Not Embracing Tech Transformation Costly for the Private Sector

Ethiopia’s digital transformation aims to overcome structural barriers to inclusive prosperity, alleviate macroeconomic imbalances and emphasise sectorial priorities. The government has indicated the private sector’s crucial role in realising the full potential of digital transformation.

The plan encourages local investors to invest in ICT. It aims to improve access to capital by facilitating incubation for startup initiatives. The strategy also intends to develop a supporting ecosystem for ICT companies by offering networking opportunities, mentorship, and access to appropriate resources.

The private sector needs to catch up to what is unfolding right before its eyes. Although the role of the private sector in advancing digitisation is essential, Ethiopia’s digital transformation is spearheaded mainly by public enterprises. With the World increasingly going digital, businesses have had to adapt to the changes and leverage digital technologies to stay competitive.

The private sector has been the driving force behind the development of many digital technologies. From smartphones to cloud computing and artificial intelligence, many of the technological advancements today are the results of private-sector innovations. As businesses compete to gain a competitive edge, they invest in research and development, creating new technologies that improve efficiency, increase productivity, and reduce costs. These technological advancements have profound economic implications and can help businesses succeed and grow.

Businesses of all sizes invest in digitisation to streamline processes, improve customer experiences, and gain deeper insights into their operations. Through these efforts, companies achieve efficiencies to deliver products and services more quickly and accurately. This can result in cost savings and increased profits, which can be reinvested into research and development, further fueling innovation and digital transformation.

As more and more businesses adopt digital technologies, customers find it easier to access services. This is more important for developing countries, where digital adoption has lagged behind Western economies. Private companies in these regions invest in infrastructure, training programs, and other resources that help people get online and gain the knowledge and skills they need to succeed in a digital economy. As access to digital technologies increases, so does education and economic growth, which can lead to increased social mobility and shared prosperity.

The private sector is critical in developing new business models in the digital economy. New technologies such as the sharing economy, blockchain, and 3D printing disrupt traditional business models. These advancements create entirely new markets and business opportunities previously impossible or unthinkable. Private companies are at the heart of these new business models, using innovative strategies to create value, reach new customers, and generate new revenue streams.

The private sector has a significant role in advancing digital economies, from creating new technologies to implementing and adopting them in businesses and society. In many parts of the World, private companies are driving innovation and creating new business models, which have massive implications for economic growth, job creation, and overall social progress. As the pace of digital transformation continues to accelerate, the role of the private sector will become even more critical, and businesses must embrace this change to remain competitive and relevant in a rapidly changing world.

The Ethiopian private sector must relieve itself of the current dizziness and lead the unfolding digital transformation: benefiting itself while contributing to the advancement of society at large.

11th Year • July 2023 • No. 119 EBR