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Digitisation is changing the fortunes for Kenyans whom employment has become dodgy. The digital economy carries the promise of unlimited opportunities. [Photo/CNBC]

Digitisation is changing the fortunes for Kenyans whom employment has become dodgy.

With the digital economy carrying the promise of unlimited opportunities, this has become the latest solution for the country’s unpredictable economy.

Since the early 2000s, the country’s economy witnessed a turning point where digitisation was being adopted at a growing rate.

While it took some time for it to pick, Kenya has become a showcase for what the digital economy can do to empower the masses and push them into the future, faster. The first 15 years of this economy are a witness in the Kenyan case.

According to Resolution Insurance CEO, Peter Nduati, digitisation is at the acceleration point on the classic S-curve, indicating where new services, products and technologies are emerging.

Many industries and societies are in constant transformation, with “new” ideas challenging” old” ones, he adds.

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“The objective that drives change and development is the desire to improve productivity because higher productivity is the most important explanation of long-term prosperity. Higher productivity leads to higher incomes,” Nduati says.

He adds that each person produces more goods and services and therefore receives a higher income.

Higher incomes can then be used for increased consumption, more investment, more public services, but it can also mean more leisure.

Digitisation Leading to Big Changes

He, however, says that those who rely on digitisation should be aware that new technologies require many factors in order to have full impact.

“E-commerce is a good example of this since its roots date back to the late 1800s, with the introduction of an innovative idea: mail order. And even though the Internet was invented in the 1950s, e-commerce (mail ordering via the Internet) started to take off years later, in the late 1990s,” he enthuses.

Today, E-commerce is still only about five per cent of all trade, which is about the same as what mail-order trade accounted for when it was at its peak.

Nduati says that digitisation affects the way people trade. He says that logistics have been trimmed through barcode systems, price comparison sites contribute to better competition and major traditional retailers have implemented e-commerce strategies.

“The introduction and adoption of new technology may take time since many factors must be in place, but the development does not stop. It is important though that laws and other restrictions do not challenge developments.”

Today, there are many indications that digitisation is transforming more and more areas because many factors are in place. He says that to achieve a significant impact, digitisation has to be widely diffused within the economic and social fabric of a nation.

“For this to occur, digitisation has to fulfil several conditions including affordability to allow scalable impact, ubiquitous to reach the most population of a national territory, accessible by multiple fixed and mobile voice and data devices, reliable and providing sufficient capacity to deliver vast amounts of information at speeds that do not hinder their effective use.

Challenging Old Ways of doing Business

“Digitisation now touches every part of the economy in our country, this is by introduction of  e-citizen for faster access to government services, introduction of online filing of taxes by KRA, introduction of digital employment/ freelancing via Ajira Digital, payments have been made easier by M-Pesa, Airtel Money and Mobile banking technologies, access to utilities has been made easier using digital technologies, shopping has been simplified with the emergence of online retailers such as Jumia, Kilimall etc. also digitisation allows governments to operate with greater transparency and efficiency.”

Nduati adds that digitisation has proven to benefit the country in a number of ways; impacted on reducing unemployment, improving quality of life, and boosting citizens’ access to public services, has led to the creation of jobs, it fundamentally reshapes business models, lowering barriers to entry and expansion to new markets, it lowers the costs of doing business, it makes advertising easy and measurable i.e. via social networks and search engines, it enables financial inclusion and enables expansion of businesses to new territories.

Digitisation has developed and is challenging old ways of doing things in many areas.

For several decades, digital technologies have been playing a key role in boosting the efficiency of process engineering and production processes but the digital transformation is capable of even more.

He adds that it can revolutionize supply chains, disrupt conventional business models and create entirely new business models.

The question is how it will change the way we produce goods and services, consume and live. How will people work, consume and live by 2050? he poses.

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Kenya is my home and its development and growth my motivation.

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