small proportion of those infected, and numbers infected can grow exponentially.

In Ghana at the moment, the daily number of people detected to have covid-19 is doubling every 3 to 6 weeks. Our health system is already creaking under the strain, so it’s obvious that this growth, if it continues unchecked, will soon overwhelm it.  We must implement the well known basic preventative measures (hand washing, physical distancing and so on) that slow the spread of the virus, and exhort others to do so too.

On a happier note, the pandemic has given a huge boost to another potentially exponentially growing process, with more positive effects. This is digital (or virtual) transactions or processes, ranging from the use of mobile money, to video call work meetings: “virtualisation”.

But looking ahead, in Ghana and other similar countries, what is needed to make the most of the opportunity for virtualisation?

One vital factor is enabling investment. On a personal note, I have been looking for finance to scale up my business, so have spent some time with a few investors over the last year.  “Viral digital” is what makes some of them salivate. They hope to find a digital product to invest in, with limited costs for scaling up for more users once the product is developed, which can have fast growing user numbers, and an exponentially expanding revenue base.

But this investor enthusiasm is potentially misleading. Such investors are essentially looking to reap the low hanging fruit borne by trees planted and cared for by others over many years.  No investment in tree planting, no low hanging fruit. In this analogy, the tree planting corresponds to  massive earlier investments to support internet based virtualisation. Some of that is by individuals, for example in buying smartphones, but much of it is by private companies, for example in building fibre broadband and fast mobile data networks to carry information.

This highlights the short-sightedness of government’s recent special taxes on telecom operators and present policy to restrict MTNs market. MTN are by far the largest investor in strengthening Ghana’s internet infrastructure over recent years. It will not encourage MTN to continue this vitally needed investment to have the prospect of the resulting profits being essentially seized by Government or given to other telecom operators. Such actions by government will have the long term effect of increasing the prices of telecoms for consumers relative to other goods, or making telecoms less profitable for investment.

These understandable but short-sighted policies discourage investment in the telecoms sector, which is the backbone of digitalisation, and push it towards non-value-adding buying and selling activities which already take too large a proportion of Ghana’s investment. Government should instead be helpful by giving more tax breaks on the right sort of investment,  since our nation’s ability to make the shift to virtualisation with its huge long term cost-efficiencies will be a decisive factor in the long term future of our economy

Alongside the need to encourage hard infrastructure investment for the internet is the need for “soft infrastructure”. I refer to training and familiarisation with how to use digital processes , including gaining the confidence to entrust one’s hard earned cash to them.  This can happen in schools and colleges, building on the huge shift towards online delivery that the pandemic has forced on us, provided we make the investments needed now  in “training the trainers”, in this case teachers and lecturers who are likely not to be “digital natives”, to encourage and drive continuing virtualisation, and in the hardware needed by schools and colleges. This vital skills-building also needs to happen in businesses, at least those with ambition to grow; and within families who understand that only digitally aware children will be fully equipped to thrive in coming decades.

There are also investments needed in complementary or enabling systems such as mapping information, for example allowing online orders to be delivered cost-effectively. Here the government should be commended for the Ghana Post Office digitalisation project, which has provided an additional means for generating digital addresses throughout the country. However, there has been a lack of energy and attention to following through to ensure the benefits are delivered as quickly as possible. This reflects our general tendency to focus on spending project funds and the associated infrastructure (in this case the app that generates post office location codes) rather than defining and managing the realisation of the benefits which should have been the reason the money was spent.

These various categories of investment, both public and private, are mutually supportive. Without the right skills and confidence of the population in using digital systems, hard infrastructure investment will not deliver its full benefits, and conversely there is limited value in teaching people to make use of internet-based processes if the hardware is not there to make these run well.

Last but definitely not least, is investment in content. After all, virtualisation is just a delivery mechanism: the question is what is it delivering? We have seen that the internet is often used spreading misinformation, and can encourage us all to waste vast amounts of time. And we have also seen, particularly in these pandemic times, that it can be a tool for connection across distance, for reducing negative environmental impacts of physical travel and deliveries, for widening horizons and increasing global connection, and for a huge range of learning. Increasing the positive outcomes requires building skills and values that are not directly to do with the internet at all: respect and care for others, creativity, a commitment to continuous learning and self-improvement. Achieving these is what will determine the collective value we get not just  from virtualistion, but from the future in general.  And the challenge to build these skills and values is not just for our educational institutions, but is one for all of us.