89289 I CT Information & Communication Technologies INNOVATE • C ONNEC T • TRANSFORM www.worldba nk.org/IC T ICT as an Enabler of TransformaƟon in Ethiopia Marc Lixi Mariana Dahan January 2014 i Table of Contents EXECUTIVE SUMMARY vi BACKGROUND 1 Ra onale for this report 1 Telecom landscape in Ethiopia 2 ICT context in Ethiopia 2 Global trends in ICT 3 Report structure 6 FOSTERING DEVELOPMENT OF AN IT-BASED SERVICES INDUSTRY IN ETHIOPIA 8 Introduc on 8 ICT Private Sector in Ethiopia 8 Global opportuni es in IT-based services 10 Emerging trends in IT-based services 11 Current status of the IT-based services sector in Ethiopia 14 Possible strategies for developing an IT-based services Industry in Ethiopia 19 ENHANCING PUBLIC SECTOR PERFORMANCE WITH ICT 27 Introduc on 27 Challenges and opportuni es in the public sector in Ethiopia 27 New emerging trends in the public sector 37 Suggested way forward: embedding ICT in the public sector in Ethiopia 42 Summary of recommenda ons for ICT in the Public Sector 44 ICT IN THE HEALTH SECTOR 46 Health sector: stock-taking in Ethiopia 46 Na onal trends and prospects for Ethiopia 46 Healthcare Solu ons for Ethiopia: 47 High-growth poten al technologies for healthcare service delivery 49 Recommenda ons for sector development 51 ICT FOR AGRICULTURE AND RURAL DEVELOPMENT 54 Stock-taking of the agricultural sector in Ethiopia 54 Global trends and prospects for Ethiopia 55 Recommenda ons for sector development 59 CREATING AN OPEN INNOVATION ECOSYSTEM 62 Introduc on 62 Ethiopian innova on ecosystem: a state-of-play 62 Suggested opportuni es and approach for Ethiopia 63 Suggested way forward: launching an open innova on program for Ethiopia 64 The expected results 67 ii STRATEGIC RECOMMENDATIONS FOR ICT-ENABLED TRANSFORMATION IN ETHIOPIA 69 Crea ng an enabling environment: regulatory, legal, and ins tu onal framework 70 Shared Infrastructure 70 Shared Services 70 Applica ons and e-Services 70 Capacity building, skills development, and business incuba on ac vi es 71 Innova on Ecosystem 71 In summary 71 ANNEXES 75 Annex 1: Overview of latest tariff reduc ons by Ethio Telecom 75 Annex 2: Basic topology of IT and IT-enabled services 75 Annex 3: A.T. Kearney Global Services Loca on Index 2011 76 Annex 4: Loca on Readiness Index 77 Annex 5: Gartner Hype Cycle for Business Process Outsourcing 2012 79 List of Figures, Tables and Boxes Figure 1: Total market for global and domes c outsourcing (2020) 12 Figure 2: Loca on Readiness Index (LRI) framework 14 Figure 3: The 2011 E-Government Strategy and Goals 30 Figure 4: Analy cs derived from a one-day func oning of the 311 system for ci zen response in the US 32 Figure 5: Health environment in Ethiopia 47 Figure 6: Poten al benefits of using mobiles for rural development 56 Figure 7: An ar cula on of recommenda ons for Ethiopia 69 Table 1: Summary of recommenda ons in priority order to the Government of Ethiopia xii Table 2: Doing Business Rankings 2014—selected economies in East Africa 9 Table 3: Es mated job crea on from IT-based Services 11 Table 4: Educa on demographics 15 Table 5: IT costs 16 Table 6: Quality of infrastructure 17 Table 7: Environment 18 Table 8: Risk ra ngs of doing business 18 Table 9: Sector maturity 18 Table 10: Summary of recommenda ons in priority order for fostering development of an IT-based services industry in Ethiopia 26 Table 11: Overview of key aspects to consider for an interoperability framework in Ethiopia 34 Table 12: Summary of recommenda ons in priority order for enhancing public sector performance with ICT in Ethiopia 45 Table 13: Disbursements for mHealth and eHealth ini a ves in 2010 51 Table 14: Overview of poten al applica ons of ICT in the health sector 52 Table 15: Summary of recommenda ons in priority order for strengthening health systems with ICT in Ethiopia 53 Table 16: Summary of recommenda ons in priority order for ICT-enabled development of agricultural sector 61 Table 17: Summary of recommenda ons in priority order for crea ng an Open Innova on Ecosystem in Ethiopia 68 Table 18: Summary of recommenda ons in priority order to the iii Government of Ethiopia 72 Box 1: ICT trends 4 Box 2: Overview of the global megatrends and inherent development challenges and ICT solu ons to address them 5 Box 3: Overview of prominent trends in the development discourse 7 Box 4: IT-based services in Kenya 14 Box 5: The 311 system for ci zen response in the US 31 Box 6: Example of one-stop/single-window delivery of public services 34 Box 7: Electronic iden fica on (eID) applica ons 35 Box 8: Ci zen feedback mechanisms, channels, and tools 39 Box 9: Examples of innova on and co-crea on ini a ves involving governments and ci zens 40 Box 10: Examples of successful implementa on of cloud compu ng infrastructure by governments 41 Box 11: Open innova on instruments 65 Box 12: Mechanisms of open innova on 65 iv Acknowledgments This report has been made possible with funding from Particular thanks to the World Bank colleagues from the World Bank Country Management in Ethiopia and the Finance and Private Sector Department, Educa- support of the Government of Ethiopia. tion, Agriculture, and the Poverty Reduction and Eco- nomic Management sectors, whose helpful comments The report has benefited from extensive and valuable and inputs have significantly enriched this report. comments from colleagues from within and outside of the World Bank including Randeep Sudan (Sector Finally, special thanks to Mather Pfeiffenberger and Manager, TWICT), Junko Narimatsu, Elena Kvochko, Denis Largeron (TWICT), for the tremendous help in Tim Kelly, Arleen Cannata Seed, Carol Hullin, Mavis editing and updating the report, and for the graphic Ampah—all from the Transport, Water and ICT Unit of design. the World Bank (TWICT); and Ilary Lindy (World Bank Institute). v Executive Summary Rationale for this report microtasking, the next evolution of the global out- sourcing market recognized as a viable method of Over the last two decades, the world has witnessed addressing youth unemployment in developing coun- an unprecedented increase in access to information tries. Governments around the world continue to find and communication technologies (ICT). The Govern- ways to innovate and achieve growth by leveraging ment of Ethiopia situates ICT within the wider context these technological advancements, as witnessed by of its socioeconomic development objectives and be- the movement towards open government and open lieves that it should take advantage of today’s most data. At the same time, cybersecurity emerges as a innovative and reliable technologies to accelerate the top priority issue for many countries facing growing rate of economic growth and alleviate poverty. This threats to critical infrastructure and systems. report explores how ICT can be leveraged to foster private sector development, enhance public sector Building on the knowledge and insights drown from performance, and leverage ICT across sectors, partic- the best international practices, this report highlights ularly in the agriculture and health sectors, and how how ICT can be leveraged across sectors to achieve all these efforts can lead to the emergence of an open better development results. innovation ecosystem. To answer these questions, this report takes stock of recently launched ICT initiatives in Ethiopia and develops sector-specific recommenda- Fostering private sector tions based on best international practices. development with ICT- enabled innovation Global trends for ICT The ICT private sector in Ethiopia is relatively na- The technology landscape is evolving at an unprec- scent, particularly when compared to other African edented scale and pace. Studies predict that by 2015, countries (e.g., Kenya, South Africa, and Mauritius) 1 zettabyte (1012 gigabytes) of data will flow over the that have emerged as viable players in the global IT Internet, and by 2020, 50 billion devices will be con- and IT-enabled services market. Revenues from the nected. It is expected that by 2014 mobile phones will outsourcing sector in Africa have reached nearly US$2 overtake PCs as the most common web access device billion, growing at 30–40% annually—but Ethiopia has worldwide, particularly in middle and low-income yet to reap the benefits of these advancements in countries where fixed-line broadband is still expen- the region. Initiatives for building a vibrant IT sec- sive or unavailable.1 With the explosion of social me- tor and IT-based services are in progress; however, dia and the emergence of an “Internet of things”,2 much work remains to be completed, particularly in ICT infrastructure is becoming essential for govern- the policy, legal, regulatory, and institutional areas, ments and businesses to harness the value of big data, in the development of a highly skilled talent pool, over one-third of which will live in the cloud by 2020.3 the adaptation to new technologies and trends, the Cloud computing is also enabling the emergence of improvement in access to finance, and ICT infrastruc- ture development. 1 h p://www.runmobile.com/mobile-devices-to-overtake-desktop- Challenges and opportunities in the IT sector by-2014/ and IT-based services in Ethiopia 2 Internet of things: The vision of the internet of things is to a ach ny devices to every single object to make it iden fiable by its own unique IP address. These devices can then autonomously communicate with one The opportunity offered by IT-based services globally another. Source: Financial Times Lexicon is tremendous, with an addressable market estimat- vi 3 See h p://www.slideshare.net/EricssonFrance/vision-2020-50-billion- ed to reach nearly US$800 billion in 2013—of which connected -devices-ericsson less than 25% has been tapped thus far. Further, it is estimated that the industry will create around 7.6 million direct jobs by 2016.4 Understanding current Enhancing public sector trends in IT and IT-based services is crucial for devel- performance with ICT oping countries to design forward-looking strategies for growing their industry. A quick diagnostic of IT- Leveraging ICT in the public sector can potentially based service development and potential in Ethiopia lead to enhancing performance through improved has been conducted leveraging the framework for service delivery, lowering costs, and improving gov- the Location Readiness Index (LRI), a tool developed ernance. Citizens and businesses alike benefit from by the World Bank in partnership with McKinsey & Co.5 improved public sector management, efficient ser- With regard to Ethiopia, the LRI indicates a relative vice delivery, better access to information, and im- good level of competitiveness in terms of low risks proved interactions between public agencies and civ- and a stable environment. However, there is a criti- il servants. Government benefits as well, of course, cal need to improve overall ICT infrastructure and by enhancing its own ability to deliver services. As to build capacity at all levels, as Ethiopia is weak in such, ICT is a cross-sector enabler and platform for these areas. providing government services in an effective and responsive manner. It allows for streamlined interop- Suggested way forward for IT sector erability among different public entities and systems and IT-based services in Ethiopia and is a key element in embracing a citizen-centric approach: Ethiopia may wish to start by developing a strategy targeted to developing the IT sector and IT-based ser- • On the supply side: ICT strengthens government vices. This will help prioritize the development of the capacity to develop and deliver public services to industry and align it with national development goals. citizens and businesses; Establishment of an industry association targeted • On the demand side: ICT enables citizens and for the IT sector and IT-based services in Ethiopia is businesses to effectively engage with the govern- certainly recommended, as is the importance of bor- ment, setting in motion powerful mechanisms of rowing lessons from countries like India and the Phil- citizen engagement and participation, enabling ippines, which demonstrate how a strong industry as- broader social inclusion, and leading towards sociation is central to the industry’s success. This role more advanced public service delivery of govern- of promoting the sector can also be considered for ment entities. adoption by ICT-ET, the national industry association for ICT. Ethiopia may also wish to establish an institu- Ethiopia is well positioned to grasp these opportuni- tional framework to strengthen incentives to attract ties and achieve its key development and economic foreign investment. These include tax incentives, growth goals by streamlining ICT in the public sector. training subsidies, and other incentives that gener- ate positive externalities. Access to finance is one of Challenges and opportunities in the public the key constraints for SMEs and companies that are sector in Ethiopia looking to launch or expand. Ethiopia may want to adopt innovative approaches for increasing access to Currently, Ethiopia’s key challenges with respect to finance for these firms. For example, Ethiopia may public service delivery include, among others: wish to explore options to attract investments by for- eign venture capital firms by connecting them with • Operating in “silos”: Many government entities local entrepreneurs. are designed and operate services separate of other services, resulting in lack of interoperabil- ity among systems, duplication, and extreme in- efficiencies in service delivery; • Limited ICT access: The public has inconsistent access to government services depending upon office locations and rare online availability; • Paper-based approach: Information is gathered 4 h p://www.ncc.gov.ph/files/lacdao_phil_it_bpo_roadmap.pdf through paper forms, which require inefficient 5 Loca on Readiness Index (LRI) Toolkit, infoDev website, h p://www processing steps, limits auditing and analysis, and vii .infodev.org/en/Publica on.986.html slows time to deliver; • Inconsistent identification: Valid documents for and training,6 but also to specialized TVET training for identification vary across services and are mostly the manufacturing industry. In addition, basic finan- paper/document-based; cial literacy training, along with the provision of some • Cash payments: Many fees are paid either in cash simple financial products, such as micro-credits and at the government office or require the submis- farmers’ insurance, could be provided using the tel- sion of a receipt after payment at the national ecenter network. The extended telecenter network bank, resulting in potential improper activities could serve as a platform for public service delivery: and inefficient processes. a new channel for accessing e-services and a range of relevant e-government applications. In addition, and despite tremendous progress achieved in the public sector reform in Ethiopia, some “big pic- At a more macro level, the Government of Ethiopia ture” challenges impede its further progress. These also recently released a comprehensive e-government belong to the areas of: strategy which lays out its vision on the development of e-services and applications, as well as the deploy- 1) ICT connectivity and e-government services ment of required shared infrastructure, standards, and delivery frameworks to enable public service delivery. As part 2) ICT capacity gaps, at both demand- and supply- of the strategy, 219 e-services have been identified, side levels comprising informational and transactional services to 3) good governance mechanisms be implemented over a five-year period. The strategy 4) citizen feedback to government entities envisages service delivery through four channels: on- line portals, call centers, mobile devices, and common Each of the challenges above can be addressed in service centers. It is also recommended that the gov- a holistic and programmatic manner, looking at ernment create a common infrastructure and mecha- times to ICT to provide effective, implementable nism for rapid deployment of ICT-enabled public ser- solutions. vices, including a shared computing infrastructure and development of the systems needed to deliver govern- Suggested way forward: embedding ICT in the ment services electronically. With the advent of cloud public sector in Ethiopia computing infrastructure, shared platform, standards, and common tools that arise to support government At a general level and in order to facilitate ICT- agencies, the Government of Ethiopia now faces the enabled transformation throughout the public sector, opportunity to embrace these technologies and agile the Government of Ethiopia may wish to consider de- solutions to improve public service. veloping a comprehensive regulatory and institutional framework that allows for the mainstreaming of ICT The recommendations on ICT connectivity (increasing across sectors and government entities. the number of fiber optic infrastructure access points, establishing a national telecenter network, and de- With regard to ICT connectivity and e-government ser- velopment of a government cloud infrastructure) ad- vices delivery, the study makes several recommenda- dress the capacity gaps from the supply side. With re- tions that span both areas. Given the important pub- gard to the demand side, sustained capacity-building lic investments made recently in deploying fiber optic efforts targeting public officials, as well as extensive infrastructure across Ethiopia, it is recommended outreach campaigns for citizens, local businesses, and that the government focus on extending the reach to other key stakeholders are strongly recommended as existing connectivity nodes, namely by increasing the another prerequisite for creating an enabling envi- number of access points. There is an opportunity to ronment. The creation of a central Public Service In- build on the success of ICTAD, PSCAP and CIDEV initia- novation Unit, which will coordinate the innovation tives and scale up the network of telecenters, using, efforts across government agencies and ministries, is as a possible option, the premises of the Ethiopian also recommended. postal network in rural areas. 6 A recent IEG report (2011) reveals that under the ICTAD Project 3,283 The newly-established telecenter network could be people were trained at CIDEV centers, among whom were about 1,000 cer- used not only to provide access to basic ICT services fied trainers (TOT). viii With regard to good governance mechanisms and citi- developed by the Federal Ministry of Health, can be zen feedback, new ICT tools and social media have successfully used not only in emergency situations opened powerful new possibilities to public admin- and disease outbreak reporting, but also for a variety istration for dialogue and cooperation with citizens. of other tasks, such as more effective malaria pre- The Government of Ethiopia could leverage the power vention, logistics of distribution of supplies, or health of ICT to fundamentally transform the way it engages data mapping. and interacts with its citizens, seizing upon initia- tives such as open data portals and geo-mapping to While these improvements in the back-office func- enhance service delivery. tions are in progress, more can be done to develop additional channels for health service delivery to citi- With citizen well-being in mind, the Government of zens. The Ministry of Health is exploring possibilities Ethiopia can take a more programmatic approach to to use mobile phones as a platform to deliver training public service delivery by embracing technologies and and health services. Potential benefits of a better le- ICT solutions which enable the targeting of citizens veraging of mobile technologies are: treatment sup- entitled to social benefits. While addressing the needs port through mHealth applications; patient tracking of the most vulnerable and marginalized citizens, the and consistent and efficient record-keeping; health Government of Ethiopia can leverage identity man- financing; clinical decision support; electronic medi- agement/biometric technologies to build additional cal records systems; medical surveillance and disas- cost-saving and revenue-generating activities. ter management; and education and awareness (via gamification). The government has long recognized Governments around the world are already consid- the importance of telemedicine and committed itself ering an ICT-for-transformation agenda. For exam- to its implementation. Using less costly technologies, ple, Singapore’s 2011–2015 ICT strategy promises to health workers in Ethiopia could be equipped with usher in a new era in which the government aims simple video players (e.g., DVD players) for education to shift from a “government-to-you” approach to and discussion purposes even in remote areas. Con- a “government-with-you” strategy in the delivery sidering that providing individual training on disease of public services. The goal of such initiatives is to prevention is challenging, community access points facilitate co-creation and interaction between the can serve as information centers for health workers government, the people, and the private sector to or teachers or for interested individuals. bring about greater value creation for the country and the people, and Ethiopia is well positioned to Suggested way forward: embedding ICT in the join this movement toward a better, more efficient, health sector in Ethiopia and democratic government. The study’s recommendations are related to two as- pects of the health sector: back-office services and Leveraging ICT across sectors healthcare services to citizens. For each of these two aspects, the adequate and targeted use of ICT Streamlining ICT in the health sector can make a significant difference for the citizen and impact the entire health sector. While significant im- The use of ICT presents a tremendous opportunity provements in back-office operations can be brought for Ethiopia to improve the efficiency and quality by shared infrastructure and shared services such as of health care. For example, the use of digital pa- biometric technologies and electronic medical re- tient records through mobile applications for health cords, the delivery of healthcare services to citizens care providers and pharmacists contributes to error can be greatly enhanced by specific mobile applica- reduction in diagnosis, treatment, and prescribing. tions and telemedicine. The Ministry of Health continues to digitize health re- cords, which will ensure that complete health records Training opportunities for health workers using the are easily accessible by doctors, the records are kept means of ICT, as well as noticeable reductions in time safely, the files are stored in a standardized manner, and costs of health services delivery to patients can and that patient waiting time is decreased. Health be strong incentives for medical staff in Ethiopia to Geographic Information Systems, which are also being work in rural areas of the country, where additional ix medical resources are badly needed. Ethiopia can to wider communities using pre-existing communica- grasp the opportunities offered by ICT-enabled solu- tions networks. tions to respond to those needs and move faster to- wards the achievement of the MDGs. Suggested way forward: embedding ICT in the agricultural sector in Ethiopia Streamlining ICT in the agricultural sector The agricultural sector can benefit from ICT-enabled Considering the importance of the agricultural sector services and infrastructure at different stages of the in Ethiopia’s economy, it is crucial to have up-to-date crop production cycle and at all levels of the supply innovative technological solutions that will increase chain. Based on the above, and taking into account output, make the market more efficient, and enable the specificity of Ethiopia, this report proposes three every small producer to more effectively manage technologies that can significantly impact the agricul- their business. Ethiopia has already implemented a tural sector in Ethiopia: number of agriculture-related ICT initiatives. For in- stance, in 2008, Ethiopia Commodity Exchange (ECX) • The use of remote sensing using satellite imagery, was established. In 2005, the International Livestock in particular for monitoring the impact of climate Research Institute started a project entitled Improv- change; ing Productivity and Market Success, among many • The development of mobile applications and other ICT-related initiatives. However, these may be services aimed at smallholder farmers, for in- characterized as “top-down” initiatives. What are stance for access to agricultural market informa- lacking are “bottom-up” services and applications tion services, financial services, and agricultural that assist smallholder farmers. insurance; • The use of community radio broadcasting as a way Mobile phones are the key technology for reaching of disseminating basic agricultural information on out to a broader market. They are used for a wide good practice. variety of agriculture-related tasks, including price and insurance information, market linkages, distance Creating an open innovation ecosystem education, resource management, and rural finance.7 International experience and examples confirm that The Ethiopian government can play a catalytic even simple mobile applications can change the life role in establishing appropriate conditions for ICT- of farmers. For instance, agricultural insurance avail- enabled innovation through initiatives such as IT able for purchase through mobile phones in neighbor- parks, living labs, innovation competitions, and ing Kenya enable local farmers to insure their farm hackathons. The establishment of the ICE-Ethiopia inputs against drought and excess rain.8 Similarly, (now iceaddis) Hub network is among the boldest mobile phones are used to link farmers, agents, and initiatives and first steps towards the creation of an insurance companies or to request veterinarian ser- open innovation environment in Ethiopia. One con- vices via SMS. Radio Frequency Identification (RFID) straint is the lack of a skilled IT workforce. Thus, can be used to provide unique identifiers and track increased exposure to international best practices people, livestock, assets, inventory, and other ob- would be critical to trigger cutting-edge, innova- jects.9 Likewise, sensors and satellite technologies tive, homegrown solutions. could be implemented to monitor better use of water resources using a wireless sensor network.10 Finally, A program adapted to the Ethiopian context could community radio is a cheaper medium to reach out establish a more systemic approach to innovation by (i) pooling scare resources and using open innova- tion mechanisms and (ii) promoting open innovation 7 The World Bank’s ICT in Agriculture eSourcebook, available at www mechanisms and related instruments for local skills .ICTinagriculture.org, contains informa on on more than 200 different development and community engagement. applica ons. 8 Kulimo Salama, h p://kilimosalama.wordpress.com/ Suggested way forward: creating an open 9 For a study of the use of RFID to track livestock in Namibia and Botswana, innovation ecosystem in Ethiopia see the eTransform Africa sectoral study of Agriculture and Rural Develop- ment, available at: h p://www.etransformafrica.org/sector/agriculture. A case study of using ICTs for water management in Egypt is available There exists in Ethiopia an opportunity to create a x 10 at: h p://www.etransformafrica.org/sites/default/files/Complete-Report- collaboration framework to support the develop- Agriculture_0.pdf, pages 78–84. ment of digital and entrepreneurial skills linked to a National System of Innovation in Ethiopia. Such inter- By implementing the above recommendations vention will also provide an opportunity to link the Ethiopia should expect the following results: emerging Ethiopian innovation ecosystem with inter- (i) increased ability by ICT stakeholder organiza- national innovation players active in Ethiopia.11 The tions including iceaddis to generate and apply new proposed program will introduce novel, lightweight knowledge that will positively impact various stake- mechanisms through which innovation collaboration holders in Ethiopia; (ii) improved innovative ICT ap- can flourish. Local developers and the research com- plications for citizens, businesses, and government munity need to be linked with private sector and civil agencies; and (iii) increased regional, national, and society players in order to generate sustainable ICT- pan-African R&D and institutional linkages in the enabled services. area of innovation. The program should include the following interde- pendent components: building linkages with existing Summary of strategic donor initiatives; establishing knowledge-transfer fo- rums, including specific training for entrepreneurs; recommendations for the ICT creating innovation funds; strengthening cooperation sector in Ethiopia and research dissemination through: (i) building a knowledge base and financing and cofinancing stud- The Government of Ethiopia has embarked on an ICT- ies exploring and evaluating the needs and opportuni- enabled transformation journey, aiming to enhance ties for ICT innovations; (ii) disseminating results at government efficiency across sectors, deliver better an Innovation Forum and conference; (iii) creating a public services, enhance agriculture and health ser- training program for researchers; and (iv) conduct- vice delivery, improve the lives of its peoples, provide ing foresight studies for stakeholder management opportunities for economic growth, and create a vi- and creation of joint visions for the future and pol- brant ICT industry. icy roadmaps for strategic activities;12 training R&D and incubator experts; and capacity and capability- In an attempt to provide a clear guidance on the way building for incubatees. forward for Ethiopia, this report performed an ex- tensive, although not exhaustive, assessment of the private and public sectors, health and agricultural sectors, and provided focused, implementable rec- ommendations on how to streamline ICT in all these sectors. The study has also explored the challenges 11 As is intended to be done between iceaddis and German knowledge and opportunities to create an open innovation eco- hubs. 12 Foresight studies can provide vision and assessment of up-and-coming system in Ethiopia. The key recommendations for technologies and services that can be moved from the laboratory into each sector studied in this report are summarized broad-based strategic implementa on. in Table 1. xi xii TABLE 1: Summary of recommenda ons in priority order to the Government of Ethiopia Private sector Public sector Health sector Agricultural sector InnovaƟon ecosystem Laws, policies, Develop strategy Interoperability and security -- Na onal strategy on Local-regional regulaƟons, and legal/regulatory frameworks; electronic ID; ICT in agriculture compe veness strategies framework for IT-based digital signature, mobile development strategy; industry payment; Open Gov Na onal Innova on framework; postal financial Strategy; IPR13 policies; services InsƟtuƟons, enƟƟes, Strengthen Industry Public Service Innova on Strengthen health units Strengthen EIAR,14 iHub, Living Lab agencies Associa on Unit and MoH Agri-Net, EXC, ELMI15 IncenƟves, Tax incen ves; training -- Incen ves for insurance -- R&D subsidies promoƟon subsidies; support companies; me and services cost reduc ons Infrastructure, Roll out high-speed Cloud infrastructure; ICT Biometric health ICT access points; ICT access points; cloud connecƟvity broadband; IT park; access points records; eHealth, na onal spa al data infrastructure; business business incubators mHealth infrastructure incubators Services (enablers) Strategy for mobile Authen ca on/e-ID; Open Authen ca on/ Mobile applica ons Cloud compu ng- money data; feedback mechanisms e-ID on biometrics; for price data enabled solu ons and telemedicine; digi zed services records Skills, training, 4-pronged skills Training for civil servants; ICT training for medical Training on SMART and START skills capacity building development program TVET16 and ICT programs staff extension services; program through telecenters community radio Processes and One-stop shop for -- Inter-agency Satellite remote Foresight processes, procedures startups coordina on sensing; RFID17 clustering and -tagging networking Access to finance Venture Capital Fund PPP models and community- PPP for na onal health Mobile financial Innova on funds based financing insurance system applica ons (e.g., M-PESA) 13 Intellectual Property Rights (IPR) 14 Ethiopian Ins tute of Agricultural Research (EIAR) 15 Ethiopian Commodity Exchange (EXC) and Livestock Market Informa on (ELMI) 16 Technical and Voca onal Educa on and Training (TVET) 17 Radio Frequency Iden fica on (RFID) Background Rationale for this report the World Bank is developing in consultation with all Bank sectors and the government itself. The focus of Over the last two decades, Ethiopia has achieved re- the CPS is less on the telecom sector, where the Gov- markable progress toward social and economic indi- ernment appears to perform quite well, but rather on cators. Many Millennium Development Goals (MDGs) the ICT sector as the key enabler to other develop- are now within reach and, despite several waves of ment areas, where the Government of Ethiopia re- the global financial crisis, Ethiopia’s economy is de- quires assistance and the World Bank’s support. veloping and diversifying resiliently. Helped by the expansion of road, power, and market networks, the To achieve its growth and development objectives, Ethiopian economy is overcoming devastating conse- the Government of Ethiopia is determined to build on quences from severe droughts, humanitarian disasters the successful outcomes of a series of Bank-funded and post-conflict crises in the Horn of Africa. projects—such as ICTAD18, PSCAP19, PSD and Finan- cial Sector Capacity Building Projects, as well as ag- Over the same time period, the world has witnessed ricultural productivity and multisectoral HIV/AIDS an unprecedented increase in access to information projects, among others. The remarkable progress and communication technologies (ICT). Nowadays achieved by the Government of Ethiopia with the sup- ICT is increasingly used as a key enabler and trans- port of these projects can only be magnified by a pro- formational tool to foster economic growth, accel- grammatic approach supporting a comprehensive ICT erate knowledge transfer, develop local capacities, implementation program. and raise productivity in a variety of sectors, in both developed and developing countries. Analytical evi- To facilitate this approach, the Government of Ethio- dence shows that development projects with a signifi- pia has requested the ICT Sector Unit of the World cant ICT component have a higher potential to achieve Bank to prepare a comprehensive report on how ICT greater outcomes on the ground than the ones not can be used to achieve a true transformation of the supported by ICT. Therefore, the World Bank’s work Ethiopian economy and society. Therefore, this report on ICT has grown rapidly in recent years, with more explores how ICT can be leveraged to foster the de- than 1,300 Bank investment projects across sectors velopment of an ICT-enabled industry and the private now including ICT components, or 74% of the overall sector in general, to enhance public sector perfor- World Bank portfolio. mance, to develop the agriculture and health sectors, and finally how all these efforts can lead to the emer- This is why the Government of Ethiopia sees ICT within gence of an open innovation ecosystem. the broader context of its socioeconomic development objectives and believes that it should take advantage To answer these questions, this report takes stock of today’s most innovative and reliable technologies of current and recently-launched ICT initiatives in to accelerate the rate of economic growth and allevi- Ethiopia and develops sector-specific recommenda- ate poverty in the country. Therefore, the telecom tions based on international best practices that help and ICT sectors stand as key strategic pillars in the leverage the transformative power of ICT to improve government’s Growth and Transformation Plan (GTP the social and economic well-being of its citizens 2010/11–2014/15), which very clearly states that the and achieve rapid and sustainable socioeconomic Government of Ethiopia should focus on “ensuring all development. inclusive telecommunication service delivery and ICT assisted development, as it is key for other develop- 18 The World Bank Informa on and Communica ons Technology Assisted ment programs”. This is also aligned with the new Development (ICTAD) Project. Country Partnership Strategy (CPS 2011–2015) that 19 The World Bank Public Sector Capacity Building Program (PSCAP). 1 Telecom landscape more than 23 million today, with a target of 56 million by 2015. Internet subscriptions have also rapidly in- in Ethiopia creased from 38,000 in December 2010 to more than 250,000 in December 2013 and with a target of 5 mil- With the quality of telecom infrastructure and ser- lion by 2015. vices in Ethiopia having once been among the poorest in Africa, the Government of Ethiopia has taken deci- The sudden growth in subscribers is mainly due to the sive steps towards advancing Ethiopia from a country huge drop in prices offered by Ethio Telecom. The with low mobile, Internet, and broadband penetra- monthly cost of Internet connection (incl. 600 min- tion rates to a highly connected society. This process utes) fell from ETB60 in 2008 to ETB46 in 2013 (23% has been supported by the development of national reduction). Broadband infrastructure is under devel- and regional backbone networks that helped reduce opment (more than 1000 km of fiber being rehabili- the cost of international bandwidth while improving tated, plus new links via OPGW, more than 500 School the affordability of high-speed Internet. Net sites connected, etc.). Monthly cost of a 2 Mbps ADSL connection has fallen from ETB 47,479 in 2008 to By signing a two-year management contract ETB 500 in 2013 (99% decrease). Likewise, Ethio Tele- (2010–2012) with France Telecom, the state-owned com has reduced tariffs across zones for calls made Ethiopian Telecom Company (ETC) took a further step from landlines in Ethiopia by 81.9% to 45 cents per towards changing course and transforming the tele- minute. Annex 1 provides a quick overview of these com landscape in Ethiopia. After two years under the tariff reductions. management of France Telecom, the operator serves 20 million customers as of December 2012, with a 50% growth in number of subscriptions between July 2011 ICT context in Ethiopia and December 2012. Moreover, Ethiopia Telecom has recently introduced a range of services to extend na- The Government of Ethiopia is currently looking at tional and international services, including the LTE ways to mainstream ICT across sectors and promote service to be deployed in 2013. The public opera- innovation that could trigger a fundamental economic tor is rehabilitating its optical fiber network (more transformation. The 2005–2010 Plan for Accelerated than 10,000 km of fiber optics) and is using different and Sustained Development to End Poverty (PASDEP) lines for services such as credit transfer, callback and emphasized ICT development as a means to enhance voicemail, in order to limit congestion. These results sustainable development, poverty reduction, human have been achieved in partnership with the Chinese resource development, and good governance. The manufacturer ZTE who signed a US$1.5 billion con- recently-launched, five-year Growth and Transforma- tract in 2010 to provide telecom equipment to Ethio- tion Plan (GTP 2011–2015) goes even further, stating pia Telecom, from backbone equipment to cellphone that “embracing ICT is essential to creating new jobs, devices. new business opportunities, to education and to im- proving the effectiveness of government administra- To ensure even higher quality service, Ethiopia Tele- tion and service delivery”. com signed an agreement with the Ethiopian Elec- tric Power Corporation to facilitate the installation The Government of Ethiopia has been proactive in im- of the Addis-Bahir Dar and Addis-Galafi optical fiber proving the regulatory environment that will allow for network (OPGW) to enhance the quality and the reli- a more profound impact of ICT on the national econ- ability of the line. The company has also completed omy. As a step toward this transformational vision, steps to eliminate faulty power equipment in Addis the Government promoted the Ethiopian National ICT Ababa and is launching a similar assessment of re- Policy, which provides guidance on leveraging ICT in gional states. every single sector of the economy. While formulating a national policy for ICT is a necessary step towards Ethio Telecom is the sole telecom/ICT operator in mainstreaming ICT across sectors, the National ICT Ethiopia, and unlike other monopolistic cases in Af- Policy is being implemented in a fragmented manner, rica, it has demonstrated its capacity to significantly with each sector working independently on projects improve its services and reach out despite the ab- and reforms. This approach results in a lack of coher- 2 sence of open market and healthy competition. Over ence among initiatives, which decreases synergies. A the past three years, the number of mobile subscrib- more holistic approach can be achieved with the par- ers has gone from less than 4 million in June 2010, to ticipation of all the stakeholders, including citizens, businesses, academia, civil society organizations, and to harness the value from big data. Studies predict donor agencies, collaborating towards the emergence that by 2015, one zettabyte of data will flow over the of a robust information society. In this context, the Internet, and that by 2020, there will be 50 billion government can serve as an enabler to nurture ICT- connected devices, with over one-third of all data liv- enabled innovation, helping it to grow, removing bar- ing in the cloud.25 There is a trend of virtualization riers, and creating the most favorable climate for it of organizations, processes, people, and technology, to flourish.20 and the decoupling of humans, information, and ma- chines in the delivery of services. Cloud computing is World Bank analysis found that the Government of also enabling the emergence of microwork and micro- Ethiopia’s ICT initiatives have not been comple- tasking, which could potentially contribute to solving mented by private sector endeavors.21 Nevertheless, youth unemployment in developing countries to some the stable political outlook following elections in 2010 degree. Moreover, the big data revolution is leading is expected to produce a more attractive investment to new opportunities for analytics, including the anal- climate.22 Recent dialogue between the World Bank’s ysis of data from mobile phones and other connected ICT Sector Unit and the Government of Ethiopia illus- devices for providing more customized services to us- trated the Government’s willingness to leverage ICT- ers, besides enhancing planning and monitoring ca- enabled innovation to attract foreign direct invest- pabilities. Governments around the world are also ment (FDI) flows into the economy to spur growth. continually looking for ways to innovate and achieve This report argues that the development of ICT in- growth leveraging these technological advancements, frastructure in particular can help trigger consider- as witnessed by the movement towards open govern- able amounts of investment while generating signifi- ment and open data. At the same time, cybersecurity cant fiscal revenues and employment opportunities.23 has become one of the top priority issues for many To this end, the Government of Ethiopia enacted a countries as threats to critical infrastructures and sys- competition law in 2003 and set up a framework for tems increase. public-private partnerships.24 More details and specific examples related to the Despite these efforts, there is still a need to improve above-mentioned ICT megatrends are highlighted in the legal framework and relevant incentive mecha- Box 1. nisms to allow for private sector uptake and to foster vibrant ICT industry development. Improvements to The coming decades will see global economic growth the ICT sector will directly contribute to economic increasingly being generated in emerging economies. growth and development in Ethiopia, on a scale com- In fact, by 2025, six major emerging economies— parable to the “best in class” countries that have set Brazil, China, India, Indonesia, South Korea, and the trends for the ICT sector globally. Russia—will account for more than half of all global growth.26 However, challenges remain as a quarter of The section below highlights the most recent global the people in developing countries still live in poverty technology and societal trends that reflect interna- (defined as living on less than US$1.25 a day) while tional best practices in ICT-enabled innovation. many still lack basic needs such as adequate sanita- tion, electricity, and clean drinking water. Moreover, development efforts require an understanding of an Global trends in ICT evolving global ecosystem, responding to new demands and challenges. These include megatrends such as (i) The technology landscape is evolving at an unprec- climate change, urbanization, and aging; (ii) evolutions edented scale and pace. With the explosion of social in global business/economic models, such as a growing media and the Internet of things, ICT infrastructure focus on South-South cooperation and public-private is becoming essential for governments and businesses partnerships; and (iii) increased emphasis on improved service delivery, public participation, and inclusive 20 The World Bank, 2010, “Innova on Policy: A Guide for Developing growth. Innovative ICT solutions can help overcome Countries”. these challenges as presented in more detail in Box 2. 21 The World Bank, 2010, Ethiopia Country Management Unit, CAS Progress Report, September 2010. 22 Economic Intelligence Unit, August, 2011. 25 See h p://www.slideshare.net/EricssonFrance/vision-2020-50-billion- 23 The World Bank’s Group ICT Strategy approach paper, October, 2011. connected-devices-ericsson 3 24 The Public Private Dialogue (PPD) set up in 2010 with support from 26 Global Development Horizons 2011—Mul polarity: The New Global UNDP, IFC, and the World Bank. Economy, World Bank Box 1: ICT trends Internet of Things, big data, and analyƟcs services to cloud compu ng. Cloud compu ng offers The Internet of Things refers to the integra on of objects governments a clear and compelling value proposi on and and places into the digital world. Recent advances include will most likely con nue to lead the IT revolu on for the the increasing number of connected devices and the next few years. sophis ca on of sensors in mobile phones.27 During 2008, the number of devices connected to the Internet exceeded the Social media number of people on earth and is expected to reach 50 billion Needless to say, social media has revolu onized the by 2020. Sensors and actuators embedded in physical devices way people communicate, collaborate, and engage in (e.g., mobile phones, roadways, ca le and pacemakers) commerce. Users on Twi er are now sending 400 million are linked through wired and wireless networks pumping tweets per day and Facebook is now used by 1 in every massive data back into the web. The growing penetra on 7 people in the world. Social media has been effec vely of smartphones and media tablets (e.g., iPad) is making leveraged across the society for purposes including pervasive access to high bandwidth vital, including availability collabora on, social network analysis, content crea on, of 4G, 5G and further wireless generaƟons. Studies es mate crowdsourcing, and business marke ng. It has allowed that smartphone penetra on is expected to reach 17% of the firms and governments to leverage the power of co- global mobile subscriber base by 2014, possibly growing to creaƟon by crea ng collabora ve pla orms to explore 10% of total mobile subscribers in developing countries.28 The mul dimensional ways of solving difficult problems by network traffic generates big data (huge volumes of data) blending strategic thinking (e.g., mission, vision and that flow to computers for analysis that can become tools for values, budget, and resources) and crea ve thinking (e.g., understanding complex behavior of people or equipment. user experience, environment, and culture). Social media These analyƟcs can provide governments and businesses has also been proven to be a powerful instrument to drive with significant compe ve advantage in understanding and poli cal change. A current example is the Middle East, predic ng many cri cal aspects of ci zen/consumer behavior, where the Arab Spring’s ar cula on of demands for reform needs, and demands, and can poten ally have a huge impact was to an extent driven by the social media revolu on. on how strategies for na onal development are considered. Social media is progressively a rac ng a en on as a way for governments to harness ci zen par cipa on and Cloud compuƟng collabora on in public policymaking processes. Cloud compu ng is the style of compu ng where virtually unlimited compu ng power is delivered “as a service” Open government and open data using the Internet, and is considered the “third revolu on” Governments globally are using the power of the Internet of the IT industry following the PC revolu on and the to improve service delivery and empower ci zens by Internet revolu on. Cloud compu ng has had a game- making more informa on public and easily available. Today, changing impact on how IT is delivered by governments and open data portals are established in nearly 30 countries businesses and will con nue to do so in the coming years. and have been driving user-driven local innova on.30 In July It is es mated that global IT spending on cloud compu ng 2011, Kenya became the first low-income group country could top US$1 trillion by 2014 and global cloud services to have an open government data portal with the launch revenue is expected to jump 20% annually.29 By 2020 of the Kenyan Open Data Ini a ve. Shortly a er, Moldova over one-third of all data is an cipated to be living in the bucked a history and percep on of corrup on to launch an cloud. The benefits of cloud compu ng include saving of open data website, where budget and census informa on, opera onal costs, increased produc vity, reduced risks, and for example, is easily visualized and downloaded. The increased flexibility. Hence, governments are increasingly Moldova open data portal, the first in the region, launched showing interest in adop ng cloud compu ng technology with 67 datasets from five government agencies, with for providing e-government services. For example, in 2011 each agency providing a minimum of three data sets per the Government of Moldova with support from the World month to create a pipeline of data. The number of data Bank launched a project for the migra on of e-government sets increased to 670 over two years and covers full public 27 Trends that Ma er:84 Technology, Societal and Business Trends, Gartner, 16 June 2011. 28 “Be careful what you wish for: A look at the future of mobile data”, Price 4 Waterhouse Coopers, 2011. 29 See h p://www.slideshare.net/CiscoIBSG/ten-technology-trends-that- 30 See h p://www.data.gov/opendatasites will-change-the-world-in-ten-years disclosure of expenditures, thus enhancing transparency cybera ack. For example, it was reported that the number and accountability in the country. The World Bank has of cybera acks (e.g., phishing, hacking) on the US federal supported these groundbreaking ini a ves and is now networks increased by 680% over a five-year period (2006– leveraging both internal and external exper se to help 2011)31 and the threat is increasing for developing countries other developing countries, such as Russia, Macedonia, as well. Cybersecurity has become pivotal for governments Mongolia, the Philippines, India, Burkina Faso, Kenya, to protect the economy and ensure the privacy and safety Tanzania, Nigeria, and Rwanda, move toward more open of na onal assets and financial resources. government. Cybersecurity As countries become more dependent on ICT and converge 31 See h p://www.infosecisland.com/blogview/21131-GAO-680-Percent- towards a “digital world”, they become more vulnerable to Increase-in-Government-Cyber-A acks.html Box 2: Overview of the global megatrends systems, smart logis cs, smart buildings, and smart grids. and inherent development challenges and ICT Energy savings can also be realized through improvements soluƟons to address them in high capacity broadband, dematerializa on (i.e., the subs tu on of physical goods and services with virtual Climate change ones), mobile services, common standards, climate Climate change is considered to be the defining challenge monitoring and analysis, and ci zen e-par cipa on, which of our genera on. Global temperature has risen by 0.75 °C can be used as an integral part of a successful transi on to a since 1900 and ten indicators of global climate, including low-carbon economy. Reducing carbon emissions in the ICT global temperature, sea level, and ocean heat content, sector itself is also cri cal. Solu ons such as virtualiza on all show a warming trend over recent decades.32 Studies and low-energy cooling systems can reduce emissions by up es mate that developing countries, being most vulnerable to 27%–the equivalent of 111 million metric tons (Mt) of to these threats, would have to bear 75 to 80% of the costs carbon emissions in 2020.35 In addi on, server consolida on of damages caused by the changing climate. For example, by providing “cloud compu ng” services across sectors 2°C warming above preindustrial temperatures could can enable further efficiency. As economic growth alone result in 4–5% permanent reduc ons of GDP in Africa and is unlikely to be fast enough for developing countries to South Asia.33 At the same me, much of emissions growth counter threats from climate change, interna onal support is expected to occur in developing na ons, whose current as well as interdisciplinary partnerships will be essen al for carbon footprint is dispropor onately low compared to countries to successfully transi on toward a low-carbon advanced na ons and whose economies must grow rapidly economy. to reduce poverty. However, most developing countries lack sufficient financial and technical capaci es to manage the UrbanizaƟon increasing climate risk. The global phenomenon of urbaniza on will con nue to create many challenges, par cularly for developing Innova ve ICT solu ons can help emerging countries adapt countries. People con nue to move to ci es in search and mi gate climate change by helping to build “smarter” of employment, educa onal opportuni es, and higher ci es as a way towards a low-carbon economy. Studies standards of living. For the first me in history, more than half indicate that ICT solu ons have the poten al to reduce of the world’s popula on lives in urban areas and by 2030 it global carbon emissions by up to 7.8 Gigatonnes (Gt), or 15% is likely to increase to 60%.36 The number of megaci es (with of total business as usual (BAU) emissions by 2020.34 These popula ons over 10 million) is an cipated to rise from 19 in solu ons include smart technologies such as smart motor 2007 to 27 in 2025, most of them in developing countries.37 Studies show that 90% of urbaniza on is taking place in 32 See h p://www.climatechange.qld.gov.au/pdf/climate-change-in-qld- facts.pdf 33 World Development Report 2010: Development and Climate Change, World Bank The Climate Group and Global eSustainability Ini a ve (GeSI). 2008. 5 35 34 Boccale G., M. Löffler, and J. M. Oppenheim. 2008. “How IT Can “SMART2020: Enabling the Low Carbon Economy in the Informa on Age.” Cut Carbon Emissions.” The McKinsey Quarterly, McKinsey & Company, 36 Popula on Reference Bureau, 2010 October 2008. 37 United Na ons developing countries, with the Africa Region experiencing figure doubled to 759 million, and is projected to rise to 2 the highest rate of urbaniza on at 3.5% annually.38 Rapid billion by 2050.40 While this is an important challenge for urbaniza on is transforming urban centers into drivers of advanced na ons, aging is occurring much faster in low- or economic growth, but at the same me, places enormous middle-income countries. In fact, the share of the world’s pressures on governments to meet rapidly increasing older popula on residing in less-developed regions is demand for services, as the number of slum dwellers is expected to increase from 65% in 2010 to about 80% by the projected to double from 1 billion to 2 billion globally over year 2050.41 For example in La n America, life expectancy the next 25 years. The challenges of urbaniza on also cause jumped by 22 years over the last 50 years, resul ng in a problems such as traffic conges on, increased carbon popula on that is now dominated by working age adults emissions, pollu on, crime, corrup on and poverty, which with significantly fewer children.42 Needless to say, it are all difficult to manage.39 is important to build efficient and cost-effec ve health care systems that can look a er the needs of the aging To this end, it is important to recognize the enabling role popula on. ICT-enabled solu ons can contribute to tackling of ICT to render posi ve change in the realm of urban this challenge. governance. For example, improved ICT infrastructure and pla orms can help create a basis to extend the reach and Telemedicine, electronic pulse readers, eHealth records, quality of public services, including basic services such as and paperless prescriptions are all “smart” solutions that sanita on, water, and electricity. ICT pla orms and tools can transform the way health care is offered around the (e.g., GIS, mobile, social media) can help map issues in the world. Analytics and language processing technologies slums and facilitate ci zen engagement for collabora vely may also help to drastically reduce the time needed to crea ng solu ons to tackle local problems. ICT has the evaluate and determine correct diagnosis for patients. poten al to transform urban ci es and slums from a As aging accelerates, it becomes increasingly important “problem” to an “opportunity”. to incorporate innovative ICT solutions in order to improve accessibility, speed, accuracy, and efficiency of Aging healthcare. The world is aging at a rapid pace. In 1980, there were 378 million people in the world aged 60 or above. In 2010, that 40 Popula on Reference Bureau, 2010. 38 See http://siteresources.worldbank.org/INTAFRICA/Resources/ICT_ 41 h p://www.un.org/esa/socdev/ageing/whatsnew%20PDF/Ageing%20 Urban_Governance_Final_pub.pdf Comprehensive%20report%202010%202%20September.pdf 39 CARE, 2006 42 “La n America: Ready for an Aging Revolu on?”, World Bank, March 2011. Policy formulation is becoming more challenging for are developed. Box 3 details some of the most promi- developing countries as the global environment con- nent trends in the development discourse. tinues to evolve at a rapid pace and adds complexity to development. Understanding these trends is criti- cal for developing countries to compete in the global Report structure economy and achieve sustainable development. It is The following chapters take a detailed look at the evident that innovative ICT solutions can help coun- Ethiopian context by studying each sector’s specifici- tries address these global challenges (climate change, ties and inherent challenges. Whenever possible, they urbanization, and aging) while building on new business also identify opportunities to leverage ICT for sus- models (shift to services, South-South cooperation, and tained economic growth in Ethiopia. More precisely, public-private partnerships), with an increased empha- the report explores how ICT can be used to (i) foster sis on notions such as improved service delivery, public the development of ICT-enabled industry and the pri- participation, and inclusive growth. Such models are vate sector (Chapter 2); (ii) enhance the performance expected to shift the way ICT policies and strategies of the public sector (Chapter 3); develop the health 6 Box 3: Overview of prominent trends in the South-to-South cooperaƟon development discourse The effec veness of South-South development coopera on is a rac ng a en on. The 2008 Accra Agenda for Ac on (AAA)43 Improved service delivery and public recognized the importance of South-South coopera on and parƟcipaƟon acknowledged that much can be learned from the experience Improving service delivery and increasing public of developing countries. Today, more low- and middle-income par cipa on has become a priority for governments, as countries are working together, and learning from each other the explosion of new technologies is allowing for a rapid through South-South and triangular coopera on (that is, diffusion of ideas and prac ces and enabling the public to between developing countries and developed countries). demand higher standards of service delivery in the public New ICT-enabled pla orms and technologies such as cloud sector. ICT innova ons—such as mobile apps, geospa al compu ng are allowing policymakers and ci zens to share technologies, social media, and crowdsourcing pla orms— development experiences and adapt solu ons to solve their present a game-changing approach to achieve improved own unique issues. If well designed and implemented, South- service delivery and increased public par cipa on. South coopera on can be more innova ve and sustainable than North-South aid, as it can be er adapt to the context of less- developed countries and can be a strong driver to catalyze true Inclusive growth local capacity, thus leading to more sustainable development. A number of developing countries have absorbed the fundamental challenge of bringing about more inclusive growth, drawing on the successful programs of emerging na ons with Public-private partnerships large poor popula ons such as Brazil, China, and India. Rapid Increased a en on has also been given to public-private and sustained poverty reduc on requires inclusive growth that partnerships (PPPs) in the development agenda. PPPs allows equitable alloca on of resources with benefits from enable the mobiliza on of private sector resources to economic growth accruing to every sec on of society across deliver essen al public services such as infrastructure, sectors. Expanding access to broadband, par cularly in rural and health, and educa on. Governments and development marginalized communi es, can help to ensure inclusive growth ins tu ons acknowledge that the public sector alone cannot by affording ci zens increased access to public informa on and meet the funding requirements to bridge the na onal and ICT applica ons that improve public services. It can also help global infrastructure gaps. Moreover, it is well known that countries reach the Millennium Development Goals (MDGs) the private sector has the technical capacity to implement and start a virtuous growth cycle through the crea on of new and opera onalize projects faster than can governments. ICT-enabled job opportuni es and improved produc vity. Many PPP projects have been proven to be effec ve. The global economic crisis and rising costs are leading to a reexamina on of how best to incorporate PPP models in 43 The Accra Agenda for Ac on (AAA) is an interna onal agreement that development. aims to highlight the need for specific reforms in the aid sector to achieve improved aid effec veness. sector (Chapter 4) and the agricultural sector (Chap- the reader, each table classifies the proposed actions ter 5); and finally help create an open innovation eco- by type (layers) from the lowest layer (legal and regu- system (Chapter 6). latory environment) to the highest (processes and ac- cess to finance). The client, or the sector, can then The report concludes with a summary of strategic rec- develop its action plan around the layers that are not ommendations to the Government of Ethiopia and the yet in place in a particular field (e.g. if the legal and proposed next steps. The tables included at the end regulatory environment is already in place, the client of each chapter, capture a list of actions to be imple- can start its action plan with “Institutions and Enti- mented by the Government of Ethiopia, to improve ties”, or “Incentives and Promotion”). This way, the sector efficiencies by using Information Technologies proposed action plan can be easily adjusted to the in transformative ways. In order to make it easy to reality on the ground. 7 Fostering Development of an IT- Based Services Industry in Ethiopia Introduction development and trade in Ethiopia.45 International best practices reveal that building a vibrant local ICT Despite being one of the fastest growing economies industry will not only contribute to improving produc- in Africa, Ethiopia’s private sector is still extremely tivity and fostering innovation across key sectors of limited, predominantly small scale, and informal. The the economy, including the services (tourism) sector economy is largely based on agriculture, which ac- and industries, but will also allow Ethiopia to diversify counts for around 48% of the country’s GDP, and 85% its economy, and leapfrog economic growth by lever- of both total exports and employment, respectively. aging the tremendous opportunities presented in the The industry sector accounts for 14% of GDP and ser- global and domestic IT-based services market. vices around 38%, among which tourism constitutes the major part. Private foreign direct investment in 2011 was just 2% of the country’s GDP, significantly ICT Private Sector in Ethiopia lower compared to the 7.2% average of the low in- Since the change of government in 1991, the World come-group countries.44 It has been a long-term poli- Bank Group has contributed significantly to helping cy challenge for the Government of Ethiopia to diver- private sector growth and job creation in Ethiopia. For sify its economy and encourage private investment in instance, the Private Sector Development Capacity order to create jobs, enhance competitiveness, and Building Project46 has been actively taking measures achieve sustained growth. to facilitate the growth and competitiveness of the Ethiopian private sector by: improving the capacity of The government’s Growth and Transformation Plan the Privatization and Public Enterprises Agency;47 im- (GTP, 2010/11–2014/15) aims to achieve Ethiopia’s proving the business environment through implemen- long-term vision in sustaining the rapid and broad tation of competition policies; and strengthening the based economic growth path witnessed during the human and institutional capacity of the private sector. past five years. In this context, the GTP has set a Still, challenges remain in realizing the potential in- medium-term strategic framework for the next five cluding poor infrastructure, weak institutions and reg- year period that is expected to guide the country’s ulatory frameworks, and ineffective access to capital, efforts towards accelerating growth and transforming particularly for small and medium enterprises (SMEs). Ethiopia from a predominantly agrarian to a modern The government has been progressively making efforts and industrialized economy. The value-adding private to address some of these challenges, for example, by sector is considered the engine of the industrial sec- passing a competition law in 2003 and setting up a tor’s growth, which could help stimulate a massive Public Private Dialogue (PPD) forum in 2010 with sup- push for accelerating growth, managing risk and vital- port from UNDP , IFC, and the World Bank. However, ity, and creating employment opportunities. Ethiopia’s position remains low in the Global Competi- tiveness Report 2013–201448 (127th out of 148 econo- In 2006, the National ICT for Development (ICT4D) mies) and the IFC Doing Business Report 2014 (125th Five Year Action Plan for Ethiopia was launched out of 189) scoring significantly lower compared to through the Ministry of Capacity Building with support countries like Rwanda and Zambia (Table 2).49 from UNDP. The plan aims to build an ICT-driven econ- omy that could fully participate in an Internet-based and interconnected global economy. Development of 45 Na onal ICT4D Five Year Ac on Plan for Ethiopia 2006–2010, p. 60, a globally competitive local ICT industry and service h p://unpan1.un.org/intradoc/groups/public/documents/un-dpadm/ sector was integrated as one of the government’s unpan040825.pdf. 46 The World Bank project approved in December 2004. key policy commitments for fostering e-commerce 47 Established in 2004, under the Ministry of Trade and Industry. 8 48 Global Compe veness Report 2013–2014, h p://www3.weforum.org/ docs/WEF_GlobalCompe venessReport_2013-14.pdf 49 Doing Business Report 2014, h p://www.doingbusiness.org/data/ 44 World Development Indicators, World Bank exploreeconomies/ethiopia TABLE 2: Doing Business Rankings 2014—selected economies in East Africa StarƟng Business Doing Business Overall Ease of Trading Across Geƫng Credit ConstrucƟon Dealing with Paying Taxes Registering Insolvency ProtecƟng Resolving Contracts Enforcing Investors Property Country Borders Permits Rwanda 32 9 85 8 13 22 22 162 40 137 Zambia 83 45 57 102 13 80 68 163 120 73 Ethiopia 125 166 55 113 109 157 109 166 44 75 Uganda 132 151 143 126 42 115 98 164 117 79 Tanzania 145 119 177 146 130 98 141 139 42 134 Source: Doing Business Report 2014, IFC The ICT private sector in Ethiopia is even more na- in different regions, and had successfully trained 645 scent and small-scale especially compared to some SME operators (including 288 women) and helped 43 countries in Africa (e.g., Kenya, South Africa, Mau- private ICT startups to launch businesses. ritius) that have been strategically ramping up their local ICT industry and emerging as viable players in The private sector itself is also proactively taking ini- the global IT-based services market. According to es- tiative to strengthen the local ICT industry. In Novem- timates, revenues from the IT-based services sector ber 2010, a few private companies in partnership with in Africa are nearly US$2 billion and are growing at Google founded the Information and Communication 30–40% annually, making the sector emerge as a stra- Technology Association-Ethiopia (ICT-ET).51 ICT-ET’s tegic pillar for realizing export-led growth and for ad- plans are to progressively foster development of the dressing the issues of high unemployment. However, sector by launching activities including: an interna- Ethiopia has yet to reap the benefits of the advance- tional ICT conference in Ethiopia; a public-private ments in the region, which can be seen by the fact sector forum; establishment of an ICT park; and an that no reliable statistics are available on the sector ICT innovation competition. Notably, the ICT park due to its smallness in size. planned in Addis Ababa is designed to serve as the central hub of ICT-related business, knowledge, and Nonetheless, the Government of Ethiopia acknowl- research driven by the private sector. Additionally, a edges the importance of the ICT private sector and has technology hub called ICE-Ethiopia (now iceaddis)52 been making efforts to foster its development. The was founded in January 2011 with an aim of establish- Ministry of Information and Communication Technol- ing a national network of collaboration and a hub for ogy (MICT) through its ICT Private Sector Development locally-driven innovation.53 Coordination Directorate has recently set targeted goals to develop the sector. These goals include ICT Private firms are also launching IT-based services es- development promotion, ICT as enabler of other sec- pecially for increasing access to finance. Based on a tors, assisting SME development and creating a con- recently-changed directive concerning foreign owner- ducive environment for ICT businesses.50 The former ship, in 2010, Ireland-based M-BIRR set up a subsidiary Ethiopian ICT Development Agency (EICTDA) through in Addis Ababa focusing exclusively on the Ethiopian the World Bank-funded ICTAD Project had also taken market to deliver mobile money services quickly and decisive steps to foster tech-enabled SME develop- reliably to their customers across Ethiopia—including ment by establishing four business incubation centers 9 51 h p://www.ictet.org/index.php 50 Ministry of Communica on and Informa on Technology (MCIT), Ethio- 52 h p://iceaddis.com/ pia, h p://www.mcit.gov.et. 53 oAfrica, h p://www.oafrica.com/business/african-tech-hubs/ the unbanked population.54 M-BIRR recently concluded of the global economy. IT-based services are broadly a deal with the National Bank of Ethiopia and Ethio defined as below58 (a detailed typology of IT-based Telecom to start providing mobile banking solutions to services can be found in Annex 2): financial institutions (banks and MFIs).55 • IT services: Comprise the following nine seg- Foundations for building a vibrant ICT industry are ments: remote infrastructure management (RIM); in progress and can potentially leapfrog Ethiopia’s custom application development; systems inte- economic growth by leveraging the opportunities gration; package software implementation and presented in the global IT-based services market. support; IT consulting; embedded systems; proj- However, much work remains to be done including ect design; plant engineering; and products. in: policy, legal, regulatory, and institutional frame- • IT-enabled Services (ITES): Comprise manage- works; development of a highly-skilled talent pool; ment of core and non-core business systems, pro- adaptation to new technologies and trends; improv- cesses, people, and physical assets. The services ing access to finance; and improving ICT infrastruc- offered are often uniquely designed based on ture. This section includes an examination of cur- specific requirements, which include the follow- rent trends in the global IT-based services industry, ing six segments—basic voice; specialized voice; a quick diagnostic of the IT-based services sector in basic data; rules-based decisioning; research and Ethiopia, and a determination of key policy interven- analytics; and knowledge services. tions and strategies that could help Ethiopia’s ICT private sector become a key engine for job creation, The IT-based services industry has shown tremendous innovation, and growth across sectors. growth in recent decades, with India emerging as a leading offshoring destination. China, Malaysia, Mex- ico, and the Philippines have also positioned them- selves as attractive destinations. Other emerging des- Global opportunities in tinations include Egypt, which has actively promoted IT-based services itself as a low-cost destination for call centers and now leads the Middle East region ranking fourth in IT-based services (including business process out- the world in the A.T. Kearney Global Services Loca- sourcing or BPO) offer a distinct potential for devel- tion Index 2011 (Annex 3). In Africa, four countries oping countries to diversify their economies, create find mention among the top 50 locations in the index. jobs, and achieve global competitiveness. The global These include Ghana (27th), Senegal (29th), Mauritius opportunity offered by the industry globally is tre- (36th) and South Africa (45th). mendous with an addressable market estimated to reach nearly US$800 billion in 2013 of which less than Economic resilience of IT-based services and 25% has been tapped so far. Despite the economic projected growth downturn of 2007–2010, the market has been growing and is expected to reach US$1.5–1.6 trillion by 2020.56 Evidence suggests that trade in services is weathering The global IT-based services industry is estimated to the current economic crisis much better than trade create around 7.6 million direct jobs by 2016, par- in goods. Exports to the US from developing countries ticularly benefiting youth and women.57 that are relatively specialized in services have proven to be more resilient compared to countries that are What are IT-based services? specialized in exports of goods, transport services, or tourism services.59 The study explains that services With the rapid proliferation of ICT infrastructure and trade is relatively buoyant for two reasons: (i) it is increased cross-border trade in services, IT-based ser- less dependent on external finance compared to trade vices has become among the most dynamic sectors in goods, and has been less affected by the crisis-in- duced scarcity of finance; and (ii) demand for a range of traded services is less cyclical and therefore is not 54 h p://m-birr.com/ 55 2Merkato.com, Oct 2011, h p://www.2merkato.com/20111021479/ 73-mobile-coverage-in-ethiopia-says-report 10 56 Perspec ve 2020: Transform Business, Transform India, NASSCOM, 58 NASSCOM – McKinsey, “Perspec ve 2020” (2009) h p://www.nasscom.in/sites/default/files/upload/Perspec ve%20 59 Contrac ons in exports of goods and services to the US in the fourth 2020%20Press%20release%20presenta on.pdf quarter of 2009 were: India (2.5%), Brazil (13%), China (9%), and Africa 57 h p://www.ncc.gov.ph/files/lacdao_phil_it_bpo_roadmap.pdf (36%). subject to the big declines in demand that affect du- TABLE 3: Es mated job crea on from IT-based Services rable goods. Country EsƟmated jobs creaƟon from IT-based services Worldwide recovery from the recession is also a ma- (from latest data jor factor that will drive growth of the IT-based ser- vices industry. According to NASSCOM,60 IT spending available) is directly linked to GDP growth and is expected to India 3,000,000 (plus 9,500,000 grow by 6% in 2013, showing particular developments indirect jobs) in emerging markets. IT-based services are expected Philippines 926,000 to grow by about 4.2% in 2013.61 While focus on cost South Africa 350,000 (200,000 in BPO, control and efficiency remain, this growth is likely to 150,000 in IT) reflect new demands for IT goods and services. These projections present promising opportunities for de- Mauri us 2,500 veloping countries to make IT-based services as an Egypt 45,000 important means of job creation and national devel- Source: India: NASSCOM, Philippines: IBPAP, South Africa: DTI, Egypt: opment among others. World Bank, “Connec ng to Work” (2013), Mauri us: MIB 64 Increasing demand for skilled workforce availability of their talent pool can potentially benefit It is estimated that the global IT-based services in- hugely from this increased demand. dustry will create around 7.6 million direct jobs by 2016.62 Further, every single job created in IT-based services is estimated to create indirect employment Emerging trends in IT-based for 3 to 4 people in other sectors. Notably, India, the Philippines, South Africa, Mauritius, and Egypt have services been successful in creating employment from IT- Understanding current trends in IT-based services is based services. India’s case shows that 70% of jobs crucial for developing countries to design forward- are for young people in the age bracket of 26–35. In looking strategies for growing their industry. Accord- the Philippines women constitute 60% of the IT-based ing to studies, while core markets will increase by 1.5 workforce, which has increased from a small pool of times by 2020, contributing 20% of overall growth, the 4000 in 2001, is estimated to have reached 926,000 in remaining 80% will likely come from new verticals, 2013, and is expected to reach 1.3 million by 2016.63 customer segments, and geographies65 (see Figure 1). Availability of skilled manpower, however, remains a Gartner’s Hype Cycle for Business Process Outsourcing binding constraint for developing countries to benefit 2012 (Annex 5) suggests that while horizontal offerings from this huge opportunity. Even a country like India, (e.g., billing, payroll, strategic documenting, recruit- which has access to a large English-speaking talent ment) have reached maturity over time, the sector pool, is facing a shortage of skilled manpower. It has will experience continued emergence of analytics- been estimated that by 2012 India would have a short- intensive services (BPM-enabled BPO) and multi- age of 0.8 to 1.2 million people for the BPO sector, domain BPO (e.g., source-to-pay, order-to-cash). and it continues to have skill shortages. Therefore, it Further, the emergence of cloud-driven services and is obvious that countries that can quickly ramp up the business process utility are expected to replace the more traditional BPO services and will most likely be the longer-term successor in the industry. 60 The Na onal Associa on of So ware and Services Companies (NASS- The rapidly evolving IT-based services landscape makes COM) is a consor um that serves as an interface to the Indian so ware industry and Indian BPO industry. It maintains a state-of-the-art informa- it important for countries to have a forward-looking on database of IT so ware- and service-related ac vi es for use by both so ware developers as well as interested companies overseas. 61 NASSCOM, “The IT-BPM Sector in India: Strategic Review 2013— Execu ve Summary, h p://www.nasscom.in/sites/default/files/research 64 Based in part on data aggregated in “Africa’s Poten al in IT Enabled Ser- reports/STR13_Exec_Summary.pdf, p. 8. vices: Crea ng opportuni es for jobs and growth” (forthcoming), AFTEW, 11 62 h p://www.ncc.gov.ph/files/lacdao_phil_it_bpo_roadmap.pdf World Bank, 2014. 63 h p://www.gmanetwork.com/news/story/298940/economy/business/ 65 NASSCOM, h p://blog.nasscom.in/nasscomnewsline/2009/05/ bpo-revenues-rose-18-in-2012-ibpap the-indian-it-bpo-industry-cra ing-the-vision-for-the-next-decade/ FIGURE 1: Total market for global and domes c outsourcing (2020) 2000 380–420 1500–1640 1500 230–250 "ILLIONS 190–220 1000 200–250 500 500 0 Core Markets Growth in New Verticals New Customer /UTSOURCING 2008 Core Markets in Developed 3EGMENTS Market in New Countries s3-"S 'EOGRAPHIES s0UBLIC3ECTOR s"RAZIL s(EALTHCARE s2USSIA s-EDIA s#HINA s5TILITIES s)NDIA Source: NASSCOM.Perspec ve 2020: Transform Business, Transform India, April 2009. strategy in developing their industry. This section Media and entertainment presents some notable trends: new verticals; non- traditional delivery platforms; and emerging business Media and entertainment are also emerging as signifi- models, which can potentially create niche oppor- cant consumers of IT-based services. Traditional pub- tunities and allow Ethiopia to leapfrog ahead in this lishers are progressively shifting from print to digital highly competitive market. medium, and are under constant pressure to embrace new technologies including the use of social media a. New verticals (e.g., Facebook, Twitter). There is also increased fo- cus on convergence of telecoms, television, and In- E-government/impact sourcing ternet, which require high quality of service and end- to-end network design. For example, studies reveal The public sector is emerging as an important out- that Netflix traffic has overtaken web surfing in the US sourcer of IT-based services due to growing demands and accounted for 20.61% of downstream traffic dur- for e-government services. By leveraging invest- ing peak periods.67 In the entertainment industry, ani- ments in e-government, developing countries can mation is emerging as an outsourcing service, with an strengthen and grow their local IT-based services sec- estimated market of around US$80 billion.68 According tor. For instance, the Government of Kenya is con- to reports, the media and entertainment industries sidering “Impact Sourcing (IS)” as a possible way of are registering above average growth in many African digitizing government data by engaging unemployed countries, including South Africa and Kenya, and are and marginalized youth. These youth will take on expected to grow at around 5% GDP per capita until activities that range from basic data entry and im- 2015.69 The business opportunities for content pro- age capture to database creation and management. duction outsourcing in the media and entertainment The Rockefeller Foundation estimates that the global industry are immense and can potentially become market for Impact Sourcing is currently 4.5 billion and a niche area of focus for Ethiopia. As the domestic has the potential to reach US$20 billion and employ industry is still small-scale, Ethiopia may wish to 780,000 people by 2015.66 67 See http://www.sandvine.com/downloads/documents/05-17-2011_ phenomena/Sandvine%20Global%20Internet%20Phenomena%20Spot light%20-%20Netflix%20Rising.pdf 68 Tholons, 2008. 66 The Rockefeller Founda on, “Job Crea on Through Building the Field of 69 Tradeinvest Africa, “Africa: Where to Invest in Con nent’s Media Indus- 12 Impact Sourcing”, June 2011. try”, Jan 6, 2012, h p://allafrica.com/stories/201201091052.html. consider starting by providing content development services will cannibalize up to 15% of top outsourcing services to neighboring countries in the region such player’s revenue.74 Cloud sourcing is thus a promis- as South Africa. ing opportunity that enables IT-based services firms and entrepreneurs in developing countries to rapidly b. Non-traditional delivery platforms launch and scale up their businesses, even with little financing. Mobile applications Microwork Studies predict that by 2014 mobile phones will over- take PCs as the most common web access device Microwork, also called microtasking, allows firms to worldwide particularly in middle and low-income divide work into small tasks and use the Internet or countries where fixed-line broadband is still expen- simple GSM phones to outsource work directly to work- sive or unavailable.70 It is estimated that by 2015, 15% ers worldwide. Microwork is emerging as a promising of all mobile phones in Africa will turn “smart”.71 In business model that can provide small but sustained advanced economies, the introduction of mobile ap- income generating opportunities for disadvantaged plications has shown remarkable results in creating youth and women.75 Opportunities for microwork can high revenues for startups and SMEs. According to re- also be found on online marketplaces 76 where free- search, the market for mobile application develop- lancers from around the world can offer distinct ser- ment services is anticipated to reach US$100 billion vices that can range from US$1 up to several hundred by 2015.72 Mobile applications have a high potential of dollars per task. With the right policies and approach creating income opportunities for software develop- to implementation, microwork can become a signifi- ers in developing countries. cant opportunity for Ethiopia to create income op- portunities and local capacity, including in rural and Cloud computing marginalized communities. As mentioned in the introduction, cloud computing Rural BPO is continuing to present promising opportunities for the global IT-based services industry. Governments Rural BPO is increasingly attracting attention in are increasingly looking for ways to partner with the countries like India where costs in urban cities have private sector to adopt cloud computing technology been rising. One of the main advantages rural BPO for providing e-government services. has is in cost reduction. Rent is generally lower. Labor costs, utilities, and other expenses are also c. Emerging outsourcing models significantly lower. Moreover, rural BPO can provide job opportunities for women and youth as well as Cloud sourcing: cloud-enabled outsourcing help bridge the urban-rural digital divide. Accord- ing to NASSCOM, in 2010 there were about 50 rural The emerging trend of combining cloud computing BPO firms in India, employing about 5,000 people. and outsourcing is called “cloud sourcing”. Cloud BPO firms are continuously looking to outsource ba- sourcing offers a clear and compelling value proposi- sic work such as digitizing forms, data entry, cata- tion for the private sector as it helps reduce initial loguing books, or ensuring the accuracy of website and recurring investments on physical infrastructure content.77 Rural BPO can present a disruptive impact and continues to drive innovation while keeping costs to reduce poverty and foster social and economic low. Gartner has predicted that by 2012 20% of busi- development in rural communities. nesses would own no IT assets73 and that by 2015 cloud 70 h p://www.runmobile.com/mobile-devices-to-overtake-desktop- 74 Gartner, “Gartner Reveals Top Predic ons for IT Organiza ons and Users by-2014/ in 2012 and Beyond,” Dec. 1, 2011, h p://www.gartner.com/newsroom/ 71 Afrographique, h p://afrographique.tumblr.com/post/6940611691/ id/1862714 infographic-depic ng-the-market-share-of-various 75 US-based TXTEAGLE, launched in Kenya in 2009, offers microtasks that 72 Techcrunch, h p://m.techcrunch.com/2011/09/12/verious-launches-first can be performed on any simple mobile phone via SMS and pays the work- marketpla`ce-for-mobile-app-components/ ers via their phones either in air me minutes or in cash. 73 Gartner, “Gartner Highlights Key Predic ons for IT Organiza ons and 76 E.g., Mechanical Turk (Amazon) , freelancer.com, oDesk and fiverr.com Users in 2010 and Beyond,” Jan. 13, 2010, h p://www.gartner.com/ 77 NASSCOM, h p://www.nasscom.in/Nasscom/templates/NormalPage newsroom/id/1278413 .aspx?id=59649 13 Current status of the IT- Box 4: IT-based services in Kenya based services sector in Kenya is emerging as a viable player in the field largely Ethiopia due to an abundant English speaking popula on, cheaper connec vity enabled by fiber cables, and A quick diagnostic of the IT-based services sector in dis nct cost advantages of 60–70% compared to Ethiopia has been conducted leveraging the frame- delivery loca ons like Ireland and 30–40% compared work for the Location Readiness Index (LRI), a tool to African compe tor South Africa. Kenya’s ICT developed by the World Bank in partnership with McK- Board, under the Ministry of Informa on and insey & Co.78 The LRI is designed to aid a deep dive Communica ons, has been effec ve in coordina ng assessment of potential locations for IT-based services a roadmap for IT-based services including BPO, in and helps identify existing gaps and weaknesses and partnerships with the private sector and industry allows policymakers to prioritize those areas that organiza ons such as Kenya BPO and Contact Center show a wider gap, increasing the overall location at- Society (KBPOCCS). A Center of Excellence (COE) for tractiveness. The figure below presents the six cri- IT-based services/BPO is currently being established teria evaluated for the LRI assessment, which are: for skills development in close collabora on with the talent pool, cost, quality of infrastructure, key risks, industry. The ICT entrepreneurship scene in Kenya is environment, and sector maturity. also vibrant and innova ve with the newly established iHub being Nairobi’s Technology Innova on Hub. A simplified assessment was conducted for Ethiopia in comparison with India (global leader) and Kenya Source: NASSCOM, World Bank. (emerging destination in Africa—see Box 1) as a way to benchmark Ethiopia’s position in terms of readiness as an outsourcing destination. India had ranked first in the A.T. Kearney Global Services Location Index since its inception while Kenya and Ethiopia have yet to find FIGURE 2: Loca on Readiness Index (LRI) framework mention in the index. The diagnostic suggests that Ethiopia shows relative competitiveness in terms of cost structure (excluding 7DOHQW3RRO telecom costs) and has potential for establishing a large and scalable talent pool given its large population. Ad- ditionally, Ethiopia offers outstanding accessibility to the main international markets (e.g., US, UK) where 6HFXULW\ &RVW the services will most likely be delivered, which is one 0DWXULW\ of the critical factors for firms in making offshoring de- cisions. However, the country still lacks a competitive skills base that meets industry demands, and there is a critical need to take decisive steps to overturn nega- tive perceptions and concerns regarding the country’s macroeconomic stability, and improve business envi- ronments that are currently perceived as relatively un- (QYLURQPHQW 4XDOLW\RI friendly to foreign investors.79 Improving overall infra- ,QIUDVWUXFWXUH structure including availability and reliability of power supply, and achieving affordable access to high-speed broadband is also critical for becoming an attractive .H\5LVNV 79 Restric ve policies for impor ng goods and services, which require all importers to be channeled through Ethiopian na onals who are registered 14 with the government as official distribu on agents, may also be perceived as possible bo lenecks for foreign investors (that do not have strong lo- 78 Loca on Readiness Index (LRI) Toolkit, infoDev website, h p://www cal partners) in impor ng technology-related items to operate their .infodev.org/en/Publica on.986.html businesses. TABLE 4: Educa on demographics India Kenya Ethiopia Popula on 1,236.7 million 43.2 million 91.7 million Literacy rate 63% 87% 39% Ranking for “Higher Educa on and Training” (GCR) 91st 103rd 137th Number of University Graduates (approx. annual) 3,000,000 66,000 70,000 Number of Graduates in Science and Technology Fields (annual) or 480,000 10,000 21,000 in Services related disciplines Source: Global Compe veness Report 2013–14, World Development Indicators, Sourcingline (India), Ministry of Educa on (Ethiopia), Kenya Vision 2030. outsourcing/offshoring destination and for fostering also been proactively taking measures to mainstream growth of the local ICT industry. ICT in the education system. For instance, the “ICT in Education Implementation Strategy” forms one of the i. Talent pool strategic pillars of the ICT for Development 2010 plan. Together with the existence of a competitive tele- Despite these commitments, it is evident that Ethio- communications market, the availability of a skilled pia still lacks a competitive talent pool required to talent pool is the single most important factor in the sustain a local IT-based industry. Quality of educa- growth of an IT-based services industry. The talent tion and language remain a constraint. The official pool pillar of the LRI examines the availability of uni- language of instruction in higher learning is English, versity graduates that may be of interest to IT-based however, according to research, “most of the stu- services firms including generalists, engineers, and dents who join higher education institutions lack ba- business specialists. sic communication skills in general, and the ability to use English as instructional medium in particular.”85 Ethiopia has a population of 91.7 million with a lit- Improving the quality and relevance of higher edu- eracy rate of 39%, which is among the lowest in the cation institutions is included in the GTP which aims world.80 The Global Competitiveness Report 2013–2014 to enhance the quality and availability of skills de- ranks Ethiopia 137th out of 148 economies for the pil- manded by the economy and the national labor mar- lar “higher education and training”, which measures ket. However, it is evident that targeted efforts are secondary and tertiary enrollment rates as well as the needed for creating a competitive talent pool as a quality of education.81 Currently, there are 34 public prerequisite for Ethiopia to become an attractive des- universities in Ethiopia. There are also a number of tination for the global outsourcing industry. private higher education institutions, which account for around 20% of total enrollment in higher educa- ii. Cost tion. The country’s gross enrollment rate (GER) in the tertiary sector is 8% (2011), matching that for Sub- The cost pillar of the LRI takes into account the la- Saharan Africa.82 bor cost per full-time worker doing a particular job needed to keep an IT-based services firm running. The Ministry of Education’s 70:30 strategy introduced It also looks into costs for office space and financial in 2010 aims to shift the vast majority of students to incentives offered to companies to decrease costs, science and technology by 2014/15 and presents a which could make investments in the local industry promising opportunity for Ethiopia to enhance its tal- more compelling. ent pool for IT-based services83,84 The government has Ethiopia is fairly competitive in terms of labor and real 80 World Development Indicators, World Bank. estate costs, especially compared to countries like In- 81 See h p://www.universityworldnews.com/ar cle.php?story= dia where firms are challenged by increasing costs. 20121121172656320. However, high telecommunications costs continue to 82 World Development Indicators, World Bank. 83 Ministry of Educa on of Ethiopia, “Educa on Sector Development Pro- gram IV 2010/2011–2014/2015”, August 2010. 15 84 Un l 2008/2009, only 41% of students pursued science and technol- 85 Haileleul Zeleke Woldemariam, “The Adequacy of Quality Assurance ogy disciplines, while the remaining 59% were enrolled in the arts and Policies of the Ethiopian Higher Educa on”, World Bank, November 2010. humani es. Page 35. TABLE 5: IT costs India Kenya Ethiopia Labor Cost (per month/FTE/USD) BPO Worker $420 $200–30086 $200 IT Services $750 $300–400 $350 Corporate Tax (%) 32.45% 30% 30% Office Space (USD per square meters) $360 87 $10–12 88 $25–50 Incen ves (infrastructure support, IT parks) Over 20 IT parks across the IT park IT park underway na on operated by STPI underway (Malili (Addis Ababa) Ranch) Fixed Broadband Internet Sub-basket (US$ per $6.1 $37.8 $294.5 month)89 Source: LRI 2008, Sourcingline (India), KPMG (India and Kenya),90 KPMG (Ethiopia),91 The Li le Databook on ICT 2013, Informal Interview (Ethiopia) hinder the country’s cost competitiveness for the sec- iii. Quality of infrastructure tor.92 For example, informal interviews confirm that broadband costs around ETB 1846 (about US$110) per The quality of infrastructure is included in the LRI month for only 128 kb. The cost is about ETB 12,000 assessment by analyzing the availability, quality and (about US$700) per month for 8 megabytes, which reliability of telecommunications, power supply, and usually provides efficiency of only 2 or 3 megabytes. transportation. The EVDO93—which was recently introduced—costs about US$17.50 for 1 Gb, US$29 for 2 Gb and US$41 The quality of infrastructure remains a challenge for for a 3 Gb capacity with overuse charged additional. Ethiopia. Coverage of ICT services in Ethiopia is one All uses (less on the EVDO) are slow and disruption- of the lowest in Africa and is significantly lower com- prone. The Addis Ababa ICT park—being constructed pared to countries like India. India ranks 68th in ITU’s on the outskirts of the capital—is expected to offer Networked Readiness Index 2013 while Kenya ranks lower cost office space and telecom services. How- 92nd and Ethiopia 128th.94 Fixed broadband penetra- ever, there are critical needs to increase access to tion remains in its infancy at around 0.04% with the affordable telecom services across all sectors of the sector remaining a monopoly of state-run Ethio Tele- economy. com. Mobile penetration at 24% (2012) remains sig- nificantly below the regional average of Sub-Saharan Africa of 53%. 86 Kenya Entrepreneur, h p://www.kenyanentrepreneur.com/wp-content/ uploads/2009/07/kencall1.pdf 87 Es mate of US$34 per square foot in Bangalore has been converted to square The frequency of power and network outages is also meters. Sourcing line, h p://www.sourcingline.com/outsourcing-loca on/ a major concern for firms that strive to meet their india. commitments to clients. Furthermore, Ethiopia ranks 88 Business Daily, July 2009, h p://www.businessdailyafrica.com/Opinion 124th for the “Infrastructure” pillar of the Global %20&%20Analysis/-/539548/617302/-/u1mws6z/-/index.html 89 Fixed broadband Internet access tariff is the lowest sampled cost per 100 Competitiveness Report 2013–2014, which in addition kilobits a second per month and is calculated from low- and high-speed to communications infrastructure takes into account monthly service charges. Monthly charges do not include installa on fees the readiness of transport such as quality roads, rail- or modem rentals. ways, ports, and air transport. The government with 90 KPMG, Corporate and Indirect Tax Survey 2012, h p://www.kpmg.com/ support from the World Bank and other partners has Global/en/IssuesAndInsights/Ar clesPublica ons/Documents/corporate- indirect-tax-survey.pdf been taking active measures to improve road readiness 91 KPMG, Ethiopia Fiscal Guide 2012/2013, h p://www.kpmg.com/Africa/ through the Road Sector Development Program (RSDP en/KPMG-in-Africa/Documents/MC9197_Fiscal%20Guide_Ethiopia.pdf 1997–2007)95 and continues its commitment in the 92 Since this ini al assessment was conducted in 2011, broadband inter- Growth and Transformation Plan, which aims to expand net tariffs have decreased significantly in Ethiopia. However, this does not affect the overall analysis of Ethiopia’s loca on readiness for IT-based 16 services. 94 World Economic Forum, h p://www3.weforum.org/docs/WEF_GITR_ 93 Evolu on-Data Op mized (EVDO) is a telecommunica ons standard for Report_2013.pdf. the wireless transmission of data through radio signals, typically for broad- 95 The project has constructed or rehabilitated more than 75,000 kilome- band Internet access. ters of road, including rural access roads. TABLE 6: Quality of infrastructure India Kenya Ethiopia GCR Infrastructure Ranking 85th 102nd 124th ITU Networked Readiness Index 68th 93nd 128th Telephone lines (per 100 people) 2 1 1 Mobile cellular subscrip ons (per 100 people) 69 72 24 Fixed broadband internet subscribers (per 100 people) 1.14 0.10 0.04 Up me of end-to-end network (%) 99.6% 97.2% 80% Annual Average Power Outage (days) 2.5 83.6 9696 Source: World Development Indicators (World Bank), LRI 2008, ITU Networked Readiness Index 2013, Global Compe veness Report 2013–2014, Interview (Ethiopia) basic infrastructure with an overarching goal to devel- of major infectious diseases, including typhoid fever op four industrial cluster zones. The government also and malaria. The high prevalence of HIV also remains has plans to quadruple power generation from 2,000 to a concern. In terms of safety, the crime rate in Ethio- 8,000 megawatts through construction of as many as pia is relatively low compared to industrialized coun- nine hydropower plants and is expected to drastically tries. For example, the number of rapes per 100,000 improve the intermittent power supply.97 people was 1.12 (2000 data) in Ethiopia while rates in the US reached 26.6 (2011 data). However, the mur- iv. Environment der rate stands much higher compared to countries like India and Kenya. The environment pillar of the LRI analyzes the busi- ness and living environment in a country and includes v. Key risks areas such as overall business environment; quality of life; and accessibility to the main markets where The country risk pillar of the LRI looks into the coun- services are expected to be delivered. try’s regulatory environment; macroeconomic stabil- ity; and adequacy of a country’s intellectual property. Addis Ababa is the headquarters of both the African Union and the United Nations Economic Commission It should be emphasized that country risk is often dif- for Africa and has a significant presence of an interna- ficult to assess and may change over a short period. tional community that enjoys a relatively stable living According to the Country Policy and Institutional As- environment. sessment (CPIA), Ethiopia’s business regulatory envi- ronment currently rates on par with India and Kenya. Ethiopia’s advantage lies in the reliable access from Further, Ethiopia performs better than Kenya in tack- outsourcing origins with international flights that link ling corruption and protecting intellectual property to over 45 cities on four continents (12 in Africa, 12 rights. When we look at macroeconomic stability, in Asia, five in Europe and two in North America).98 Ethiopia scores better compared to India and Kenya. The national airline (Ethiopia Airlines) provides direct However, it is worthwhile noting that double-digit in- flights on a daily basis from the UK. Accessibility is an flation, which started in 2008 with some indication of important factor and can help position Ethiopia as an easing down in 2010 and back to double digits in 2011, attractive location for multinational firms. has been causing concern about the country’s mac- roeconomic vulnerability to external shocks. Further, However, health and safety remains a concern for for- the shortage of foreign exchange and the country’s eign investors. For example, Ethiopia has a high risk high dependency on foreign aid and loans to finance imports has led to a negative balance of payments (recorded–783057307 in 2011, BoP, US$).99 These fac- 96 Addis Fortune, h p://www.addisfortune.com/Vol%209%20No%20443 tors suggest that the latest CPIA ratings for macro- %20Archive/agenda.htm economic management fail to accurately reflect the 97 Growth and Transforma on Plan at-a-glance, h p://photos.state.gov/ current realities of Ethiopia. 17 libraries/ethiopia/427391/PDF%20files/GTP%20At-A-Glance.pdf. 98 Government of Ethiopia, h p://www.ethiopianembassy.org/PDF/10 ReasonstoInvestCombo.pdf. 99 World Development Indicators, World Bank. TABLE 7: Environment India Kenya Ethiopia Ease of Doing Business (2013) 134th 129th 125th EIU Where-to-be-Born Index (2013) 67th Not available Not available Number of murders per 100,000 people 3.4 (2008) 3.7 (2008) 25.5 (2008) Number of rapes per 100,000 people 1.8 (2010) 2.3 (2010) 1.12 (2000) HIV/AIDS adult prevalence rates 0.3% 6.1% 1.3%100 Flights from Ethiopia from UK or US 1 stop (13–20hrs) / daily 1 stop (15–20hrs) Direct (8hrs) / daily (UK); (UK); 1–2 stops (20–30hrs) / daily (UK); 1 stop 1 stop (18–20hrs) / daily / daily (US) (18–30hrs) / daily (US) (US) Source: LRI 2008, UN Office on Drugs and Crime (2004–2008), EIU Where-to-be-Born Index (2013), IFC Doing Business Report 2013 TABLE 8: Risk ra ngs of doing business TABLE 9: Sector maturity India Kenya Ethiopia India Kenya Ethiopia Business regulatory 3 3.5 3.5 ICT service 61.5% N/A 6.0%101 environment ra ng exports (% of (1=low to 6=high) total service Macroeconomic 4.5 4.5 3 exports) management ra ng Employees 4.5% 0.27% 0.05%102 (1=low to 6=high) in IT-based Corrup on Percep ons Index 93rd 136th 111th services as 2013 % of total employees Intellectual Property 71st 86th 85th in non- Protec on Ranking agriculture Source: World Bank Data (CPIA), Global Compe veness Report 2013, Transparency Interna onal Presence Yes Yes Yes (ICT-ET) of IT-based (NASSCOM) (KBPOCCS103) services/ BPO industry associa on vi. IT-based services sector maturity Source: World Development Indicators, LRI 2008 The maturity of industry index of the LRI describes how well developed the country’s IT-based services industry already are, and whether there is an ac- services. Some notable firms include Offshoring 2.0, tive business association to promote the industry to which is an IT and outsourcing firm run by a Chica- investors. go-based firm (eVentive LLC). Techno Brain, head- quartered in Dar es Salaam, Tanzania, also started The Ethiopian IT-based services sector is small and its IT-based services/BPO operation in Ethiopia in no reliable statistics are available on the number 2009. There are arguably around 4,000 people that of companies and employees. ICT service exports are employed in the IT-based services sector which at 5.3% of total service exports remain significantly constitute less than 0.1% of the total employees in lower compared to countries India (53.1%) and Kenya non-agriculture. ICT-ET was established in 2010 as (14.5%). According to informal interviews, there may the industry association for ICT. be around 200 companies specialized in IT-based 18 101 World Development Indicators, World Bank. 102 Calculated by es mated employees in IT/ITES (4,000) / (total labor force (2009)*0.2(non-agriculture labor force) 100 UNAIDS, 2013. 103 Kenya BPO and Contact Society Possible strategies for • South Africa’s Department of Trade and Industry published in 2009 a strategy for developing the developing an IT-based BPO sector in South Africa. services Industry in Ethiopia Given the fierce competition in the global market for IT- based services, it may be a better strategy for Ethiopia Ethiopia is a newcomer in the IT-based services space. to initially leverage its domestic sector, build local ca- Consequently, it may need to adopt innovative strate- pacity, and then launch into aggressive global marketing gies to break into the league of leading destinations. strategies. The strategy could start by incorporating ac- Possible strategies for Ethiopia can be developed tion plans leveraging the opportunities presented in the around the areas of: policy, incentives and institutional tourism sector and the emerging trend of microwork. frameworks; access to finance; enabling business en- vironment; infrastructure; and skills development. In the tourism industry, use of ICT has been noted to be critical for the propensity of both business travel a. Policies, incentives, institutions, and industry and leisure tourism, particularly in terms of marketing, associations promotion, and bookings. Improvement in this regard in Ethiopia could further improve the country’s ability Building the right policies, investment incentives, to achieve competitiveness in the tourism sector and and institutional forms, are an important foundation foster the development of the ICT industry itself. for IT-based services industry development and have been critical to success for many countries. Below is Microwork, on the other hand, can offer employment a suggested list of action that could be taken by the and training opportunities to people with basic levels Government of Ethiopia. of literacy and familiarity with ICT. The availability of microwork services could potentially trigger demand Revise NaƟonal ICT Policy or develop a targeted from targeted sectors of the economy (e.g., tourism, strategy for developing a local IT-based services industry), new and niche businesses (e.g., media and and BPO industry entertainment) and the public sector (e-services, dig- itization of data) in similar ways to the development of “traditional” BPO services. Developing a strategy for IT-BPO, possibly anchored by the MCIT, will help Ethiopia assess and prioritize Establish adequate legal and regulatory frame- action items required for developing a local IT-BPO in- works for developing the IT-BPO sector and for dustry that will be aligned with national development implemenƟng innovaƟve microwork programs goals, including the GTP and National ICT for Develop- ment (ICT4D) action plan. A number of countries have been embarking on developing similar strategies for Despite its promising opportunities, microwork may also developing their IT-BPO sector. For example: raise issues concerning possible negative effects, for example, low levels of pay, work ethics, and working • The Kenya ICT Board developed a strategy for conditions. Therefore, it would be important to assess Kenya’s emerging BPO sector that aims to create legal and regulatory implications for approaching this 80,000 new jobs (20,000 direct and 60,000 indi- new business model. Reviewing and establishing legal rect) by 2015.104 frameworks such as the enforcement of adequate intel- • China’s “1,000-100-10 project” aims to double lectual property rights106, data privacy107 and cybercrime China’s service exports by establishing 10 cities will also be important for developing the IT-BPO sector. as outsourcing bases, attracting 100 international companies, and assisting in developing 1,000 106 The Ethiopian Intellectual Property Office established in 2003 to provide outsourcing vendors that can meet international legal protec on for intellectual property (IP) rights. demand.105 107 In 2001, a na onal taskforce coordinated by the Na onal Computer and Informa on Center of the Ethiopian Science and Technology Commission, 104 Monitor, h p://www.monitor.com/Portals/0/MonitorContent/imported/ ini ated Data Disaster Preven on and Recovery Management (DDPRM). MonitorUnitedStates/Ar cles/PDFs/Monitor_Job_Crea on_Through_ This was a program created to protect data stored, processed, and trans- Building_the_Field_of_Impact_Sourcing_6_16_11.pdf. mi ed through computer systems and clearly needs to be updated to 19 105 KPMG, April 2009, h p://www.kpmg.com.cn/en/about/KPMG_ reflect a more generalized informa on security system. See h p://www news/2009/090429_outsourcing.html?TopMenuOn=4&Le MenuOn=5& .newsdire.com/lawandorder/print:page,1,1048-ethiopia-to-adopt-cyber NoChinese=0 law-to-protect-financial-ins tu ons.html Recent reforms by the government to encourage for- Strengthen the ICT industry associaƟon (ICT-ET) by eign investment have eliminated most of the discrimi- leveraging internaƟonal “good” pracƟces—such as natory tax, credit, licensing, and foreign trade treat- NASSCOM in India and IBPAP in the Philippines ment of the private sector.110 For example, significant income tax exemptions are now available for inves- tors engaged in manufacturing, agro-industry, ICT or Lessons from countries like India and the Philippines agriculture.111 However, research suggests that Ethio- show that a strong industry association is central to pia has minimal incentives—fiscal or otherwise—for in- the industry’s success. For example, NASSCOM in India vestment by the private sector.112 For example, there and IBPAP108 in the Philippines have provided strategic are sectors that are still closed to foreign investors direction to the country’s IT-BPO sector and have acted (e.g., postal, banking, broadcasting, transport) and as the unified voice to negotiate favorable policies general limitations remain such as the US$100,000 with the government. minimum capital required for foreign investors (that are not partnering with domestic investors). In India, NASSCOM has played a key role in building and strengthening the brand image of India as a premier Therefore, it is advised that the Government of Ethio- outsourcing destination through the implementation pia implement targeted incentives to support startups of programs such as NIESA (NASSCOM’s India-Europe in forms of grants, tax holidays (corporate income tax Software Alliance) and NINJSA (NASSCOM’s India- is currently 30%), and infrastructure support. Incen- Japan Software Alliance); signing trade contracts with tives given by the government should evolve with the countries (e.g., Ireland, Israel, and Mexico) to expand industry’s growth. In this context, it is advised that the geographic reach of Indian firms; and has started the government’s role shift towards providing en- an assessment and certification framework called the abling infrastructure and business support services at “NASSCOM Assessment of Competence” to ensure a subsidized rates (e.g., ICT parks as Special Economic steady supply of quality talent pool. Zones) rather than focusing solely on creating direct incentives. In the Philippines, IBPAP has played a leading role in promoting the BPO industry by developing a blueprint b. Access to finance underlining specific action items for developing the industry. This includes tools to help both investors and According to studies, access to finance is one of the local governments assess readiness and develop work- key constraints for SMEs and companies that are look- ing capacities and programs on industry specific train- ing to launch or expand. In Ethiopia, while credit is ing and career awareness. IBPAP has also advocated available to investors on market terms, a 100% col- for the BPO sector, for example, for passing a house lateral requirement limits the ability of investors to bill known as the Data Protection Act.109 take advantage of business opportunities. In addition, the National Bank of Ethiopia (NBE) currently does not Similar associations are emerging in Africa such as the allow commercial banks to lend above their current Outsourcing Development Initiative of Nigeria (ODIN), limits due to inflationary concerns. To address this Ghana Association of Software Companies (GASS- challenge, Ethiopia may start by assessing the possi- COM), and the Kenya Business Process Outsourcing bility of establishing a government led venture capital Society (KBPOS) and, though still young as an institu- fund to assist local SMEs and startups and by leverag- tion, have been playing a crucial role in bootstrapping ing mobile money services as a tool for increasing ac- the nascent IT and BPO sectors. It would be important cess to finance. to learn from existing practices and adopt areas that could be applicable to the context of Ethiopia. Establish government-led venture capital funds to help finance ICT SMEs and startups Strengthen incenƟves for aƩracƟng foreign inves- tors including tax incenƟves, training subsidies, and infrastructure and business support services 110 US Department of State, “2011 Investment Climate Statement–Ethio- pia,” March 2011, h p://www.state.gov/e/eeb/rls/othr/ics/2011/157275 20 108 Informa on Technology Business Process Associa on of the Philippines .htm. (IBPAP) 111 Ethiopia Investment Agency website, h p://www.ethioinvest.org. 109 Goswami, A.G., Ma oo A., and Saez, S. ExporƟng Services: A Developing 112 “Africa’s Poten al in IT Enabled Services: Crea ng opportuni es for jobs Country PerspecƟve, World Bank, 2011, 17. and growth”, AFTEW, World Bank, 2014. A number of countries have established venture capi- (bank penetration in Ethiopia is a mere 14%115), and tal funds to compensate for the lack of well-developed missing markets for remittance-linked financial prod- capital markets under the strong leadership of the ucts. Building a competitive market for mobile money government, for example, Israel and Mexico. It may could help reduce transaction costs, improve financial be worthwhile to conduct a South-South learning and inclusion, and significantly scale-up access to finan- knowledge exchange study tour as a tool to assess how cial services by SMEs and entrepreneurs. these types of funds can be implemented in the legal and regulatory contexts of Ethiopia. Though the opportunity presented by mobile money services is tremendous, there is a critical need to re- In Israel, the Ministry of Industry and Trade is the view legal and regulatory frameworks as the virtual main government body in charge of innovation policy environment of m-services makes it more difficult to and has made direct investments in technology start- determine who the contracting parties are and whether ups under the “Yozma” program. The Yozma program that operator is complying with relevant legal and has been one of the main the drivers of the venture regulatory obligations. For example, in Tanzania, a capital sector in Israel and has contributed to the new law to regulate mobile banking is in the pipeline growth of the ICT sector that grew at an average rate as part of efforts by the government to enhance com- of 16% per year in the 1990s. In Mexico, the AVANCE pliance in the business. Further, mobile money services program started in 2003 and is led by the National in Tanzania are regulated by two institutions: the Council for Science and Technology (CONACyT) to sup- Bank of Tanzania, observing financial transactions; port innovative SMEs. The Entrepreneurs Fund under and the Tanzania Communications Regulatory Author- the program offers complementary resources in the ity, monitoring mobile phone operations.116 According form of risk capital, and the Guarantee Fund endorses to reports, electronic payments are not currently cov- firms so they can obtain commercial bank loans. Be- ered in the Ethiopian legal system and mobile phone tween 2003 and 2007 the Entrepreneurs Fund funded service remains a government-run monopoly. The 23 firms with US$10 million and the Guarantee Fund report suggests that a study is underway to develop gave five endorsements.113 a legal and regulatory framework for electronic pay- ments (including mobile services) in Ethiopia.117 How- ever, the progress of this study is unknown. Review legal and regulatory frameworks and de- velop a strategy for fostering mobile money ser- c. Processes and procedures vices, which can be a key enabler for improving ac- cess to finance A World Bank study suggests that business registra- tion in Ethiopia has improved dramatically since the first survey was conducted in 2001. However, there Mobile money transfer services have been a tremen- are still areas that require significant reforms, par- dous success in Kenya with the introduction of M-PESA ticularly for registering foreign businesses. Below is a in 2003, which is now used by 30% of the total Ke- suggested action that could be taken by the Govern- nyan population and transfers US$400 million each ment of Ethiopia. month.114 Mobile money services will allow entrepre- neurs to access financial services (banks, MFIs) in a secure and convenient manner. They could also help Simplify processes and establish a one-stop shop, facilitate the inflow of remittances from the Ethio- including development of an e-services portal, for pia diaspora community scattered across the world. foreign business startups Despite the large remittance inflows to Ethiopia (estimates reach as high as US$3.2 billion in 2010), the remittance market remains underdeveloped due The Ethiopian Investment Agency (EIA) has made sig- to low levels of competition which have led to high nificant reforms to simplify procedures for business transaction costs, low levels of financial inclusion 115 Neil Daly, May 2010, “Interna onal Remi ance Services Providers: An overview of mobile interna onal remi ance service provider service offer- ings,” h p://mmublog.org/wp-content/files_mf/gsmaremi anceservice providerwhitepaper1.pdf 21 113 OECD, SMEs, entrepreneurship and innovaƟon, 2010. 116 See h p://allafrica.com/stories/201102240932.html. 114 Upsides, March 2011, h p://www.upsides.nl/images/issue-14/Up 117 Getahun Nana, Na onal Bank of Ethiopia, Policy IniƟaƟves for improved sides_14.pdf financial service provision: the case of Ethiopia, July 2008. registration and acts as the one-stop shop for all results in a 1.38% increase in GDP growth. Further- investors in Ethiopia. Currently, Ethiopia stands at more, firms that use ICT grow faster, invest more and 125th out of 189 economies in the ease of starting are more productive and profitable, with sales growth a business, performing better compared to neighbor- and profitability reaching 3.4 and 5.1 percentage ing economies such as Kenya (129th), and Uganda points higher, respectively, compared to firms that do (132rd). According to research, the time and cost of not us ICT.121 business registration has been reduced from 46 days and $580 in 2002 to 15 days and $410 in 2012.118 The GTP recognizes the importance of improving con- nectivity as one of the strategic directions for ensur- However, the pace of reform has not been sustained ing ICT-assisted growth. International connectivity is and there are still significant bureaucratic burdens set to receive a major boost as a result of Ethiopia that exist, particularly for foreign business startups.119 being linked to 15 east and southern African states In addition to the procedures required for domestic via the East African Submarine System (EASSy). Ethio- companies, the parent company must authenticate its pia has also benefited from the launch of the SEACOM documents abroad and submit an investment project undersea cable, which links East Africa and India to proposal to the EIA to obtain investment approval. Europe, and was commissioned for operation in July The firm must also obtain a trade license if it wants 2009.122 to engage in international trade. In addition, foreign investors must have their investment capital inflow, However, the telecom sector is still under a state- external loans, and suppliers’ or foreign partners’ owned monopoly and currently Ethio Telecom pro- credits registered with the National Bank of Ethiopia vides ICT services at prices far beyond the reach of (NBE). Lastly, firms that wish to open a foreign cur- the population at large. It is important for the Gov- rency bank account must obtain approval from the ernment of Ethiopia to consider gradual liberalization National Bank of Ethiopia, which can take weeks to measures and/or structure effective public-private process.120 Removing these obstacles by providing a partnerships to expand access to affordable and reli- one-stop shop for foreign investors, including devel- able broadband networks across the economy and to opment of an integrated e-services portal, will par- the general population. ticularly benefit foreign SMEs that have less capacity to process these bureaucratic procedures. Further promote development of ICT parks for housing and incubaƟng IT-BPO companies and d. Infrastructure startups Evidence suggests that targeted and general in- frastructure growth has accompanied the rise of The Addis Ababa ICT Park presents a promising oppor- countries as an outsourcing destination for IT-based services. As with any sector of the economy, the de- tunity to increase access to reliable and affordable velopment of the IT-based services industry would de- infrastructure and business support services, particu- pend on a robust infrastructure. Below is a suggested larly for SMEs and startups. However, it may also be list of actions that could be taken by the Government worthwhile to leverage the concept of “South-South of Ethiopia. learning” to explore applicability of innovative solu- tions that have been implemented in other countries. Accelerate rollout of high-speed broadband in- For example, Software Technology Parks of India frastructure to aƩract foreign firms and support (STPI), an autonomous society under the Ministry of business innovaƟon and producƟvity across the Communications and Information Technology, has economy played a seminal role in establishing over 20 technol- ogy parks throughout India and has been a catalyst in the growth of the local IT industry by providing a wide A World Bank study suggests that an increase of 10% range of services including: high speed broadband in broadband penetration in a developing country connectivity, single window clearance to software 22 118 Doing Business Report 2013. 121 World Bank, 2006, “Informa on and Communica ons for Development: 119 Ethiopia ICA Project, 2009. Global Trends and Policies.” 120 See h p://www.afribiz.info/content star ng-a-foreign-business-in-ethiopia. 122 Telegeography GlobalComms Database, Ethiopia. exporters, incubation facilities, datacenters, and con- capacity building opportunities among the poor and sultancy services. Other countries like Egypt (Smart unskilled. This could be done with a preliminary focus Villages), Nigeria (Abuja Technology Village), Tanza- on providing microwork services to the public sector. nia (Rhapta City), and Kenya (Malili Ranch) are also A possible program that could be implemented is pre- establishing ICT parks that could help attract foreign sented below. investment and foster growth of a local IT-based ser- vices industry. Ethiopia may wish to learn from these Replicate the “Impact Sourcing” model of Kenya international practices for developing targeted ICT by addressing increasing demands for the digiƟza- parks that could help stimulate the development a local ICT industry. This would all be carried out in line Ɵon of government records with government policy on economic zones. Ethiopia may wish to start with digitization efforts e. Skills development that will allow the government to simplify record fil- ing processes, and improve access to information and The LRI assessment suggests that in the case of Ethio- delivery of public services. The program could lever- pia, one of the main and serious gaps for developing age use of the 65 community ICT centers that have the IT-based services industry is availability of quality talent pool. A World Bank study123 concluded that lack been operationalized by the ICTAD Project across the of skills was a key constraint for developing countries country. This non-voice approach may be useful as ICT to realize potential opportunities in IT-based services. services (telephone, mobile, and Internet) penetra- This led to a series of initiatives that were taken up tion in the country is extremely low and it may take under the World Bank’s New Economy Skills in Africa some time to build necessary infrastructure before Program (NESAP-ICT) including in Nigeria, Ghana, Ke- launching other activities. It will also help address nya, and Tanzania. Development of skills and local ca- the issue of youth unemployment in Ethiopia, which pacity can be one of the key areas of intervention for stands at 25% (2006 data) of the total population be- Ethiopia to compete in the global economy. tween 15 and 24.124 The skills development program could consist of com- Consider a four-pronged program proposed for ponents such as basic computer and mobile literacy, developing skills aimed at the IT-BPO sector in language and transcription skills, and language skills. Ethiopia. This four-pronged approach could target: For a quick win to launch these programs, Ethiopia could consider partnering with organizations such as 1. DIGITAL PARTICIPATION Skills: Focused on Digital Divide Data and Samasource (impact sourcing crea ng income genera on opportuni es in multiple countries), Jana (rebranded from Txteagle in rural communi es and among the poor/ microwork globally), Ruralshores, and eGramIT (rural unskilled. BPO in India) that have vast experience in these areas 2. CHART Skills (CommunicaƟon, HeurisƟc, and are aware of the skills demand. AnalyƟcal, RelaƟonal, and Technology): Fo- cused on the BPO sector 2. CHART Skills (Communication, Heuristic, Analyti- 3. SMART Skills (SoŌware, Mobile ApplicaƟons, cal, Relational, and Technology) Research and Technology): Focused on the IT The competencies required for the BPO sector (both industry. voice and non-voice) at the foundational level are 4. START Skills (Startup Training through Asso- fungible across sectors. Developing skills for the BPO ciaƟon with Remote Teams): Focused on fos- sector typically begins with an assessment/bench- tering entrepreneurship. marking phase followed by focused training in part- nership with private sector partners and universities. Suggested steps for implementing this program are 1. DIGITAL PARTICIPATION Skills presented below. Ethiopia may wish to start by launching skills devel- opment programs for creating income generation and 23 123 “The Global Opportunity in IT-Based Services “ (World Bank, 2010). 124 World Development Indicators, World Bank that meet industry demands. Suggested strategies for Conduct an iniƟal assessment of BPO foundaƟonal implementing this pillar are presented below. skills, duly benchmarking available skills with the skills and competencies of candidates successfully hired into global BPO companies Learn from programs in other developing coun- tries that have successfully aligned development of IT skills with industry requirements The assessment will help to clearly identify how the talent pool in Ethiopia compares with the competition globally. The tourism sector for example can benefit An interesting approach is the one adopted by Mexico. from IT and BPO skills. Functions like customer ser- As part of a World Bank funded project aimed at de- vice, voice calls, mail, chats, invoicing, cross-selling/ veloping the IT industry, Mexico has established an up-selling, query resolution, web based ticketing, organization called MexicoFirst, which acts a bridge customer profiling, etc., are functions that can ben- organization between the universities and the indus- efit from foundational training in BPO. try.125 MexicoFirst designs training programs for the IT industry and also negotiates with leading industry Typically the assessment is done in the following se- certifications in order to provide these at more af- quence of activities: (i) skills understanding and gaps fordable rates. In Kenya, the Kenya Transparency and analysis, (ii) curriculum design and content develop- Communications Infrastructure Project (KTCIP) funded ment, and (iii) live rollout of the assessment program. by the World Bank has recently finalized the devel- This type of assessment has been successfully rolled opment of an internationally benchmarked ‘Software out in Nigeria. The cost per student is estimated to Developer Certification Program’ in partnership with be around US$15. The progressive cost to run the Carnegie Mellon University that can test the ability of program is estimated at around US$210,000 per year, software developers in Kenya in writing and executing under the assumption that among the approximately high quality code. This program is expected to provide 70,000 annual tertiary graduates, 14,000 (20%) are software developers a vendor neutral certification suitable to work in the BPO sector. that could be used by local and international compa- nies as pre-requisites in making hiring decisions. Prepare a strategy for systemaƟcally developing skills and addressing skill gaps/deficiencies that Partner with universiƟes and private sector in de- could be taken up in close partnership with the veloping targeted programs for developing IT skills private sector The Addis Ababa University (AAU) has trained a num- In this context, a possible model that could be rep- ber of professionals in the areas of computer science licated in Ethiopia is that of the EDUEgypt program and information technology and can potentially an- in Egypt. EDUEgypt runs two programs: (i) the BPO chor this program.126 The National Computer and In- program focuses on enhancing the students’ language formation Centre (NCIC), a semi-autonomous govern- skills, customer service skills, cultural sensitization, ment institution under the overall direction of the PC and data skills; and (ii) the ITO program focuses on Ethiopian Science and Technology Commission, which providing advanced technical training for undergradu- has been responsible for promoting computer technol- ates that would enhance their direct employability. ogy and information systems and services in the coun- The program is designed to train Egyptian trainers try, can also be considered as a partnering institution. and certify them for the BPO stream and involves lead industry players including India’s FirstSource, IBM- 125 MexicoFirst has been set up by three of the leading private sector asso- Daksh (now IBM Global Services), and Infosys BPO. cia ons in Mexico including the Associa on of Mexican IT Industry (AMITI), The EDUEgypt program has been expanded to 10 uni- Na onal Chamber of Electronics, Telecommunica ons and Informa on versities targeting 10,000 students. Technology, (CANIETI) and Na onal Associa on of Computer Educa on Ins tu ons (ANIEI). 3. SMART Skills (Software, Mobile Applications, Re- 126 Also a number of privately-run colleges have started to provide degree, diploma, and postgraduate diploma training in computer science and in- search and Technology) 24 forma on systems. The main ones are Atlanta College, Beza College, Grace College, HiLCoE, Kisama Africa University, Microlink, Royal College and With the advent of rapidly advancing technologies it Unity University. (Survey of ICT and Educa on in Africa: Ethiopia Country has become increasingly important to build IT skills Report. infoDev, 2007) The development of m-labs is also key for developing Recently a number of tech incubators, such as cutting-edge skills for mobile apps development. This Y-Combinator and Tech Stars (US) and Tech Hub (UK), will be discussed further in the subsequent chapter have emerged that not only provide IT startups with “Creating an Open Innovation Ecosystem”. seed funding but also with strategic advice on their business ideas. Ethiopia may wish to consider lever- 4. START Skills (Startup Training through Association aging the four regional business incubators (Mekele, with Remote Teams) Bahirdar, Hawassa, and Adama) established by the ICTAD Project to facilitate linkages between startups Creating a class of ICT entrepreneurs will be impor- in developed countries and local entrepreneurs in tant for Ethiopia to build the IT-based services indus- Ethiopia to help them acquire cutting-edge technol- try bottom up, and create new jobs. However, while ogy, business skills, and international experience in the concept of incubation and business acceleration is the process. The “Creating an Open Innovation Eco- attractive, it is not easy to foster local entrepreneur- system” chapter in this report further addresses how ship in a country like Ethiopia given the various chal- the development of START skills can be implemented lenges in developing entrepreneurial skills and work- in Ethiopia. ing on cutting-edge technologies. A suggested strategy for implementing this pillar is presented below. Collaborate with global venture and incubaƟng firms and link aspiring entrepreneurs in Ethiopia to global startups 25 TABLE 10: Summary of recommenda ons in priority order for fostering development of an IT-based services industry in Ethiopia Area RecommendaƟons a. Laws, policies, regula ons, strategies a.1 Revise Na onal ICT Policy or develop a targeted strategy for developing a local IT-based services and BPO industry. a.2 Establish adequate legal and regulatory frameworks for developing the IT- BPO sector and for implemen ng innova ve microwork programs. b. Ins tu ons, en es, agencies b.1 Strengthen the ICT industry associa on (ICT-ET) by leveraging interna onal “good” prac ces—such as NASSCOM in India and IBPAP in the Philippines. c. Incen ves, promo on c.1 Strengthen incen ves for a rac ng foreign investors including tax incen ves, training subsidies, and infrastructure and business support services. d. Infrastructure, connec vity d.1 Accelerate rollout of high-speed broadband infrastructure to a ract foreign firms and support business innova on and produc vity across the economy. d.2 Further promote development of ICT parks for housing and incuba ng IT- BPO companies and startups. e. Services (enablers) e.1 Review legal and regulatory frameworks and develop a strategy for fostering mobile money services, which can be a key enabler for improving access to finance. f. Skills, training, capacity building Consider a four-pronged program proposed for developing skills aimed at the IT-BPO sector in Ethiopia. 1. DIGITAL PARTICIPATION Skills: Focused on crea ng income genera on opportuni es in rural communi es and among the poor/unskilled. f.1.1 Replicate the “Impact Sourcing” model of Kenya by addressing increasing demands for the digi za on of government records. 2. CHART Skills (Communica on, Heuris c, Analy cal, Rela onal, and Technology): Focused on the BPO sector. f.2.1 Conduct an ini al assessment of BPO founda onal skills, duly benchmarking available skills with the skills and competencies of candidates successfully hired into global BPO companies. f.2.2 Prepare a strategy for systema cally developing skills and addressing skill gaps/deficiencies that could be taken up in close partnership with the private sector. 3. SMART Skills (So ware, Mobile Applica ons, Research and Technology): focused on the IT industry. f.3.1 Learn from programs in other developing countries that have successfully aligned development of IT skills with industry requirements. f.3.2 Partner with universi es and private sector in developing targeted programs for developing IT skills. 4. START Skills (Startup Training through Associa on with Remote Teams): focused on fostering entrepreneurship. f.4.1 Collaborate with global venture and incuba ng firms and link aspiring entrepreneurs in Ethiopia to global startups. g. Processes and Procedures g.1—Simplify processes and establish a one-stop shop for foreign business startups. h. Access to Finance h.1—Establish government-led venture capital funds to help finance ICT SMEs 26 and startups. Enhancing Public Sector Performance with ICT Introduction and Information Technology (MCIT) has undertaken a number of e-Government assignments to make Leveraging ICT in the public sector can potentially government services available online and improve lead to enhancing performance, lowering costs, im- public service delivery to citizens and businesses in proving governance, and enhancing service delivery in Ethiopia. government operations. Citizens and businesses alike benefit from improved public sector management, ef- Currently, Ethiopia’s key challenges with respect to ficient service delivery, better access to information, public service delivery include, among others: and improved interactions between public agencies and civil servants. As such, ICT is a cross-sector en- • Operating in “silos”: Many government entities abler and platform for providing government services are designed and operate services separate from in an effective and responsive manner. It allows for other services, resulting in lack of interoperabil- streamlined interoperability among different public ity among systems, duplication, and extreme in- entities and systems and is a key element in embrac- efficiencies in service delivery; ing a citizen-centric approach: • Limited ICT access: The public has inconsistent access to government services depending upon • On the supply side: ICT strengthens government office locations and rare online availability; capacity to develop and deliver public services to • Paper-based approach: Information is gathered citizens and businesses; through paper forms, which requires inefficient • On the demand side: ICT enables citizens and processing steps, limits auditing and analysis, and businesses to effectively engage with the govern- slows time to deliver; ment, setting in motion powerful mechanisms of • Inconsistent identification: Valid documents for citizen engagement and participation, enabling identification vary across services and are mostly broader social inclusion, and leading towards paper/document based; more advanced public service delivery of govern- • Cash payments: Many fees are paid either in cash ment entities. at the government office or require the submis- sion of a receipt after payment at the national Ethiopia is well positioned to grasp these opportuni- bank, resulting in potential improper activities ties and achieve its key development and economic and inefficient processes. growth goals by streamlining ICT in the public sec- tor. The section below takes stock of the existing ICT In addition, and despite tremendous progress achieved initiatives and, based on evidence from international in the public sector reform in Ethiopia, some “big pic- experience, aims to develop specific and targeted ture” challenges impede its further progress. These suggestions for enhancing public sector performance belong to the areas of: using ICT. 1) ICT connectivity and e-government services delivery Challenges and opportunities 2) ICT capacity gaps, at both demand- and supply- side levels in the public sector in 3) good governance mechanisms Ethiopia 4) citizen feedback to government entities With the mission to develop, deploy, and streamline Each of the challenges above can be addressed in a the use of ICT across sectors to achieve greater de- holistic and programmatic manner, looking at times velopment outcomes, the Ministry of Communication to ICT to provide effective, implementable solutions. 27 1. ICT connectivity and e-government services responsiveness, was designed to improve service de- delivery livery quality. Out of ten community stations planned in woredas, eight are already operational. The Government of Ethiopia has been taking decisive steps towards advancing Ethiopia from a country with • Telecenter network low mobile, Internet, and broadband penetration rates to a highly connected society. Recent public in- Looking forward, the Government of Ethiopia has vestments in the backbone fiber optic infrastructure raised the possibility of a second phase of the ICTAD amount to billions of dollars and should bring soon Project. Among the proposed project activities is the the expected payoffs in terms of quality of service extension of the CIDEV centers, perhaps on a larger and price reduction for Internet, fixed, and mobile scale, in order to provide extensive access to ICT, es- communications. pecially in rural areas. This idea has been endorsed by the PSCAP Project129, another World-Bank funded However, what is lacking at this point is a network of initiative that has been tremendously successful with access points to this powerful infrastructure in order the Government of Ethiopia, and resulted in an at- to enable leveraging of the opportunities presented tempt to establish new centers in the rural communi- by ICT to enhance the performance of public service ties that have been insistently requesting to be con- delivery. nected to the ICT network. Going forward, a more programmatic approach has to be taken where the a. ICT access points Government of Ethiopia, perhaps with participation from the private sector, or the communities them- Currently in Ethiopia, the state-owned Woreda-net selves, could take the outcomes of the ICTAD Proj- connects over 950 woredas and government offices.127 ect to the next level. The benefits of establishing a This terrestrial and satellite-based network has re- nationwide network are potentially transformational. cently been upgraded to provide ICT services such as The newly established telecenter network could be videoconferencing, directory services, mail services, used to provide access not only to basic ICT services voice services, and Internet connectivity to federal, and training130, but also to specialized TVET training regional, and the lowest woreda levels of government for the manufacturing industry. In addition, basic fi- bodies. The Woreda-net is fully operational, but more nancial literacy training, along with the provision of can and should be done to exploit the capabilities of some simple financial products, such as microcredits this network and promote a wider usage among the and farmers’ insurance, could be provided using the population, the private sector, and public agencies. telecenter network. Further, the extended telecenter network could serve as a platform for public service It is therefore high on the government’s agenda to delivery: a new channel for accessing e-services and a leverage the existing ICT infrastructure and build a range of relevant e-government applications. wider network of access points to ICT. In doing so, MCIT aims at building on the success of the World In developing the telecenter network widely across Bank-funded ICTAD Project,128 which facilitated the country, the Government of Ethiopia hopes to the creation of 65 community ICT for Development take one more step towards enabling the communi- (CIDEV) centers. In less than five years, ICTAD achieved cation between the government and its citizens and a significant share of its far-reaching objectives. For businesses. While the model of community involve- instance, 3300 computers were deployed to schools, ment and partnership has proved extremely success- health centers, and community centers, and eLearn- ful, the Government of Ethiopia is also exploring new ing infrastructure has been implemented for training options of scaling up the telecenter network, namely purposes. An independent community radio service, through private sector participation, for instance, in used as a vehicle for promoting awareness and social the postal area, as further detailed below. 127 h p://www.waltainfo.com/index.php/explore/8083-over-950-woredas- 28 offices-benefit-from-woredanet-project- 129 Public Sector Capacity Building Program Support (PSCAP) Project 128 Informa on and Communica on Technology Assisted Development 130 Recent IEG report (2011) reveals that under the ICTAD project 3,283 (ICTAD) Project, signed by the Government of Ethiopia in 2004 as a loan people were trained at CIDEV centers, among whom about thousand of agreement of US25 million with the World Bank (ICT Sector Unit). cer fied trainers (TOT). • Postal network scaled-up network would bring Internet access and an array of information, training, and other e-services to A state-owned enterprise, the Ethiopian Postal Ser- an additional 350,000 people in approximately 600 ru- vice is one of the oldest institutions in Ethiopia, dat- ral and underserved communities. The study recom- ing back to 1894. Until recently, the Ethiopian Postal mended several PPP options for extending the network Service managed a network of 19 zonal offices and and the one chosen by the government was a modified over 700 branch and agent post offices throughout the build-own-operate (BOO) model, to be rolled out in country. The government is considering options for an phases, in which the government would contract with overall transformational approach and modernization a private sector firm to finance, design, build, and of the postal operator. It is clear that the convergence operate telecenters/ICTCBCs in specified locations, of the Post’s physical, electronic, and financial net- and reimburse the operator for capital expenditures work would give the postal sector an unrivaled com- (CAPEX) after a period of successful operation. petitive edge. Analytical evidence supports that the postal entities that have integrated these three di- Because the private sector in Ethiopia is underde- mensions into their operations have achieved remark- veloped, and because telecenters/ICTCBCs are not able success and financial viability.131 typically a high rate-of-return business and have sig- nificant risks, CAPEX financing requirements for the With greater broadband connectivity between post of- scale-up would prove too onerous if not reimbursed by fices nationwide, postal operators are often a primary the government. The total required CAPEX subsidies, partner of governments in their e-government policy; to be disbursed over 10 years, amount to US$31.2 mil- with broadband access to the Internet in post offices, lion. The Bank is currently discussing with the govern- postal networks allow access to a greater number of ment possible funding mechanisms or sources for this citizens in rural and remote areas to e-government amount, including from the government’s resources services. or under new or existing Bank projects. Therefore, in the context of ICT access network ex- b. E-government service delivery tension, the Ethiopian Post is well positioned to be- come a valuable partner for private as well as public In 2011, Ethiopia ranked low on the e-government entities, including the government in the implemen- readiness scales, scoring 172nd, according to the 2010 tation of its e-government strategy and telecenter UN World E-Government Development ranking.132 But network scale-up. With a well-sequenced reform plan that same year, the MCIT released a comprehensive and sufficient resources to transform the postal or- e-government strategy which has a life-cycle ap- ganization into a digital platform of service delivery, proach placing the delivery of services based on key Ethiopian Post has a great role to play in the national events in citizens’ lives (from birth to death). The development over the next few years. Examples of strategy lays out the government’s vision on the de- such successful transformation exist already in coun- velopment of e-services and applications, as well as tries such as Morocco, Brazil, and Azerbaijan. From the deployment of required shared infrastructure, the perspective of extending the telecenter network, standards, and frameworks to enable their delivery. the postal network could be leveraged to provide additional access points to ICT services in rural and Figure 3 illustrates the main e-government strategy remote areas that are not currently covered. Accord- goals, targets, and expected outcomes. ingly, in 2012 MCIT requested the support of the World Bank to conduct a detailed feasibility study to inform • E-services and applications government’s decision on the above options. As part of the new e-government strategy, 219 The Bank carried out the feasibility study on extend- e-services were identified, comprising informational ing the telecenter network in 2013. The study found and transactional services to be implemented over that there was sufficient demand to support at least a five-year period. The strategy envisages service 500–700 additional telecenters (also known as Com- delivery through four channels: online portals, call munity Based ICT Centers or ICTCBCs) to be deployed centers, mobile devices, and common service cen- in the major population centers of all woredas. This ters. The first of these, an Ethiopian e-government 29 ITU/UPU 2010 Report “ICTs, new services and transforma on of the 131 The UN conducts its World E-Government Survey every two years. Ethi- 132 Post”. opia’s ranking remained unchanged in 2012. FIGURE 3: The 2011 E-Government Strategy and Goals “Leverage the potential of ICT to bring the Government closer to the people through effective governance, improved ELEMENTS VISION & service delivery and socio-economic growth” ↓ ↓ ↓ ↓ Goverment closer to people Effective Governance Improved Service Delivery Socio-Economic Growth ↓ ↓ ↓ ↓ s#USTOMERPARTICIPATIONIN s)MPROVEDTURNAROUNDTIME s!LLSERVICESACCESSIBLE s)MPROVEBUSINESSCLIMATE OUTCOMES government policy/ for service within the community s'ROWTHOF)#4 scheme design s*OINEDUP'OVERNMENT s)MPROVEMENTIN#USTOMER entrepreneurship/industry s(IGHAWARENESSREGARDING s#USTOMERFRIENDLYAND Satisfaction all Government Schemes/ Accountable Government Services ↓ ↓ ↓ ↓ s4OP5.E 0ARTICIPATION s)NTEGRATIONOF-INISTRIES s%LECTRONICENABLEMENTOF s!MONGSTTOPIN$OING Index Agencies through common 211 Services "USINESSRANKINGSOF TARGETS 2015 s-ORETHANOF applications, standards and s!LLTHE#HANNELS 7ORLD"ANK Customers aware of the policies established with more s)NVESTMENTOFOF e-Government program sIMPROVEMENTON THANUPTAKE Budget of e-Government s#USTOMER&EEDBACK Government sIMPROVEMENTIN 0ROGRAMTHROUGH000 Mechanism available on Transformational Index Citizen Satisfaction Index all Government Channels (GT1) s0UBLISHED#ITIZEN#HARTER s#APACITYBUILDINGOFALL for all Services officials on IT and Customer behavior ↓ ↓ ↓ ↓ %STABLISHMENTFEEDBACK %STABLISH'OVERANCE )MPLEMENTTHE0RIORITIZED 4RADE'" PORTALFOR mechanism and e-polls structure for implementation 3ERVICE%NABLEMENT0LAN all business related through all electronic of e-Government program through implementation of SERVICESLINKEDTO channels 5. Implementation of common AGENCYPRIORITYPROJECTS .ATIONAL0ORTAL #ONDUCT&EDERALAND 3TANDARDSAND0OLICIES 10. Establishment of mobile )MPLEMENT0UBLIC STRATEGY 2EGIONALLEVEL-ARKETING across Ministries/ gateway 0RIVATE0ARTNERSHIP and Awareness campaign Agencies 11. Increase the reach and through development #ONDUCTANNUAL#USTOMER )MPLEMENTATIONOF#ORE number of services of IT of a common approach Survey 0ROJECTSAND#OMMON community centers and ANDGUIDELINESTO000 Applications Unified Billing Centers #REATIONOF)4#ADREIN 12. Establish and implement Ministries/Agencies Monitoring and 8. Implementation of the %VALUATION&RAMEWORK Capacity Building Strategy Source: PWC report 2011, Ethiopia’s e-government strategy and implementa on plan, publicly available on www.mcit.gov.et, accessed in December, 2013. portal, became operational in 2011 and has gradually agencies, among which is the online business regis- increased its functionalities; it now includes sections tration and licensing, developed by the Ministry of for citizens, government, businesses, foreigners, and Trade and Industry; the online service provided by NGOs; links to most frequently asked services, infor- the Federal Supreme Court; and the online portal to mation, forms, and documents; and links to 15 gov- access exam and student placement results and for ernment portals, including ministries, agencies, and universities, developed by the Ministry of Education. women’s groups. In addition, information portals for Many of these have been launched as mobile appli- all federal and regional government ministries are de- cations and added to a host of other existing public veloping and implementing websites with basic levels services accessible on multiple channels, such as the of public service delivery information according to weather and market information. There are also plans the existing policy of the Government of Ethiopia. to make utility bills accessible online and on mobile devices. Similar efforts have been made by various 30 The development of e-services has been a priority ministries to identify the services that can be rolled for the government. By end-2013, there were over out in phased manner over the five-year implementa- 64 e-services online extracted from 10 ministries and tion period. While the rollout of the 219 e-services should remain a medium- or long-term agenda for the government, Box 5: The 311 system for ci zen response immediate action is required for a short-term priori- in the US tization of e-services, in view of their rapid imple- mentation. When applying the relevant lenses for Back in 2002, New York City was suffering from poor prioritization, it appears that besides the life-cycle interac ons between the local government and design modern approaches such as for example the its inhabitants: the city’s 8 million residents were 311 system, which allows government entities to en- then faced with more than 40 different call centers, gage with citizens in a more responsive manner, could 14 pages of phone numbers, and a host of help lines in be adopted. The example in Box 5 illustrates this order to obtain service from city agencies. As a result approach. of the confusion over where to find informa on, ci zen access to city services was inconsistent and It is a fact that, as of today, Ethiopia lacks a more service delivery was inefficient. programmatic approach to citizen engagement and feedback mechanisms. A recent study on local gover- To address this issue, the new 311 Ci zen Response nance issues in Ethiopia reveals that in kebele offices System provides a single number for residents, there is little automation and limited use of ICTs or businesses, and visitors to ini ate all interac ons phones. Instead, over 90% of respondents stated that with the city. All of the city’s police precincts are they communicated with the kebeles through their networked to the 311 system, and calls, complaints, physical presence.133 and service requests are routed to the appropriate police precinct, allowing police to decide on an Although the e-government strategy draws a quasi- effec ve response more quickly than before. exhaustive list of e-services that are to be developed to fit the life-cycle approach, the example of the 311 Today, NYC 311 handles more than 40,000 calls system reveals the existence of a major discrepancy. daily, making it the largest 311 system in the United When international best practices are examined, it States. Ul mately, the 311 Ci zen Response Center appears that areas in which citizens need govern- provides city officials with a holis c view of citywide ment’s support and service delivery go beyond the opera ons, empowering them to allocate resources basic milestones of a life cycle. more quickly and efficiently to address ci zen needs. Further, the example of the 311 system in New York Building on the success of the NYC enterprise, similar can also be illustrated using the modern analytics systems have been deployed in the ci es of Chicago tools available (Figure 4) revealing major categories and San Francisco, and the number of deployments of citizen feedback and areas of support needed, is expanding. along with information on volumes and time of the day when public services are contacted. Source: The World Bank, Open Development Technology Alliance (ODTA); Oracle’s Solu ons for Smart Ci es: Delivering 21st Century Services, 2011. While citizen needs may vary in nature and scale from one country to another, new high-performance tools are now available everywhere and it is important for the Government of Ethiopia to seize the game- Therefore, going forward, the design and implemen- changing opportunities offered by ICT in this respect. tation of e-services and applications that are target- With increased decentralization of service delivery, ing citizens and businesses in Ethiopia should allow there is a need for more effective engagement with for the usage of these ICT tools and modern analytics. citizens at the local level. The Bank is already sup- They should not only enhance public service delivery porting capacity-building efforts within local gov- (on the supply-side) but also take into account the ernment, engaging in dialogue, and fostering citizen real, up-to-date needs of the general public (demand participation. side) in a responsive and highly efficient manner. • Shared infrastructure, shared services, and IT solutions 31 133 Timothy M. Waema and Edith O. Adera (editors), Local Governance and ICTs in Africa: Case Studies and Guidelines for Implementa on and Evalua- As stated in the new e-government strategy, the elec- on, Pambazuka Press/IDRC, 2011, p. 91. tronic enablement of 219 services to be delivered FIGURE 4: Analy cs derived from a one-day func oning of the 311 system for ci zen response in the US MIDNIGHT NOON MIDNIGHT &21680(5&203/$,176 '$0$*('75((6 *5$)),7, 75$)),&6,*1$/&21',7,216 ',57<&21',7,216 6$1,7$7,21&21',7,216 6(:(50$,17(1$1&( CHLOROFLUOROCARBON RECOVERY %/2&.(''5,9(:$<6 675((7/,*+76 /2673523(57< 675((7&21',7,216 12,6( 7$;,&203/$,176 *(1(5$/&216758&7,21³3/80%,1* ,//(*$/3$5.,1* :$7(50$,17(1$1&( 6,'(:$/.&21',7,216 52'(176 ,//(*$/%8,/',1*86(6 29(5*52:175((6%5$1&+(6 3523(57<7$;(6 Source: Pitch Interac ve, Wired Magazine, November, 2010. through alternate channels such as the internet, mo- electronic channels of government and other bile, call center and citizen facilitation centers (i.e., ministry applications; telecenters), will be made possible due to the de- 5) PKI: Provisioning of PKI-based identification, ployment of enabling IT infrastructure and solutions. integrity, and non-repudiation for online trans- Called “core projects” and planned for a three-year actions related to e-Government projects in implementation phase, these include: Ethiopia; 6) National Payment Gateway: Provisioning of a 1) Woreda Network: Provisioning of high band- national payment gateway for Ethiopia to en- width connectivity between ministries and able all modes of electronic payments to be agencies for sharing data, voice, and video com- transacted through all the electronic channels munication throughout the country; of delivery; 2) National Enterprise Architecture (NEA): Unified 7) National Dataset: Provisioning a national level architecture adoption across ministries enabling dataset of commonly-used data elements across better integration of ministry applications; ministries that can be used by all interministeri- 3) National Enterprise Service Bus (NESB): Pro- al applications as well as channels of e-services; visioning a platform for seamless integration of 8) National Data Center: It is proposed that the ministry/agency applications and database at Ethiopian National Data Center (ENDC) would the back end; integrating all front-end channels consolidate services, applications, and infra- to deliver e-services; structure to provide efficient electronic delivery 32 4) National Integrated Authentication Framework of G2G, G2C, and G2B services. ENDC infrastruc- (NIAF): Provisioning of a unique identity-based ture shall provide adequate space to house ICT login to individuals for accessing the various assets of various departments and government agencies within the country in an environment of one government ministry, thus reducing interoper- that meets the need for reliability, availability, ability and stifling collaboration.134 scalability, security, and serviceability. This is quite characteristic of many governments Since the Woreda network has already been discussed around the world, which de facto are the largest or- in the previous section on ICT connectivity and access ganizations in their respective countries. They are gaps in Ethiopia, it would be useful to focus on other further characterized by complex, federated struc- aspects of the e-government strategy, such as 2) the tures where individual government agencies work in NEA and 3) the NESB, to start with. By outlining these their silos. This often leads to fragmented business components as part of its “core projects”, the Gov- processes and duplicated systems and technologies, ernment of Ethiopia quite rightly assigns a prominent creating obstacles in cross agency interoperability. In role to the shared IT infrastructure, shared services the attempt to address the challenge of governmental and solutions. This fact reveals a deep understand- agencies operating in silos, with huge inefficiencies ing of the holistic nature of e-government projects. and loss in performance, time, and money, modern Going forward, what could be suggested here is em- governments are adopting interoperability frame- bedding the IT architecture developed into a cloud works, in order to integrate services across multiple computing infrastructure. government agencies. As mentioned earlier in this report, cloud computing While the new e-government strategy does touch enables public bodies to select and host ICT services upon the issues of interoperability and collabora- in a secure, resilient, ubiquitous, and cost-effective tive approaches between agencies, Table 11 on the shared environment. According to a widely accepted following page illustrates a possible approach to be definition by the National Institute of Standards and embraced by the Government of Ethiopia in a more Technology (NIST), “Cloud computing is a model for holistic and comprehensive manner. enabling convenient, on-demand network access to a shared pool of configurable computing resources Enhanced interoperability, along with greater shar- (e.g., networks, servers, storage, applications, and ing and collaboration among government entities, services) that can be rapidly provisioned and released enables the establishment of one-stop/single-window with minimal management effort or service provider kiosks for the delivery of public services to citizens interaction”. Cloud computing has recently been in- and businesses. As described in Box 6, this is a very cluded in the list of the top ten tech-enabled business successful model of e-government with tangible re- trends by McKinsey & Co. Further, according to Gart- sults that could be witnessed in India. ner, “Cloud computing offers…a unique opportunity (for emerging countries) to leapfrog the traditional, Once the critical infrastructure is put in place in Ethi- expensive IT investments made by enterprises in ma- opia, there will also be the possibility to implement ture economies in much the same way that rapid de- a single-window kiosk for the delivery of public ser- ployment of wireless technology enabled consumers vices, leading to increased levels of customer satis- to skip landlines, and move directly to mobile devic- faction both for citizens and businesses. Currently in es.” The expected outcomes may include, inter alia, Ethiopia, it is impossible not to notice the difficulty of reduced operating costs, lower investments, flexibil- citizens to reach out to the multitude of public agen- ity in switching suppliers, wiser allocation of ICT re- cies and organizations, where a distinct set of pro- sources, and reduced energy consumption. cesses and documentation is required to access each public service. For example, when a citizen is entitled One important aspect to be discussed in the context to a set of social benefits, be it in healthcare, edu- of shared infrastructure and solutions is interopera- cation, or disaster relief areas, he or she may have bility. While government entities in Ethiopia are inter- to provide a totally distinct set of documents (e.g., acting with each other and exchanging information, birth certificate, ID card, passport, health insurance challenges remain at the level of interoperability and card, etc.) leading to huge inefficiencies in terms process optimization, with the lack of unified commu- of cost and time. This issue has to do with both the nications and messaging systems limiting the oppor- tunities for collaborative approaches and knowledge 134 In this specific context, interoperability describes the mechanisms that sharing among the public officials. In addition, most allow users to exchange and subsequently reuse for other purposes data 33 agencies use bespoke solutions and software that have and solu ons that have been already released for use by other govern- been developed and customized for the individual use ment en es. TABLE 11: Overview of key aspects to consider for an interoperability framework in Ethiopia Aligning work Knowledge sharing Joint value crea on Aligning strategies processes Technical Physical or electronic Common architecture; Joint applica on Joint financing Interoperability data exchange among Technical standards development; Common separate applica ons; databases; Informa on Closed systems security Organiza onal Efficient opera on Best prac ces; Real- me Cross-agency value Poli cal decision Interoperability requires integra on of knowledge transfer; configura on; New making ac vi es and forms Change organiza onal services based on Socioeconomic culture business cases; Inter- benefits organiza onal control mechanisms and trust Seman c High degree of Metadata specifica on Service catalogues Adapta on of laws Interoperability specificity and common Informa on models and regula ons; data defini ons in Business models certain areas Legal Aligned legisla on so that exchanged details accorded proper legal weight. The interoperability is Interoperability rendered specific and binding via legisla on, or bilateral and mul lateral agreements (as in the case of EU countries). Source: Adapted from Hans Solli-Sæther, Inderscience Enterprises, 2011 and European Interoperability Framework, 2011. interoperability of the government systems (already Box 6: Example of one-stop/single-window addressed above), but also with the authentication/ delivery of public services identity management system in place. Single-window/e-SEVA system in India In an attempt to address this problem, the new The most evolved model of electronic service delivery e-government strategy suggests adopting a National in India, e-SEVA was launched with 43 service centers Integrated Authentication Framework (NIAF), along in the city of Hyderbad, Andhra Pradesh region, and with building a PKI infrastructure and a National Pay- then expanded to 213 towns and later rural areas. ment Gateway (points 4, 5, and 6 in the list of “core Ul mately, e-SEVA centers have developed into a one- projects” mentioned above). However, establishing a stop shop for more than 130 government-to-ci zens broader electronic identification (e-ID) system is also (G2C) and business-to-consumer (B2C) services. With an essential building block for successful e-government nearly 1.6 million transac ons per month, ci zens in Ethiopia. use e-SEVA because it offers convenience of delivery of services at a loca on closer to their hometown, Indeed, e-ID/identity management is fundamental requires just one visit to the e-SEVA center instead of for e-government service delivery, allowing precise visi ng many other offices, takes less me to transact, authentication of citizens and beneficiaries, to help and entails shorter wai ng periods. Today, e-SEVA ensure that services reach their intended recipient. offers the widest choice of channels (e.g., online Capitalizing on available identity management tech- portal, ATM, e-SEVA kiosk, e-SEVA service centers, nology to avoid identity fraud, the Government of bank counters, etc.) and the widest array of public Kenya is developing its Hunger Safety Net Program, services accessible to ci zens and businesses. offering long-term welfare assistance for food to mal- nourished families, who receive US$27 per recipient, Source: The World Bank, Open Development Technology Alliance bi-monthly. A similar program has been running in (ODTA). Botswana since 2008. Other countries, such as Nige- ria, aim to identify and target beneficiaries who are 34 entitled to pension funds. Specific identity management schemes, especially recognition, could be expanded and leveraged in ar- those which use biometric technologies, can push the eas that would promote increased inclusiveness of boundaries of citizen service delivery and innovations citizens and those in need in public service delivery. for development, particularly in the social and finan- For instance, today over 1 billion people in develop- cial sectors, and are therefore recommended in this ing countries are estimated to have had their bio- section. Box 7 illustrates just a few examples of the metric data recorded for a variety of purposes, and far-reaching applications of electronic identification the number is growing; industry growth per year over schemes. the 2005–2010 period has been 34% for all develop- ing countries and 37% for Africa.135 The scope of some These eID applications can potentially be developed of these programs rests on a relatively small scale, in Ethiopia by building on existing successful pilots such as the NIS Project, with limited or no connection and initiatives supported by the PSCAP Project in the to other nationwide authentication systems. Alterna- areas of tax administration and public sector reform. tively, programs like the Watan program in Pakistan, covering over 1.5 million flood-affected households, The Government of Ethiopia has already initiated draws on Pakistan’s fingerprint-based National Data- promising work in this area. The World Bank-funded base and Registration Authority (NADRA) that covers National Identification System (NIS) Project, imple- some 96 million citizens.136 The program, launched in mented by the Ethiopian Revenue and Custom Author- 2010, assists the government in transparent disburse- ity, is collecting taxpayers’ fingerprints using mobile ment of flood relief cash grant/ aid of an equivalent registration units. Further use of biometric identifi- of US$230 per family. cation, including fingerprinting and iris and facial By adopting a fully-fledged eID system that allows for more inclusive approaches, the Government of Ethio- pia can more efficiently provide services and account Box 7: Electronic iden fica on (eID) for the unique identity for each citizen, ensuring that applica ons benefits reach those who are entitled to them in a reliable and timely manner. Electronic iden ty • na onal eID, eResidence permit 2. Capacity and ICT skills • eGov services: eTax payment, eVo ng, eApplica on • Electronic cer ficate, digital signature Following the establishment in 2003 of the Ethiopian • eEmployee: military, police, ministry ICT Development Agency (now replaced by the MCIT) • professional ID, private company ID cards as the national ICT policy advocacy and coordinating body, the government performed extremely well in Travel documents developing a core set of national policies, laws, stan- • ePassport, eVisa, Registered Traveller Program, dards, and guidelines for the use of ICT in the Ethio- na onal eID with travel func on pian economy in general and in the public sector in particular. Healthcare To date, the ICT capacity-building initiatives, mainly • eHealth pa ent card, health professional card, delivered under the ICTAD Project, have been the Social Security card following: Condi onal cash transfers, welfare • Training to Experts: 931 members trained in basic • pension card, social benefits en tlement card IT skills, 203 members trained in Interactive and Dynamic Webpage Development, 1180 members Road safety • eID in mobility: eDriving license, eVehicle 135 Gelb and Clark, 2013, “Iden fica on for Development: The Biomet- registra on card, Toll Collect, Tachograph-Driver rics Revolu on”, CGDEV Working Paper 315, Washington, D.C.: Center for Card Global Development. 136 Gelb and Decker, 2011, “Cash at Your Finger ps: Biometric Technology Source: www.eprac ce.eu for Transfers in Developing and Resource-Rich Countries”, CGDEV Working 35 Paper 253, Washington, D.C.: Center for Global Development. trained in Advanced Network Management, 103 Development Agency (FEMSEDA). However, important in IT Security, 80 in IT Security and Cybercrime, ICT capacity gaps remain to be filled, and there is a 100 members trained in Business (IT) Continuity striking discrepancy between the vision of the MCIT and Disaster Recovery, 60 members trained in C# and current ICT readiness across the government with dot.net Framework, 33 trained in Certified agencies. Commercial Network Service Provider (CCSP), 112 members trained in Database Management. Despite the impressive achievements under the ICTAD • 8 Community Radios have been implemented Project activities more efforts are needed to develop and operationalized, which helps in informa- ICT skills among public officials at both national and tion dissemination and capacity building in rural subnational levels, and therefore a stronger emphasis communities. should be placed on ICT-related capacity-building ac- • Technical Vocational Education Training (TVET) tivities. This holds particular relevance for Ethiopia, centers have been created and around 576 teach- which is embarking on a vast e-government journey ers have been trained on ICT to effectively deliver with plans to develop over two hundred e-services. education to students. Around 15 ICT training labs The use of these e-services by the citizens is con- in all the regions have been established for pro- tingent upon digital literacy and the overall level of viding training to the TVET teachers. education. • 645 SME operators have been trained on com- puter maintenance, basics of computing, and da- To address this challenge, the Government of Ethiopia tabases by training institutions such as FEMSEDA is committed to increasing the overall level of edu- and PIC. cation in the country, currently investing in it about • Four Business Incubation Centers to help entre- 4.7% of its GDP, slightly higher than the sub-Saharan preneurs in ICT-related businesses have been es- region (4.3%) and the average for low-income coun- tablished. A total of 43 private ICT startups have tries (4.2%).137 As mentioned earlier, the government entered into business under these centers. In ad- launched an ICT in Education Implementation Strat- dition 18 virtual incubation hubs in Addis Ababa egy as part of a wider Ethiopian National e-Education have been established to support ICT startups and initiative that supports the ICT for Development 2010 create business opportunities. Plan. Nevertheless, professional education and train- • Computer Refurbishment and Training Center ing in the ICT area should further be extended to pub- (CRTC) has been established to provide hands-on lic officials, at both national and sub-national levels. training on computer refurbishment and technical Emphasis should be put in the woredas and kebeles to and business training. The key activity included (i) augment ICT access and usage, and (ii) improve ICT refurbishing donated computers to provide af- skills among civil servants. fordable computers to schools, health centers, and communities. 3. Good governance mechanisms • The ICT Center of Excellence has been estab- lished in Addis Ababa University for research and The Government of Ethiopia is committed to improv- development of ICT solutions. ing the overall performance and the integrity of the public sector. A twelve-year Public Financial Manage- That said, the level of ICT literacy is still quite het- ment reform in Ethiopia raised its limited system of erogeneous. This is especially critical in the public financial control to international standards, affording sector. Under the ICTAD Project, the Ethiopian gov- it a third-best ranking in Africa.138 In addition, the ernment provided institutional support and capacity PSCAP Project triggered substantial reforms.139 Several building to a number of public agencies. Efforts tar- PSCAP sub-programs, including civil service reform, geted at strengthening the management teams of the district level decentralization, urban management other two core sector agencies—the Ethiopian Tele- and tax sector reform sought to harness ICTs for the communications Authority (ETA) and the Ethiopian Broadcasting Authority (EBA)—with positive spillover effects extended to the Civil Service College, the Col- 137 World Development Indicators, World Bank: Most recent data is 2010. 138 Harvard Kennedy School, 2011 “Reforming Public Financial Manage- lege of Telecommunications and Information Tech- ment in Africa” at www.hks.harvard.edu nology (CTIT), the Productivity Improvement Center 139 World Bank P107217 Public Sector Capacity Building Program Support 36 (PIC), and the Federal Medium and Small Enterprise Project (PSCAP) Phase I and II. development of human resources, democratization, to increase citizen participation and engagement, service delivery and good governance. This recently- highlighting global best practices, can be found later concluded Bank-funded US$398 million project made in this chapter. significant contributions to improving the quality and efficiency of the public sector. New emerging trends in the Despite these impressive achievements in the qual- ity of governance, recurrent surveys, mandated by public sector MCIT and donor agencies, reveal that government- This section will cover some of the recent technolo- sponsored ICT procurements still lack transparency gies and applications and examine how the public sec- and standardized practices. Currently, and despite tor in Ethiopia stands to gain from the newest trends considerable efforts from the government, Ethio- in ICT, namely: pia ranks 111th out of 177 countries, according to Transparency International’s Corruption Percep- • Open government and open data initiatives tions Index (CPI).140 This certainly is an improve- • “Government-with-you” approach and co-cre- ment since 2009, when Ethiopia was ranked 120th, ation with citizens but Ethiopia has a much lower rank compared to • Government cloud countries in the region such as Mauritius and Zam- bia. This evidence suggests more effort is needed Open government and open data initiatives to strengthen public procurement agencies and in- stitutional policies that support transparency and As already highlighted in the background section of responsiveness of public entities. Such reports are this report, new technologies are enabling mass citizen not only critical of public spending, but they also participation in a variety of domains. However, one of raise concerns over the level of citizen engagement the most promising potential impacts is to significantly and public access to information. Not only is trans- increase responsiveness of public sector services. The parency in public budgets and spending important, near universal reach of mobile communication net- but so also is access to public information and en- works in many low income countries, combined with gagement with citizens for improved citizen par- innovations such as geolocation technologies and so- ticipation and public responsiveness. cial networks, have begun to transform feedback loops in the public sector. Such innovations allow citizens to 4. Citizen feedback to government entities participate by providing feedback on public services in a transparent manner. They radically improve monitor- Ethiopia has been active in citizen feedback initia- ing of service delivery (both bottom-up and top-down), tives, which have already been reflected in the 2010 bringing governments closer to their constituents. Woreda and City Benchmarking Survey (WCBS),141 showing that 53% and 48% of citizens in Ethiopia are The international experience of open government so consulted on development needs and quality of public far has shown the importance of political will and lead- service, respectively. However, these numbers reflect ership. Leading countries such as the US, UK, and Bra- a decline of 5% and 2%, respectively, from the 2008 zil have all had strong endorsement of the open gov- survey. These results imply that sustained efforts in ernment agenda from their top political leadership. A this area have to be made, perhaps, by leveraging the number of successful examples of open government transformational power of ICT to bring up more tan- are now available. These include, for example, open gible and rapid results. Specific examples on the ways budgets in Brazil, reporting of campaign donations in Chile, availability of performance data on hospitals in the UK, citizen reporting of handpumps in disre- 140 h p://www.transparency.org/policy_research/surveys_indices/ pair in Tanzania, open legislature in Latvia, and citi- cpi/2010 zen feedback in New York City. The UK has announced 141 Ini ally designed as a core monitoring and evalua on tool for the Public the establishment of an Open Data Institute, involving Sector Capacity Building Program (PSCAP), the survey has since expanded to include several reforms and donor supported opera ons. More info businesses and academic institutions and focusing on available for Public Sector Capacity Building Program Support Project innovation, commercialization and the development (P074020) PDO indicators, as of January 2011, to be accessed at h p:// of web standards to support the open data agenda. opera onsportal2.worldbank.org It will ensure that open data research is transformed 37 into commercial advantage for UK companies and will access to development information is a critical step work with academic centers to increase the number in enabling a participatory development process and of trained personnel with extensive open data skills nurturing citizen engagement and feedback. and provide expert advice for government. The UK Government has also created a Data Strategy Board • Civic engagement on government processes and a Public Data Group. Civic engagement is an important aspect of any open The action plans for various countries under the Open government initiative. The International Association Government Partnership can be seen at the website for Public Participation provides a useful Spectrum for of the Open Government Partnership. Public Participation. Early open government initiatives have largely fo- A number of governments have put in place models cused on four areas:142 of civic engagement. The US Government has estab- lished an e-petition platform WeThePeople that pro- • Cataloging sources of data. vides citizens with a new way to petition the Govern- • Aggregating raw data into a single platform. ment. If a petition gets enough support, White House • Encouraging users to develop non-traditional ap- staff review the petition, ensure that it is sent to the plications with government data, and appropriate policy experts, and issue an official re- • Mashing it up in ways that make it more meaning- sponse. The public can also participate online on the ful to its constituents. rulemaking process through regulations.gov. Govern- ments are engaging with software developers through The role of technology in improving service delivery hackathons. An example of this is New York City’s Digi- is part of a broader trend of empowering citizens tal City Roadmap that announced the City’s first Hack- through Open Data for Open Development. In the Af- athon: Reinventing NYC.gov. Other examples of civic rica region, Kenya became the first low income coun- engagement are San Francisco’s ‘Engage4Change’, try to feature an open government data portal with and Oakland County Ideas Project. the launch of the Kenyan Open Data Initiative. This robust initiative is matched by a flourishing commu- In June 2001, the Estonian government launched a nity of entrepreneurs that is already eager to make public participation portal named “Today I decide” use of the available data by developing tools and ap- (TOM). The tool gave citizens an opportunity to pro- plications that are useful to society. It is important, pose, discuss, and vote on new legislation, after however, to keep in mind that for open data to be- which decision-makers are required to deliver a well- come a sustained success, ministries and departments founded response. Seven years of experience with must work across sectors to implement an integrated this tool have made clear that it can be a meaning- system and to continue efforts to collect and provide ful instrument for all governments and public bodies better quality data to citizens. throughout the European Union. On the basis of expe- rience with TOM the open source tool was developed Recent initiatives in opening up government data with the support of EU development funds in 2008. (e.g., Data.gov) offer new opportunities for a wide The tool allows: range of partners and social networks to use the data to create new and innovative applications that com- • Citizen initiative and participation in proposing bine diverse datasets to offer new services and per- and discussing regulations and government le- spectives. The World Bank itself launched its Open gal acts. The tool is easy to use by citizens and Data Initiative in 2010, providing free and easy access easily adaptable by interested governments and to statistics and indicators about development for institutions. all users through a new open data site.143 Such open • The dissemination of necessary documentation and guidelines that make possible a productive and effective use of the tool in proposing and dis- cussing regulation. This documentation include past experiences, information on traps and pit- 142 Source: Deloi e, Unlocking Growth: How Open Data Creates New Op- falls that could render the tool ineffective, and 38 portuni es for the UK. pointers on how best to use the outcomes of citi- 143 data.worldbank.org zen initiatives and participation. Box 8: Ci zen feedback mechanisms, of the world’s popula on, but also the means to target channels, and tools messages to specific communi es and to map the origin of feedback from mobile phone users. For example in Mobile channels Kenya, Map Kibera is an ini a ve that has embraced a Innova on is being driven by the exponen al growth in co-crea on model to develop a detailed map of urban the reach of mobile phone networks and by a new era in needs in the Nairobi slum. The program asks local youth collabora ve communica on using tools that empower to draw, edit, and comment on paper maps, a er which ci zens to directly par cipate in the development an online community of volunteers digi zes the maps. process. Even the most basic mobile phones fulfill this This process gives voice to the urban service needs purpose. In Tanzania, Daraja harnesses mobile phones to of Kibera’s residents while facilita ng easier urban track maintenance on exis ng water pumps. By providing management on the part of the local governments. residents with the official spending data on their district pumps and encouraging SMS-based responses, the Another innova ve and relevant use of geographic NGO can sample the popula on and put pressure on informa on system (GIS) technology is found in response government agencies to improve their water supply. to the 2010 Hai earthquake devasta on. Innova ons such as Open Street Map, an open-source online map Another tool, SeeClickFix, is a mobile applica on edi ng pla orm (a model similar to Wikipedia), enabled that encourages for example, people in New Haven, 600 volunteers to create over one million edits in a Connec cut, to report problems such as potholes to fortnight to provide a comprehensive base map of Port local government. The company now has city clients au Prince. Volunteers across the globe used Ushahidi’s such as Tucson, Arizona, and Washington, D.C. Nearly so ware (developed to collect and display text messages 700,000 user-generated reports have been registered on during Kenya’s 2007 elec on violence), combined with the site since its founding and correc ve ac on has been the new base maps, to provide real- me and interac ve taken.144 maps of the vic ms’ needs to help relief workers effec vely respond to the crisis. Mobile pla orms, which enjoy be er geoloca on features, are facilita ng this transforma on. Game-changing approaches from the combined effect of the above GIS mapping and tools Taken together, the above technologies and applica ons The past 5–8 years have also witnessed a geospa al present a game-changing opportunity for the empowerment revolu on through the advent of free data such as of ci zens to directly par cipate in the development Google maps, new standards for web mapping, and process and to work with governments on wholly new the ease of automated geocoding. By 2012 over half a approaches that enhance service delivery. The implica ons billion mobile devices were expected include loca on for transforming sector opera ons and government services technology such as GPS, making it possible to customize are profound. The repercussions for global development are services to meet individual and loca on-specific needs. only just coming to light. Even without resor ng to the GPS-enabled devices, all handsets in use today can be geolocated to a minimum accuracy of the associated cell tower serving the phone. Source: The World Bank Knowledge Pla orm, Open Development Thus, the mobile phone not only offers access to 90% Technology Alliance (ODTA), 2013. Most countries are currently focusing on opening up • Citizen engagement and feedback mechanisms their data in machine readable form. Little progress has been made, however, in pursuing “open process For many countries, citizen engagement has become innovation” models for improved design and delivery a new means of communicating with citizens. Ex- of government services. Unless government processes amples of citizen engagement include applications are reformed, it will be difficult to achieve govern- that encourage citizens to report on garbage pickup ment transformation. shortcomings, street potholes, flooding, and other in- frastructure. Thousands of mobile applications have 39 144 h p://en.seeclickfix.com/, accessed December, 2013. been designed that enable users to easily submit valuable information, including GPS coordinates, photos, and even videos. One of these applications Box 9: Examples of innova on and co- is currently used by students in Tanzania, who are crea on ini a ves involving governments geocoding every home, footpath, drain, school, busi- and ci zens ness, water, and waste collection point in a Dar es Salaam neighborhood. The project, supported by the MindLab: How Denmark innovates across World Bank, is the first step towards mapping margin- agencies alized neighborhoods in the city to support the efforts In Denmark, government interest in incorpora ng of the proposed Dar es Salaam Metropolitan Develop- user-centered design into public services has led ment Project. to the forma on of MindLab. As an “innova on unit,” MindLab works to support about 20,000 As social media grow and spread, governments have public officials in three government ministries— found that they need to be where citizens are, and the Ministry of Economic and Business Affairs, realize that no single communications solution will be the Ministry of Taxa on, and the Ministry of the sole information channel. Public administrations Employment—to prac ce innova on with ci zen now develop multi-channel communication systems well-being in mind. MindLab brings the ci zen among many different platforms and applications, as perspec ve to the work of the ministries, helping presented in more detail in Box 8. policymakers and employees co-create be er solu ons for the ci zens. Projects focus on the “Government-with-you” approach and co- primary missions of MindLab’s three partner creation with citizens ministries, providing solu ons related to economic Governments around the world are already considering development, workplace safety, and taxa on. The an ICT for transformation agenda. For example, Sin- organiza on’s structure as a self-contained unit gapore’s 2011–2015 ICT strategy promises to usher in gives it the ability to also partner with addi onal a new era in which the government aims to shift from government agencies as projects overlap with the a “government-to-you” approach to a “government- concerns of MindLab’s main ministries. with-you” strategy in the delivery of public services. The goal of such initiatives is to facilitate co-creation Future Center in Netherlands and interaction between the government, the people, Netherlands has also established a new Future Center and the private sector to bring about greater value outside the City of Utrecht to encourage use of creation for the country and the people. scenario planning, crea ve physical spaces, facilitated workshops, and visual technology for achieving Box 9 illustrates another example of successful col- greater collabora on between civil servants to help laboration between citizens and public agencies in deal with complex future challenges (rela ng to the governments of Denmark and Netherlands. climate change). Government Cloud Analy cs tools for co-crea on in Singapore Singapore’s e-Government Masterplan 2015 men ons Today, an increasing number of countries are embrac- that “a blueprint for the future ICT workplace will be ing the Government Cloud model based on cloud com- developed to spearhead government-wide adop on puting architecture as an innovative solution for pres- of innova ve workplace technologies, analy cs- ent economic challenges of ICT-enabled development. enabled processes, and automated solu ons.” Analy cs is going to become increasingly important Some countries are already implementing Govern- in understanding and defining the experiences of ment Clouds which will allow them to cut spending ci zens and other cons tuents. Analy cs holds the for IT infrastructure, manage IT and labor resources key “to seeing, hearing and engaging more effec vely; more efficiently, and provide high quality public ser- making be er choices; op mizing and improving the vices to the population. The implementation of Gov- way work is done/how policies are made; measuring ernment Clouds is highly important for transition impact, progress and results; and communica ng the and developing countries also. In the absence of a outcomes meaningfully.” well-established ICT infrastructure, the use of cloud 40 computing in the public sector is an optimal solution Source: h p://publicpolicylab.org 2011, World Bank research. Box 10: Examples of successful a state-of-the-art, enterprise-class Cloud Compu ng implementa on of cloud compu ng Data Center at Langfang to support the development of infrastructure by governments Hebei Province as a high-end informa on technology and service-based economy. The center—which is expected Government Cloud Infrastructure to be completed in 2016—will be the largest in Asia. It A number of governments have begun to establish will cover 6.2 million square feet. Among other things, Government Clouds (G-Clouds). Notable examples are the pla orm will be used to support Langfang City’s China, Japan, Thailand, UK, and the USA. Cloud compu ng development and hos ng for smarter transporta on, is now widely regarded as a technology megatrend along e-government services and administra on systems, food with social networking and mobile services. and drug safety services, and supervision solu ons. One of the most well-known ini a ves is the UK Recently, the Government of Moldova has embraced the Government Cloud, or the G-Cloud, the internal brand innova ve idea of cloud compu ng and has opted for the for secure, trusted, and shared public sector ICT Government Cloud (which is called the M-Cloud), aiming services in Britain. All G-Cloud services have common for increased efficiency of public service delivery at characteris cs including pre-cer fied standards reduced costs. The M-Cloud is targe ng three categories compliance covering areas such as service delivery, of poten al users: (a) Government ministries, SOE technical (interoperability, cybersecurity, etc.), and departments, and agencies; (b) small and medium-sized informa on assurance, provisioning from an efficient enterprises (SMEs) engaged in the development and and sustainable data center, which are made available delivery of IT services and solu ons for government; and through the government Applica ons Store. (c) universi es requiring such infrastructure for research and development, and for integra ng Cloud compu ng The Chinese government is also pursuing cloud skills as part of their curriculum design. With this holis c compu ng as part of its long-term economic strategy. It is approach, the Government of Moldova hopes to adopt aggressively promo ng pilot cloud compu ng innova on Cloud compu ng to benefit not only the public sector, but centers in Shanghai, Beijing, Shenzhen, Hangzhou, also help the private sector and academic ins tu ons. and Wuxi. To this end, IBM and Range Technology Development Co. Ltd announced a collabora on to build Source: The World Bank, 2011. for catalyzing government transformation, economic services were implemented within the government growth, and efficient allocation of resources in those to generate economies of scale and enhance indi- countries. vidual agencies’ work performance capabilities. For example, more than 11 agencies consolidated their Box 10 presents recent examples of cloud computing human resources, finance, and procurement admin- infrastructure and cloud-based shared services that istration systems into one shared system called ACE have been deployed by governments to enhance the (Alliance for Corporate Excellence). The successful efficiency of service delivery and the overall perfor- implementation of ACE has led to higher efficiency mance of the public sector. in agencies’ HR and finance operations, resulting in an overall 30% cost savings. During the same period, Similarly, the example of Singapore illustrates how the mobile government (or mGov) program deployed ICT can become an integral part of a country’s public more than 300 government mobile services to ride sector DNA for public administration and public ser- on the high market penetration of mobile phones to vice delivery. Singapore’s ICT strategy over the years offer customers an additional channel for accessing has brought greater efficiency gains to the public public services.145 sector, while Singapore’s citizens and businesses have enjoyed unprecedented levels of convenience and cost savings when using public services. The government provided shared infrastructure and solu- tions for every agency and entity, serving as an en- 41 abler across sectors. Internally, a number of shared 145 h p://app.mgov.gov.sg Suggested way forward: approach and government emphasis. Currently these policies need to be revisited and modernized, and in embedding ICT in the public many cases a decree to enact the actual application of the law is required. sector in Ethiopia The suggested way forward for Ethiopia addresses Develop sustained ICT capacity-building efforts three major aspects of ICT-enabled transformation of targe ng public officials. the public sector in Ethiopia: a. Creating the enabling environment: regulatory, In addition to the efforts that have already been un- legal, and institutional arrangements dertaken by the Government of Ethiopia in the area b. Shared infrastructure, shared services, and of ICT capacity building, what is needed is a new, frameworks strengthened effort to build capabilities in the public c. Citizen engagement/feedback mechanisms and sector agencies that are in charge of implementing the interfaces e-government strategy and other ICT-related programs. The section below reiterates and summarizes some of In parallel, extensive outreach campaigns for citi- the recommendations previously made in this chapter, zens, local businesses, and other key stakeholders are structured around these three main areas of focus. another prerequisite for creating an enabling environ- ment that will support the implementation of poli- a. Creating the enabling environment: regula- cies and strategies formulated by the Government of tory, legal, and institutional arrangements Ethiopia. The success of governments that have adopted a ho- Strengthen the ins tu onal arrangements to pro- listic approach to modernization and sustainable de- vide for the crea on of a Public Sector Innova on velopment—from national planning to performance Unit responsible for the implementa on of ICT- management and innovative service delivery—hing- es on their ability to balance each of the above- enabled transforma on in the public sector. mentioned initiatives and their sub-activities accord- ing to the priorities and requirements of ICT-enabled Similar to the MindLab example in Denmark, the role reforms. The streamlined use of ICTs should lead the of the Public Sector Innovation Unit would be to work modernization efforts of the public sector towards with the ministries and agencies of the government a FAST (Flatter, Agile, Streamlined, Tech-enabled)146 to implement the ICT-enabled projects in every sec- government model, which is one that could be recom- tor of the economy in Ethiopia. An innovation unit mended to Ethiopia. could possibly be set up under MCIT in partnership with an international organization, such as Denmark’s To facilitate this ICT-enabled transformation, the MindLab, Singapore’s Government Business Analytics Government of Ethiopia may wish to consider devel- Program, or UK’s Open Data Institute, to focus on in- oping a comprehensive regulatory and institutional novative public service design and delivery. Not only framework that allows for the mainstreaming of ICT will the innovation and analytics capabilities need to across sectors and government entities. be strengthened and trained, but a strong leadership and governance structure will also be need to be put Revise the na onal policies and regula on with re- in place, perhaps within the MCIT, or independently. spect to postal services, electronic iden fica on, digital signature, mobile and electronic payment. b. Shared infrastructure, shared services, and frameworks These national policies and regulation with respect to It is recommended that the Government of Ethiopia postal services, electronic identification, digital sig- create a common infrastructure and mechanism for nature, and mobile and electronic payment are just rapid deployment of ICT-enabled public services, 42 a few among many that would require a concerted including a shared computing infrastructure and de- velopment of the systems needed to deliver govern- 146 World Economic Forum, 2011 Report on “Future of government”. ment services electronically. With the advent of cloud computing infrastructure, shared platform, standards, and possibly application hosting environment and common tools that arise to support government configurations. agencies, the Government of Ethiopia now faces the 3. Software as a Service (SaaS). The capability opportunity to embrace these technologies and agile provided to the agencies is to use applications solutions to improve public service. running on the cloud infrastructure (e.g., email, document management system, base maps, Develop cloud compu ng infrastructure and ex- etc.) The applications will be accessible from pand its use in the public sector various client devices through a thin client in- terface such as a web browser (e.g., web-based email). The agencies will not manage or control The deployment of cloud computing infrastructure in the underlying cloud infrastructure including Ethiopia will make it possible to reach following out- network, servers, operating systems, storage, comes: (i) clear line of sight to costs of computing or even individual application capabilities, with resources; (ii) reduction in time to procure computing the possible exception of limited user-specific capacity for government agencies, allowing more ag- application configuration settings. ile application and service development/deployment cycles; (iii) reduction in costs of power, cooling, and In addition, government-wide shared services, such space requirements; (iv) better use of skilled IT per- as authentication services, along with cybersecurity sonnel, as Ministries do not have to maintain expen- and interoperability frameworks, are to be strength- sive staff and support systems to maintain their own ened in Ethiopia. Implementing shared services re- data centers and sophisticated terminals; (v) increase quires a governance framework to manage the new in the availability of the IT systems in cases of disas- relationships and balance the decision rights of mul- ters or failures, because of the use of the cloud for tiple stakeholders. backup; and (vi) improved skills and capacity in both the public and private sectors to exploit emerging Strengthen the interoperability frameworks across market opportunities in the area of cloud computing. government agencies. Further, the cloud infrastructure solutions which could be potentially implemented in Ethiopia are the This recommendation focuses on the interoperabil- following: ity standards for Ethiopian government to enable the integration and rationalization of all government IT 1. Infrastructure as a Service (IaaS). The capability systems that currently are or will be developed in the provided to government agencies to provision future. As revealed by international best practice, a processing, storage, networks, and other funda- government-wide architecture enables end-to-end mental computing resources where the agencies business processes, standard technologies, a rational- will be able to deploy and run arbitrary soft- ized data structure, and modularized e-services that ware, which can include operating systems and can be assembled as required to deliver e-services. applications. The agencies will not manage or It is therefore a high priority for the Government of control the underlying cloud infrastructure but Ethiopia to develop a framework for enhancing in- will have control over operating systems, stor- teroperability across various agencies and ministries. age, deployed applications, and possibly limited control of select networking components (e.g., host firewalls). Establish a cybersecurity framework following the 2. Platform as a Service (PaaS). The capability most recent developments in the field and update provided to the government agencies will be the exis ng data security and privacy laws. to deploy onto the cloud infrastructure agency- created or -acquired applications created using programming languages and tools supported by As cybersecurity increasingly becomes a threat, it is cloud computing (e.g., application program in- recommended that the Government of Ethiopia put terfaces for authentication, e-payment, etc.) an information security program in place. Information The agencies will not manage or control the un- security in this context refers to the protection of derlying cloud infrastructure including network, information and information systems from unauthor- 43 servers, operating systems, or storage, but will ized access, use, disclosure, disruption, modification, have control over the deployed applications perusal, inspection, recording, or destruction; and its purpose is to protect the confidentiality, integrity, c. Citizen engagement and feedback mechanisms and availability of government information. and interface As the Government of Ethiopia moves towards mod- As discussed earlier in this chapter, new ICT tools and ernizing its public service and civil service/administra- social media have opened powerful new possibilities tions, an increasing amount of information will be col- to public administration for dialogue and coopera- lected, processed, and stored in electronic computers tion with citizens. The Government of Ethiopia could and transmitted across networks to other computers. grasp this opportunity to trigger significant changes Cybersecurity is critical as protecting confidential in- in the way citizens and businesses engage with the formation of citizens, businesses, and other constitu- private sector. ents and is an ethical, legal, and business requirement. Hence, it is recommended that a cybersecurity frame- Establish a ci zen feedback framework and adopt work to be established, based on basic principles of an open government approach information protection, by developing administrative controls in terms of policies, procedures, standards, and guidelines. The framework should also provide a Public dialogue and citizen engagement support multi- system of security classification for government infor- stakeholder evaluations of policymaking and improve mation and provide tools for cryptography/encryption the quality of development outcomes. At its best, the to protect information from unauthorized or acciden- resulting interactive dialogue can increase efficiency, tal disclosure while in transit or storage. innovation, and responsiveness. The Government of Ethiopia could leverage the power of ICT to funda- Expand the authen ca on services in place to a mentally transform the way it engages and interacts fully-fledged eID system with biometrics for ci zen with its citizens, seizing upon initiatives such as open iden fica on and social benefits management. data portals and geomapping mechanisms to enhance its service delivery. With citizen well-being in mind, the Government of Ethiopia can embrace technologies and ICT solutions which enable the targeting of citizens entitled to so- Summary of cial benefits. While addressing the needs of the most recommendations for ICT in vulnerable and marginalized citizens, the Govern- ment of Ethiopia can leverage identity management/ the Public Sector biometric technologies to build additional cost-saving and revenue-generating activities. All the recommendations in this chapter pertain to mainstreaming ICT in the public sector and across the government in Ethiopia. However, one can also Increase ICT access through the expansion of the analyze the above through the lenses of Back-Office/ telecenter network, using this new pla orm of Front-Office, where: service delivery to streamline access to basic fi- nancial services, e-government services, and TVET • Back-Office refers to the internal operations of training for manufacturing. government that support core processes and are not accessible or visible to the general public; and Scaling up the telecenter network could enable bet- • Front-Office refers to the government as its con- ter and wider access to basic ICT services and special- stituents see it, meaning the information and ser- ized TVET training for the manufacturing industry. In vice providers, and the interaction between gov- addition, basic financial literacy training, along with ernment and both citizens and businesses.147 the provision of some simple financial products, such as microcredits and farmers’ insurance, could be de- Table 12 on the following page presents these chap- livered using the telecenter network. Further, the ex- ter recommendations as applicable to Government of tended telecenter network could serve as a platform Ethiopia Back- and Front-Office operations. 44 for public service delivery: a new channel for access- ing e-services and a range of relevant e-government Defini ons by United Na ons Public Administra on Network (UNPAN), 147 applications. 2010. TABLE 12: Summary of recommenda ons in priority order for enhancing public sector performance with ICT in Ethiopia Area Recommenda on a. Laws, policies, regula ons, a.1 Consider adop ng an interoperability framework; cybersecurity framework; strategies electronic iden fica on; digital signature, mobile and electronic payment; provision of financial services through postal network; open government framework; b. Ins tu ons, en es, agencies b.1 Establish a Public Sector Innova on Unit with analy cs capability and role c. Incen ves, promo on -- Back-Office Front-Office d. Infrastructure, connec vity d.1 Explore cloud compu ng d.2 Provide ICT access points infrastructure and services – PaaS, (telecenters) IaaS, SaaS services148 e. Services (enablers) e.1 Employ authen ca on/e-ID e.2 Implement open data and ci zen services feedback mechanisms f. Skills, training, capacity building f.1 Offer ICT training and skills f.2 Deliver TVET and ICT-skills development programs for civil programs through telecenters to servants rural popula on g. Processes and procedures -- h. Access to finance h.1 PPP models and community-based financing 45 Pla orm as a Service (PaaS), Infrastructure as a Service (IaaS), and So - 148 ware as a Service (SaaS). ICT in the Health Sector Health sector: stock-taking in international organizations, has already implemented a number of successful projects in the health sector Ethiopia using the new technologies. In 2010, Ethiopia prepared a medium-term strate- This chapter provides a summary of existing initia- gic development document entitled “The Growth tives using ICT in the health sector and also outlines and Transformation Plan (GTP) for the years 2011— new opportunities for further development of ICT in 2015.”149 The overriding development agenda of the the national Ethiopia healthcare system. GTP is to sustain the growth path and alleviate poverty. It also aims to improve the quality of health services, thereby achieving the health-related Millennium De- National trends and velopment Goals (MDGs): (i) reduce child mortality; (ii) improve maternal health; and (iii) combat HIV, prospects for Ethiopia AIDS, malaria, and other communicable diseases. Human capital is essential for the survival and evolu- tion of any society. Good health is the most essential Incorporating ICT in the health sector will allow Ethio- of a country’s assets for effective social and economic pia to improve the delivery of health-related services development. In Ethiopia, 60-80% of health-related and contribute to achieving the GTP and MDGs. Ini- problems stem from infectious diseases and malnour- tiatives such as eHealth helps health practitioners to ishment.151 The World Health Organization (WHO) and tailor their services to communities based on explicit the Ethiopian Ministry of Health (MoH) have repeat- needs. eHealth enables medical specialists to conduct edly stated that there are not enough doctors and remote health consultations and provides the follow- health workers to care for the country’s 82.8 mil- ing benefits: (i) allows for diagnosis and treatment lion people. The MoH reports that “even though a using the latest health science evidence; (ii) facili- health center is needed for every 25,000 people, as tates communication among health professionals for of July 2010, only 2,104 health centers were available evidence-based medicine; (iii) strengthens monitor- nation-wide,” which amounts to almost 40,000 peo- ing and control of disease outbreaks; and (iv) increases ple per health clinic.152 The government has pledged administrative and management efficiency within pri- to construct 2,951 additional health centers, of which mary, secondary, and tertiary care. 695 are currently under construction. Even with such efforts, there is an urgent need to accelerate out- In 1998, the Government of Ethiopia launched the reach to underserved populations. ICT for health can Health Sector Development Program (HSDP), which offer a solution to this need. aimed to create a “a cost-effective and efficient system that is able to better respond to the coun- Ethiopia’s healthcare system faces many challenges. try’s needs by tackling health challenges that affect About 85% of the population lives in rural areas where its citizens the most.”150 Many of the HDSP’s compo- health care services are not readily accessible. Al- nents, such as health services delivery, pharmaceu- though 92% of the population has access to healthcare tical services, information, education and commu- services, only one-third make use of these services.153 nication, health management information systems, and monitoring and evaluation can be strengthened 151 Lemma et al. “Survey of Current Efforts and Poten als in Applica on of through the use of ICT. Ethiopia, in partnership with Telemedicine in Ethiopia,” Interna onal Symposium on ICT educa on and applica on in Developing Countries, Session VI, 2004. Available: h p:// www.ictes2004-gs t.edu.et/session%20VI_fullpapers/Survey%20of%20 149 Growth and Transforma on Plan. Availablae: h p://www.ethiopians current%20poten al%20TeleMedicinePaper_Samuel%20-%20Fikreyo 46 .com/Ethiopia_GTP_2015.pdf hannes%20Lemma.pdf 150 Italian Development Coopera on in Ethiopia, “Ethiopia Health Sector 152 Health Facili es Construc on and Rehabilita on. Available: h p://www Development Program,” 2005 Available: h p://www.itacaddis.org/italy/ .moh.gov.et/English/Informa on/Pages/HealthFacilityConstruc on.aspx index.cfm?fuseac on=basic_pages.basic_page&page_name=56 153 Source: Federal Ministry of Health of Ethiopia. FIGURE 5: Health environment in Ethiopia 70 60 50 Birth rate, crude (per 1,000 people) Health expenditure per capita (current US$) 40 Health expenditure, public (% of total health 30 expenditure) Health expenditure, total (% of GDP) 20 Life expectancy at birth, total (years) 10 0 2007 2008 2009 2010 2011 Source: World Development Indicators, World Bank The country has a high rate of non-epidemic yet com- by health care providers and pharmacists contrib- municable diseases, such as diarrhea and pneumonia. utes to reducing errors in diagnosis, treatment, and According to The World Bank, health expenditures prescriptions.156 In Ethiopia, Tulane University and per person totaled US$15 in 2010 and US$17 in 2011. Dimagi, a technology company, have piloted an EMR Only 4.7% of the country’s GDP was spent on public system called SmartCare, which supports longitudinal healthcare services.154 The chart above summarizes recordkeeping for HIV/AIDS treatment, care, Volun- the health environment in Ethiopia. tary Counseling and Testing (VCT), and prenatal care. The system hosts a large catalog of reports which in- Despite such challenges, the MoH has reported the clude health management information systems and country is making good progress towards meeting the PEPFAR reports, early warning indicators, treatment MDGs for control of HIV/AIDS, and malaria, by 2015. failure lists, and individual patient summaries. The By 2011, maternal and infant mortality rates had de- SmartCare system was implemented in one federal clined to 268 per 100,000 and 49 per 1000, respec- hospital, nine regional hospitals, and 18 health cen- tively.155 In addition, there is a strong commitment ters. An additional federal hospital and 52 health cen- from local and national authorities to improve the ef- ters also began the implementation of the SmartCare ficiencies of the health sector, with several projects system,157 with a 69% implementation rate achieved embracing ICT for healthcare services. by 2010. Since then, over 100 clinics and hospitals in the Dire Dawa region, covering the entire area, have also successfully deployed this system.158 The MoH is Healthcare Solutions for continuing to digitize health records and new health Ethiopia records are being entered into their database. The initiative is still in a pilot phase, but is expected to be Electronic Medical Records more widely deployed in 2014.159 Successful comple- tion of the initiative will have the following benefits: An important area for health system improvement (i) doctors have access to complete health records; is the introduction of Electronic Medical Records (ii) medical records are more secure and kept safely; (EMR). An EMR system provides an efficient approach (iii) files are stored in a standardized manner; and to using and storing health data, information, and (iv) patient waiting time is decreased. knowledge. Evidence shows the use of mobile EMR and national Electronic Health Record (EHR) systems 156 Commi ee on Quality of Health Care in America, Ins tute of Medicine, “Crossing the Quality Chasm: A New Health System for the 21st Century” 154 Source: World Development Indicators, World Bank. (2001). Available: h p://books.nap.edu/catalog.php?record_id=10027 Ethiopia Ministry of Health: Health Sector Development Program III An- 47 157 155 The Ethiopia News Agency, “Na on Moving Confidently to A ain MDGs Health Targets: Ministry,” published 26 April 2011. Available: h p://www. nual Performance Report (2009/2010) p 89. ena.gov.et/EnglishNews/2011/Apr/26Apr11/139163.htm and World De- 158 h ps://publica ons.theseus.fi/handle/10024/36264 velopment Indicators, World Bank. 159 h p://federaltelemedicine.com/?p=1448 Health Geographic Information System (HGIS) services map the health data using GIS.163 In addition the ministry is working on the GIS for EMONC facilities In January 2008, the MoH developed a strategic plan to help locate availability of signal function in health for the development of a monitoring and evaluation facilities. system and health information systems (HMIS).160 The plan outlined a comprehensive roadmap for the ex- Logistics management information systems ecution of HIS, including implementation require- ments, challenges, and a budget. The MoH has imple- Logistics management information system is a tool mented HMIS in more than 70% of all health facilities. used to plan the central procurement and distribution However, the World Health Organization (WHO) esti- of pharmaceuticals to regional and district levels of mated the availability of resources for the completion the healthcare system. The system will be linked to of the plan was inadequate.161 Therefore, in order to the Ministry of Finance’s Integrated Financial Manage- achieve the Government’s plan of developing a HIS ment Information System (IFMIS) to account for the and monitoring and evaluation system the capacity of transfer of medicines. Currently the system is limited local Ethiopian hospitals and health centers needs to to electronic orders made through the Pharmaceuti- be strengthened. cal Fund Supply Agency (PFSA). However, the next phase will integrate the PFSA procurement system. The Ethiopian Health and Nutrition Research Institute (EHNRI) is piloting the National Disease Surveillance Patient tracking Information System that will send reports from health facilities to EHNRI, which will use GIS to map disease Consistent and efficient record-keeping is essential case reporting to within one square kilometer area.162 to extend the reach of health systems into rural and The MoH has developed a geographic information sys- underserved communities including the urban poor, tem which contains information about the location of women, elderly, and the disabled. For example, in all health facilities. The HGIS will be linked to the Kenya, programs such as ChildCount+, are used to Public Health Emergency Management System and register pregnant women and children under five Health Network Alert. These systems will come into years of age and to collect basic information about action when a medical crisis develops in any part of their health, which guides community health workers the country. This application will combine informa- to prioritize visits.164 tion from available medical stocks with disease spe- Mobile Health (mHealth) cific information and logistical capacity. The system is being developed by the Ethiopian Health Administra- Mobile phones have an increasing role in the health tion Research Institute. Beyond emergency situations agenda and programs such as mobile health (mHealth) and disease outbreak reporting, geographic informa- increase the capabilities and capacity of community tion systems can be used for a variety of other tasks, health workers and often the quality of care. This ini- such as more effective malaria prevention, logistics tiative can reduce the overall cost of care, includ- of distribution of supplies, or health data mapping. ing the health system cost associated with treating For instance, Tulane University is partnering with and managing chronic conditions such as HIV/AIDS. the Ministry of Health to create geographic informa- mHealth offers health workers new tools for monitor- tion systems to monitor HIV/AIDS care and treatment ing health risks in remote and/or non-traditional set- tings. For instance, Magpi (formerly known as EpiSur- veyor), an open-source surveying tool, helps public 160 Federal Ministry of Health, Ethiopia – HMIS Reform Team, “ Health health workers in many countries to collect valuable Management Informa on System and Monitoring and Evalua on: Stra- tegic Plan for the Ethiopian Health Sector, 2008. Available: h p://phe- ethiopia.org/pdf/Health%20Managment%20Informa on%20System%20 %28HMIS%29.pdf 161 Woldmariam Hirpa et al, “Implementa on of an Integrated Health Man- agement Informa on System and Monitoring and Evalua on System in 163 Geographic Informa on Systems for Monitoring HIV/AIDS Care and Ethiopia: Progress and Lessons from Pioneering Regions,” Quarterly Health Treatment Services and Network in Ethiopia, h p://www.docstoc.com/ Bulle n, 2010. h p://www.who.int/healthmetrics/library/countries/ETH_ docs/49718499/Geographic-Informa onSystemforMonitoringHIVAIDS HIS_LessonsLearned.pdf Care-nd ChilCount+, a Community Health Events Repor ng and Alerts System, 48 164 162 Ethiopia Ministry of Health: Health Sector Development Program III An- nual Performance Report (2009/2010) p 6. h p://www.childcount.org/ data and health information.165 To date, more than Research has found that the use of videos can have 20,000 users in over 170 countries have registered to a significant impact on local community develop- use the Magpi application and now more than 50,000 ment and stimulates discussion on vital issues.170 To data records are uploaded each month. promote health discussions in remote areas in Ethio- pia health workers can play educational videos with During natural disasters, mHealth applications, such as a simple video players (e.g., DVD players). Videos can crisis map, can help relief agencies and health systems be produced on any basic computer and easily shared target resources. A crisis map is built using real-time with health centers and health workers. Video, radio, data from incident reports submitted via SMS, web, and and television can thus be leveraged within the health email. Ushahidi developed a crisis map of Haiti in the sector to respond effectively to local needs. aftermath of the devastating earthquake of 2010.166 It represented the most comprehensive and up-to-date The use of biometrics in health view of humanitarian issues including public health in- cidents, infrastructure damage, natural hazards, secu- The World Bank supports a number of projects which rity threats, and services available. In total, over 3,000 use biometrics to identify and verify national identifi- urgent and actionable reports were mapped following cation for citizens. One project that stands out is the the earthquake, informing the actions of responders and Rashtriya Swasthya Bima Yojna (RSBY) health insur- prioritization of resources on the ground in Haiti. ance program in India, which covers hospitalization costs for the poor. In the past, poor individuals were Additionally, mHealth can be used for health financ- excluded from provision of health services if they ing. For example, Kenya’s Changamka allows users to could not verify their identity. RSBY used biometric pay into health savings accounts using mobile money data (two fingerprints collected on a smart card) to services such as M-PESA and then allows them to draw resolve this issue. It was effective because it was on these accounts to purchase health services.167 free, paperless, and offline.171 The cards were issued by the Indian company FINO and were handed out to Capacity building and skill enhancement beneficiaries on the spot. Today, there are over 37 million active smart cards. In most states, 75% of the One of the most utilized forms of media used for public costs associated with the program are covered by the awareness campaigns and consultation on many health government and the remaining 25% are covered by re- issues in Ethiopia is the radio. Radio is used as an open spective state governments.172 forum to educate Ethiopians on health issues and to host specialists to discuss particular health issues. Such programs also permit their audience members to High-growth potential call in with questions related to the health topic be- ing discussed to address their concerns.168 In addition, technologies for healthcare there are radio programs which raise awareness on service delivery health issues, such as HIV/AIDS. For example, in Ne- pal, there are two radio edutainment programs, one, Telemedicine “Service Brings Reward” targeted at health workers, and another, “Cut Your Coat According To Your Cloth,” The Government of Ethiopia has long recognized the aimed for the general public. These two programs try importance of telemedicine and committed itself to to improve the image of health professionals and in- its implementation. In 1994, SatelLife, the Ethiopian crease the demand for professional medical help. The Telecommunications Corporation, the Pan-African De- programs also offer consultations on HIV/AIDS, child velopment Information System, the United Nations and maternal health, and immunizations.169 Economic Commission for Africa, and the Addis Ababa University established the HealthNet system. The system initially connected units within the medical 165 EpiSurveyor, h p://www.episurveyor.org/user/index 166 The 2010 Earthquake in Hai , h p://hai .ushahidi.com/ 167 Changamka MicroHealth, h p://changamka.co.ke/ 170 S. Batchelor et al, “Community Television for the Poor: A Scoping Study 168 TV programs such as “Tenachen” could provide a similar service. Final Technical Report,” 2005. Available: h p://www.tv4d.org/commtele_ 169 Ins tu onal Review of Educa onal Radio Dramas: Case Study 8: Nepal final_report_vs_97.pdf (Cut Your Coat and Service Brings Reward), h p://www.comminit.com/en/ Robert Palacios, World Bank. 49 171 node/1693 172 RSBY Program, h p://www.rsby.gov.in/how_works.html department of the University, but has since expanded • Clinical decision support. The AIDS Resource to over 60 locations throughout the country.173 Center, in collaboration with its partner organi- zations, has been providing consultation services In 2006, the former Ethiopian Information and Com- by phone for HIV/AIDS health care profession- munication Technology Development Agency (EICTDA) als throughout Ethiopia. The Resource Center, and Telecommunications Consultants India Limited located in Addis, has various experts, including (TCIL) signed an ETB 2.1 million agreement to es- internists, general practitioners, pharmacists, tablish telemedicine and tele-education centers.174 laboratory technicians, psychologists, and social Through VSAT systems, the project provided Internet workers, who take phone calls from health work- and digital TV services, telemedicine, and interactive ers in the field. Currently, they are working to set distance learning access to regional towns.175 Tele- up a short code system to add text messaging for medicine and tele-education facilities were set up in the same purpose to benefit areas with low net- one university and six hospitals. Knowledge centers work coverage. Other countries have managed to were established at Bishoftu and Durame Hospitals.176 scale-up such systems for consumers and health In 2007, Ethiopia became the first country to partici- workers seeking medical advice through ICT. In pate in the Indian Space Research Organization (ISRO) India, the Health Management and Research Insti- Project that provided telemedicine links between tute (HMRI) has the program 104 Advice, an inte- Ethiopia and ten leading specialist hospitals in India grated medical call center in Andhra Pradesh that via satellite. This model was later replicated in Bo- has served more than 10 million callers to date. tswana (2009), Nigeria (2009), and Rwanda (2008).177 In rural areas where costs associated with seeking treatment at a medical facility are high, roughly Mobile Phones 55% of requests for outpatient care are unmet but can be treated by medical call center advice like The Ministry of Health is exploring possibilities to use that offered by 104 Advice.180 mobile phones as a platform to deliver training and • Disease prevention. Several mobile technolo- public services. Potential benefits of using mobile gies can be used to inform consumers and pa- technologies are analyzed below. tients about short- and long-term health risks. In Haiti, the Trilogy/International Federation of the • Treatment support. mHealth applications can Red Cross’ Emergency Relief Application delivers help patients manage their treatments when targeted SMS public health advisories to at-risk health workers may be unavailable, too costly, or populations. This was an important tool for dis- difficult to obtain regularly, as in some rural areas seminating information in the wake of the cholera of Ethiopia. For example, in Kenya, the WelTel outbreak and tropical storms that followed the application provides SMS-based treatment ad- devastating earthquake of 2010. The application herence messaging to monitor and support AIDS- is now available for global deployment.181 related virus (ARV) patients. WelTel’s messaging • Education and awareness. mHealth services help raised ARV patients’ adherence to their treat- consumers to adopt healthy habits and navigate ment regimens by 25%.178 The WelTel SMS program significant health events, such as giving birth. contributes to an estimated 1–7% savings in total For example, Text to Change, which originated in health system costs over time.179 Uganda, uses incentive-based quizzes sent via SMS to educate, empower, and engage individuals on health-related issues such as HIV/AIDS.182 Games and quizzes, as well as other non-traditional 173 Reaching the Unreachable: The Role of HealthNet Ethiopia in Dissemi- na ng Electronic Health Informa on Resources, h p://onlinelibrary.wiley mechanisms, are being used in several countries .com/doi/10.1002/bult.218/pdf 174 Peter Lange, “Africa Convergence of Telecommunica ons and Digital Media,” A Buddecomm Report, 5th Edi on, 2010 175 ibid 180 HMRI’s 104 Advice: 24/7 Toll Free Health Helpline, h p://www 176 Ethiopia Ministry of Health: Health Sector Development Program III An- .stockholmchallenge.org/project/2010/hmris-104-advice-247-toll-free nual Performance Report (2009/2010) p 89. Health-helpline 177 Peter Lange, “Africa Convergence of Telecommunica ons and Digital 181 Canadian Red Cross, “Groundbreaking tex ng applica on created for Media,” A Buddecomm Report, 5th Edi on, 2010. Hai now available for global deployment,” Press Release, February 10, 50 178 Richard Lester et al, “Effects of a mobile phone short message service on 2011. Available: h p://www.redcross.ca/hai 2010/news-room/news- an retroviral treatment adherence in Kenya: a randomised trial.” Lancet, room-ar cle-19.asp 2010 Nov 27; 376(9755):1838–45. 182 Text to Change: Simple in Concept, Powerful in Result, h p://www 179 WelTel, h p://www.weltel.org/ .tex ochange.org/ TABLE 13: Disbursements for mHealth and eHealth ini a ves in 2010185 Dedicated mHealth eHealth funding focused Other general eHealth Source of funding funding on mHealth funding Non-profits $ 9 600 000 $ 1 600 000 $ 400 000 Donors $ 2 400 000 $ 170 000 $ 3 100 000 For-profits $ 1 400 000 $ 600 000 None documented Mul lateral agencies None documented $ 6 800 000 $ 400 000 Governments None documented $ 25 000 $ 5 600 000 Total $ 13 400 000 $ 9 200 000 $ 9 500 000 to convey health and information. Young Africa Live, a social networking platform hosted by the Recommendations for sector Vodacom Live portal in South Africa, offers in- development formation related to HIV and other health issues through entertainment and popular culture. In its ICT-enabled management and administration of first two years, the portal generated over 32 mil- healthcare recommendations lion page views and over 1 million comments.183 • The profound impact that these applications As part of the country’s eHealth strategy the Ministry can have on living standards has led leaders to of Health can use ICT to improve their efficiency. The substantially invest in mHealth initiatives. Coun- following recommendations focus on three aspects: tries with the most acute needs often perceive shared infrastructure, digitalization of health and mHealth as an essential tool for their develop- medical records, and access to sustainable finance as ment. Considering the still active increase in Ethio health insurance. Telecom mobile subscribers over the past year (35% increase, with over 23 million subscribers Shared Infrastructure: Better treatment planning total), mHealth is a highly promising area for and coordination between health facilities and agen- Ethiopia.184 International donor disbursements for cies can be improved through shared infrastructure, initiatives such as mHealth and eHealth in devel- which will allow maintenance of centralized health oping countries underline the widespread popu- records and access to medical databases and records. larity of using ICT in the health sector: This can be successfully achieved by integrating in- ternal information storing and processing tools into a connected system. Although the task is ambitious and Community access points requires replacing paper-based processes with elec- tronic systems, it will significantly reduce associated Research findings from African countries show that costs for the health sector in the long run. access to information about widespread diseases such as HIV/AIDS represents a major concern. Providing Digitization of Health and Medical Records: Digita- individual training on disease risks can be expensive lization of processing and storing health and medical and challenging. In this context, community access records can significantly reduce medical errors, costs, points can serve as information centers for health and staff time. Ethiopia should work further on digi- workers, teachers, and interested individuals to learn tizing health records and invest in equipping health about health. facilities with electronic clinical management tools. Access to Sustainable Finance: Despite a number of successful initiatives already launched in the health sector, per capita health spending in Ethiopia averages Young Africa Live, h p://www.praekel ounda on.org/young-africa- 51 183 live.html, accessed March 2012 at around US$17 which is below what the World Health 184 World Bank research Organization considers to be a minimum to provide 185 World Bank research basic health services. Moreover, health expenditures TABLE 14: Overview of poten al applica ons of ICT in the health sector186 ICT for health main areas Key technologies Professional Clinical Electronic Pa ent/Health Consumer Health Informa cs New Technologies Informa cs Records (EPR, EHR) - Decision aids for pa ents - Satellite Communica ons - Decision aids for - Electronic medical facing difficult choices (gene c (for remote medicine ) prac oners records (Record linkage, screening) - Wireless technologies (prompts, reminders, care the Universal - Informa on on the Web (within hospitals, across pathways, guidelines) Pa ent Indicator, and/or digital TV (public geographical areas) - Clinical management tools databases and informa on and educa onal - Palmtop technologies (for (electronic health records, popula on registries) tools for specific clinical informa on, for records) audit tools) - Achieving mul - groups) - New mobile telephones - Educa onal aids professional access. - Clinician-pa ent - Digital TV (for dissemina ng (guidelines, medical Technical and ethical communica on tools: health informa on & teaching) issues. 1. Remote: Clinical e-mail and communica ng with pa ents) - Electronic clinical - Data protec on/security Web-based messaging systems - The WWW and its communica ons tools issues for consulta on, disease applica ons for health (issues: (referral, booking, - Pa ent access and control monitoring, service-oriented quality control, discharge; correspondence, - Integra on with other tasks (appointment booking, confiden ality, access) clinical email/second services (social work, prescrip on reordering). - Virtual reality (remote/ opinion, laboratory police) 2. Proximal: Shared decision transcon nental surgery) test reques ng/results - Clinical coding issues making tools, informed - Nanotechnology repor ng, e-shared care) (terminologies) consent aids - Intersec on of - Electronic networks 3. Mixed: On-line screening bioinforma cs and (disease specific clinical Healthcare Business tools (for depression) and health informa cs. networking systems) Management therapeu c interven ons -Discipline/disease specific - Billing and tracking (cogni ve behavior therapy) tools (HIV/AIDS informa cs) systems - Access and equity issues - Telemedicine applica ons - Audit & quality (data protec on issues, the (for inter-professional assessment Digital Divide) communica on, pa ent systems - Quality issues for health communica on, and informa on on the net remote consulta on) - “Virtual” health communi es - Subfields (nursing & primary care informa cs) are often financed out-of-pocket by the largely impov- introduce mobile money services which will allow erished population. In this context, Ethiopia should patients to access their accounts to purchase health continue improving its national health insurance sys- services. Similarly, building on the initiative to collect tem, which will guarantee access to basic services. citizen biometric data to create a taxpayer database, In terms of financing health services, Ethiopia could a national biometric smart card-based health insur- ance system can be created. The smart cards can also be used for identification purposes. Naturally, data 186 Adapted from World Bank research and Pagliari, et al. 2001. security and privacy concerns should be addressed. 52 TABLE 15: Summary of recommenda ons in priority order for strengthening health systems with ICT in Ethiopia RECOMMENDATION Area Back-office Services to Ci zens a. Laws, policies, regula ons, -- -- strategies b. Ins tu ons, en es, agencies b.1 Strengthen the Ministry of Health b.2 Strengthen health units c. Incen ves, promo on c.1 Provide incen ves for insurance c.2 Reduce me and costs of health companies services delivery to pa ents d. Infrastructure, connec vity d.1 Employ biometric (smarts card- d.2 Implement an eHealth/ mHealth based) health records system pla orm e. Services (enablers) e.1 Digi ze medical records e.2 Employ authen ca on/eID based on biometrics e.3 Telemedicine f. Skills, training, capacity building -- f.1 ICT training for medical staff g. Processes and procedures g.1 Foster interagency coordina on -- h. Access to finance h.1 Explore a PPP model for a na onal -- health insurance system 53 ICT for Agriculture and Rural Development Stock-taking of the their business and reducing waste. At the same time, there are still vast networks of farmers, traders, buy- agricultural sector in Ethiopia ers, agribusinesses, agro-dealers, seed producers, and other stakeholders that are currently not benefitting Despite the growth of the service sector, agriculture from shared information and knowledge. Therefore, a still remains the single most important sector of the range of ICT options need to be explored to facilitate Ethiopian economy. Ethiopia’s agricultural sector ac- efficient systems for sustainable delivery of relevant counts for some 48% of its GDP and 85% of both its and timely information. employment and exports.187 According to World Bank data, around 36% of the land area of Ethiopia is de- Ethiopia has already implemented a number of voted to agriculture, which is more than 400,000 sq. agriculture-related ICT initiatives. For instance, in km. In 2012, over 76 million people out of a total pop- 2008, the Ethiopia Commodity Exchange (ECX) was ulation of around 92 million were involved directly or set up, which offers ICT-enabled market information indirectly in the agricultural sector, including subsis- and trading systems for connecting buyers and sell- tence farmers. Among the current most pressing is- ers.190 Since 2008 ECX has processed over US$2.4 bil- sues of the agricultural sector are frequent droughts, lion in trade volume with over 350 trade members especially as a result of climate change and increasing involved.191 Similarly, in 2005, the International Live- desertification, poor agricultural practices, and lim- stock Research Institute started a project entitled ited private sector investment. Food prices comprise Improving Productivity and Market Success. Within around 60% of the national consumer price index, so this project, 28 information centers were established food security is also a critical component of general to provide farmers with vital information on growing political stability.188 The Growth and Transformation crops and to facilitate farmer-to-trader contacts.192 Plan targets to increase the agriculture value added by 33%, with exports of coffee—Ethiopia’s main ex- The Ethiopian Livestock Market Information System is port product—slated to almost double in value while another system that provides regular livestock prices exports of meat could increase tenfold.189 The coun- and volume information on major livestock markets tries of the Arabian Peninsula are emerging as a ma- via SMS, email, radio, and Internet. Livestock prices jor market for Ethiopia’s meat exports with livestock and volumes are collected through interviews with transported across the Straits of Hormuz before being traders. The livestock market monitor collects data slaughtered locally according to Halal dietary laws. on five cases of each of the dominant animal breed, Such trade is highly dependent on the use of ICT for class, and grade combination during the peak of a just-in-time delivery. market day. Considering the economic importance of the agricul- One specific advantage of mobile phones for use in tural sector, it is crucial to have up-to-date innovative agriculture is their ability to use location data. As an technological solutions that will increase output, make example, the Road Data Development Project col- the market more efficient, and enable smallholder lects road data on Personal Digital Assistants (PDAs, farmers in particular to manage their businesses more such as tablet computers) with the help of UN staff. effectively. In rural areas, access to timely market information improves farmers’ decisions of where and 190 Joachim von Braun: ICT for the Poor at Large Scale: Innova ve Connec- when to sell, thereby increasing the profitability of ons to Markets and Services & Kris n Davis et al: In-Depth Assessment of the Public Agricultural Extension System of Ethiopia and Recommenda- ons for Improvement 191 ECX Press Release, Ethiopian Commodity Exchange Named as CIO 100 54 Source: World Bank Data. Recipient for the 24th Annual Award Program, June 2011 and h p:// 187 188 Source: Economist Intelligence Unit. allafrica.com/stories/201308090900.html 189 Growth and Transforma on Plan, h p://www.ethiopians.com/ 192 The Center of Informa on, h p://ictupdate.cta.int/en/Feature-Ar cles/ Ethiopia_GTP_2015.pdf The-centre-of-informa on The handheld GPS-enabled PDA units receive location for interaction and South-South learning. For in- information from satellites, allowing staff to record stance, the Fodder Adoption Project organized an the coordinates of the roads they use, note their con- end-of-project meeting for project participants dition, and describe whether they are temporarily from Ethiopia, Syria, and Vietnam to draw lessons blocked by obstacles. The data uploaded on the main and share results. Similarly, the Nile Basin De- transport arteries can then be meshed with other re- velopment Challenge (http://www.nilebdc.org), ports such as irrigation equipment, water reservoirs, funded under the CGIAR Challenge Program on community grain stores, fertilizer warehouses, and work and food, is working with numerous national agricultural extension offices.193 This allows agricul- partners and a group of international centers to tural extension workers and other rural development improve the resilience of rural livelihoods in the professionals to make informed decisions when plan- Ethiopian highlands. Web-based applications are ning seasonal travel. used in the project to support interaction and sharing among project team members and to There are a number of other ICT-based agricultural communicate messages to wider audiences and programs either being planned or underway: stakeholders. • Agri-Net is a new ICT initiative focused on the Among other donors, Finland has been an important provision of agricultural information. This service partner for Ethiopia since the 1930s. Finland has as- is currently in the planning phase, and the Gov- sisted with the Rural Water Supply and Environmental ernment of Ethiopia was expecting to begin roll- Program (RWSEP) in Amhara (ending in 2010) and also out of the program in late 2011. started supporting the Rural Water Supply, Sanitation • Among other projects, the World Bank-managed and Hygiene Program in Benishangul-Gumuz in 2008. and multi-donor-funded Agricultural Growth Proj- Currently, Finland is involved in supporting watershed ect, aims to increase agricultural productivity and and natural resources management in Amhara through market access for key crop and livestock products the Tana and Beles Integrated Water Resources Devel- in targeted woredas with increased participation opment Program. of women and youth. • The World Bank is currently implementing the second phase of the Pastoral Community Devel- Global trends and prospects opment Project, with a planned investment of US$56.6 million, which aims to increase the resil- for Ethiopia ience of Ethiopian pastoralists to external shocks Mobiles and agriculture and to improve the livelihoods of targeted com- munities. Among other components, the project Mobile phones are used for a wide variety of will improve the existing Pastoral Early Warning agriculture-related tasks, including relaying price System, establish an early response fund and sup- and insurance information, market linkages, distance port strategic disaster preparedness and mitiga- education, resource management and rural finance. tion investment planning and financing of associ- The common theme of all agricultural mobile appli- ated activities. cations is “access”, be it access to information, job • A rural capacity-building project, in the amount opportunities, price information, governance and so of US$54 million, contains an ICT component that on. A summary of potential benefits of using mobiles is designed to strengthen the capacity of the Min- for rural development is presented in Figure 6 on the istry of Agriculture to coordinate, monitor, and following page. evaluate initiatives in the agricultural sector. The project will also support the Ethiopian Agricultural One specific example of research on the impact of Commodity Exchange. market information systems in Ethiopia comes from • The CGIAR (Consultative Group for International Jaleta and Gardebroek 2007,194 who presented re- Agricultural Research) has a number of projects search on tomato farmers’ negotiations with rural that use social media to increase possibilities traders. This showed that on average farmers’ initial asking price was about three times higher than the 193 Road-related part of the Ethiopia Road Sector Development Program 55 Support Project. h p://web.worldbank.org/external/default/main?noSUR Jaleta, M., and G. Gardebroek. 2007. “Farm-gate Tomato Price Nego a- 194 L=Y&theSitePK=1324361&pagePK=64253958&contentMDK=21780571&p ons under Asymmetric Informa on in Ethiopia.” Agricultural Economics iPK=64252979 36(2):245–51. FIGURE 6: Poten al benefits of using mobiles for rural development Market information Better prices, more Better access to market-oriented produce information Climate, disease Better disaster/risk information management Agricultural techniques Higher-yield production Increased income for Better access to rural and good practices smallholder farmers extension and advisory services Reduced transaction, Extension services Accurate assessment of logistical and pasture health distributional costs Linking farmers, suppliers Minimize exploitation for input suppliers and buyers directly by middlemen Improved traceability Improved market linkages Greater efficiency and and quality standards and distribution predictability for buyers Better recording, Reduced admin costs accounting & traceability New oportunities Reduce fraud for financial institutions Credit Higher-yield, more (Better) access to finance Insurance diversified production, less losses Payment method Source: The World Bank, 2010. final price they obtained from buyers. Yet when farm- Syngenta, Safaricom provided the data transmis- ers had market price information—typically obtained sion discount, and the IFC invested US$2.5 million by a mobile phone call to acquaintances close to the in farmers’ education. Research shows that higher central market—the difference between their initial yield growing for smallholders facilitated by in- asking price and the final price was reduced by 16.5%. surance could eventually double farmer incomes. In other words, market information increased farm- In rural areas, which are particularly vulnerable ers’ bargaining power by one-sixth. to weather conditions, this application can sig- nificantly lower farmers’ losses. International experience and examples confirms how even simple mobile applications can change the life • Veterinarian services of farmers: A mobile application entitled “E-Dairy”, used in- ter alia in India and Kenya, enables dairy farmers • Agricultural insurance to request veterinarian services via SMS. The ap- Kulimo Salama is a project developed in Kenya plication targeted a 30% increase in production by to enable local farmers to insure their farm in- providing access to veterinarian services. Farmers puts against drought and excess rain.195 Payouts used pre-assigned codes to order vet services, and can be partial and depend on the scale of the vets responded to farmers directly. The Dambad- disaster; the more extreme the drought or ex- eniya Development Foundation (DDF) developed cess rain is, the larger the payouts are. Mobile the technology, while the government-owned In- phones are used to link farmers, agents, and in- formation and Communication Technology Agency surance companies. Farmers receive an SMS for (ICTA) funded 50% of the initial investment cost of initial contract confirmation using the M-PESA a pilot project (US$50,000). The cost of operation mobile platform. To insure their product, farmers of this service is US$6,000 per year, and farmers pay 5% of the input cost. Servers, weather sta- only pay the costs of SMS. The expectation among 56 tions, and information services are provided by the farmers is that the service will remain free, though current research suggests that farmers 195 Kulimo Salama, h p://kilimosalama.wordpress.com/ may also be willing to pay for the service. • Transactional support facilitates and tracked payment following a suc- TradeNet is a service launched by Dialog, Sri Lan- cessful buyer-seller transaction, ensuring credit ka’s leading mobile services provider, in Decem- is repaid and payment to producers is both secure ber 2009 to forward agricultural commodity price and accurate. In addition, buyers are informed information via mobile phones.196 The application about what is planted, allowing them to estimate provides farmers with the ability to access up-to- production and plan accordingly. Buyers are also the-minute prices for agricultural commodities, able to monitor progress during crop cycles and thereby reducing information arbitrage. Farmers pass on important extension information to grow- can currently subscribe to receive up to five price ers. Agro-dealers are updated on which products alerts for five vegetables and fruits from each of to stock at what time, and producers are informed the three markets covered, including the Dam- of collection dates and locations far in advance bulla Dedicated Economic Centre (DDEC), which of the harvest. DrumNet’s income is derived from handles nearly 80% of wholesale trades in the membership fees, a 10% interest on farm input country. Information on the TradeNet platform is loans, and a 10% commission on all produce con- disseminated via multiple digital communication tracted and sold through the DrumNet model. technologies such as SMS, Unstructured Supple- Rapid growth of the subscriber base has demon- mentary Service Data (USSD), and the web. Cur- strated a high demand for the project’s services. rently use of all these interfaces is free. Farmers located between 10 and 15 km from their closest RFIDs and agriculture market who used this service were able to get a premium of 23.4% on the price per kg of their Radio Frequency Identification (RFID) refers to devices produce in 2010.197 consisting of a chip and antennae which are used to provide unique identifiers and track people, assets, • Access to financial services inventory, and other objects. RFIDs are widely used in Mobile applications such as M-PESA in Kenya or animal identification management: SMART Money in the Philippines are widely rec- ognized as an efficient means of administering • The Canadian Cattle Identification Agency is now payments and money transfers. The implementa- actively introducing RFID tags;199 tion of an automated village well water supply • The US Department of Agriculture has been using system in Kenya, for instance, depends entirely RFID tagging for the National Animal Identifica- on the use of M-PESA. Villagers purchase an elec- tion Program.200 Automation and greater reliability tronic pump key to access safe and automatically brought by the use of RFIDs benefit both sellers pumped ground water, instead of having to walk and customers. distances to collect water from a hand-pumped • In Uruguay, livestock tagging with RFID chips is well. Recharges are done at a minimum of KS100 used as part of the national livestock identifica- (US$1.05), sufficient for at least 20 jerry cans of tion system for control of foot and mouth disease, water. Payments flow directly to the system ac- as well as for food safety and quality assurance.201 count, which then pays for a maintenance con- tract and repays the community loan for the Among the large number of benefits that RFIDs bring well.198 are improved security of traceable objects, supply availability control, labor cost reductions, and faster • Supply chain management services (such as more efficient scanning at check- The main objective of the DrumNet project (also out points). RFID tags can be incorporated into the in Kenya) is to facilitate cooperation between all food production and supply process to monitor hu- the agricultural supply chain partners—includ- midity and storage temperature. Moreover, informa- ing producers, buyers, processing plant, trans- portation, banks, and input retailers. DrumNet 199 Canadian Ca le Iden fica on Agency, h p://www.canadaid.com/ about_us/about_us.html 200 US Department of Agriculture Approves RFID Livestock Tagging System, 196 Dialogue TradeNet—Agricultural Commodity Prices via Mobile Phones, h p://www.rfidnews.org/2006/08/04/us-dept-of-agriculture-approves- h p://ict4d-in-srilanka.blogspot.com/2009/12/dialog-tradenet-agricultural- rfid-livestock-tagging-system 57 commodity.html 201 Janssen, Willem (2012) “ICT and agriculture in the World Bank Group, 197 Source: World Bank research. presenta on given at the launch of the ICT in agriculture eSourcebook, 198 Source: World Bank research. 28 January 2012, Washington DC, see www.ICTinagriculture.org. tion on food ingredients can help reduce the risks of Satellite mapping can identify with extreme precision poisoning.202 the nature of soils and allows experts to recommend particular crops for specific soils across the country. A specific African example of RFID tagging of live- Geospatial imagery collected from satellites can be stock, which has relevance and possibly replicability used for crop forecasting, erosion management, and for Ethiopia, is in Namibia and Botswana.203 The Na- the durability of harvesting to changing environmen- mibian Livestock Identification and Traceability Sys- tal conditions. In order to put these services in place, tem (NamLITS) was established in early 2005 in an adequate capacity building and training activities for area covering the Northern Communal Areas (NCA) of institutions such as Ethiopian Institute of Agricultural the country. Namibia has around 2.5 million cattle of Research (EIAR) must be implemented. which just over 70% are in the NCA. The implemen- tation of the program was designed to increase the Ethiopia is one of 11 Sub-Saharan countries partici- region’s contribution to GDP and to ensure food se- pating in the Climate Change Adaptation and Devel- curity. Tagging is done by means of an RFID tag in the opment Initiative (CC-DARE).207 This provides demand- left ear and a conventional visual tag in the right ear. driven technical and financial assistance to improve Funding is provided from the US government via the the ability of these countries to remove barriers and Millennium Challenge Corporation. create opportunities for integrating climate change adaptation into national development planning and Several dozen international companies are reportedly decision-making frameworks. Ethiopia is one of five ready to provide RFID solutions for Ethiopia.204 In 2011 pilot programs, with a focus on enhanced food secu- the Ethiopian Revenue and Customs Authority reported rity. CC-DARE is a joint ongoing initiative of UNEP and that they, in partnership with the US-based com- UNDP. pany High-G-Tek, will introduce RFID technology to control the country’s export and import activities.205 Other projects around the world using remote sensing Moreover, RFID solutions can also be very efficient in include: tackling issues such as cattle rustling, which remains a problem for the cross-border communities in Ethio- • The COMMON-Sense Net project (Community- pia, as well as in border areas with South Sudan. Oriented Management and Monitoring of Natural Resources through Sensor Network) in Karnataka, Sensors and satellite technologies India, which aims to monitor better use of water resources using a wireless sensor network. These A further ICT application that is appropriate for use sensors regularly record the water content of the in Ethiopia would be wider use of sensors, combined soil and send the data to a central processor. The with remote sensing technology, as a means of improv- information is analyzed to be used in the water ing Ethiopia’s adaptation to climate change,206 which quality and sanitation decision-making process. is likely to affect the agricultural sector in particular. The project is being funded by international do- nors, including the Swiss Agency for Cooperation and Development.208 Similar initiatives would benefit arid and semi-arid areas of Ethiopia. • The Africa Soil Information Service (AfSIS) 202 ICTs and Food Security, h p://webcache.googleusercontent.com/ Web Map Service, which was launched in Sub- search?q=cache:C4__YEW2Ml8J:www.itu.int/dms_pub/itu-t/oth/23/01/ Saharan Africa in 2009 by the Bill and Melinda T230100000B0001MSWE.doc+rfid+agriculture+united+na ons&cd=5&hl Gates Foundation. The project aims to produce =en&ct=clnk&gl=us&client=firefox-a 203 See Deloi e (2012) “eTransform Africa: Agriculture Sector Report”, maps of georeferenced soil data to build the first commissioned by World Bank and African Development Bank, available at: detailed digital soil map of Sub-Saharan Africa.209 h p://www.etransformafrica.org/sector/agriculture. • In Colombia the Federacion Nacional de Cafeteros 204 RFID companies in Ethiopia, h p://www.sourcesecurity.com/ de Colombia (FNC) launched a research project companies/search-results/company-search/pa.rfid,c.ethiopia.html to allow coffee growers to significantly improve 205 Radio Technology to Scan Trucks on Djibou Highway, h p://www.capitalethiopia.com/index.php?op on=com_ farming using GIS solutions. Geospatial imagery content&view=ar cle&id=13969:-radio-technology-to-scan-trucks-on- djibou -highway&ca d=12:local-news&Itemid=4 58 206 See IISD (2012) “eTransform Africa: Climate Change Adapta on Sector Report”, commissioned by World Bank and African Development Bank, 207 h p://www.ccdare.org/. available at: h p://www.etransformafrica.org/sites/default/files/Final- 208 h p://coopera on.epfl.ch/cms/page-9109.html Report-Climate%20Change%20Adapta on.pdf. 209 Africa Soil Informa on Service, h p://www.africasoils.net/ collected from remote sensing sources are used for crop forecasting, erosion management, and Recommendations for sector the durability of coffee harvesting to changing development environmental conditions, such as variation in rainfalls and temperatures.210 Agriculture can benefit from ICT-enabled services and infrastructure at different stages of the crop cycle An essential element to make full use of the data and at all levels of the supply chain. Based on the generated by remote sensing is to develop a national above, and taking into account the specificities of level geographic information system or spatial data Ethiopia, the study will propose three technologies infrastructure (SDI). An SDI provides a national level, that can significantly impact the agricultural sector official digital grid of geographical information on in Ethiopia: which other datasets, including those developed for specific purposes, such as agricultural land-use • The use of remote sensing using satellite imagery, maps, can be meshed together. The World Bank and in particular for monitoring the impact of climate infoDev recently completed a feasibility study for change; establishing a national SDI in neighboring Uganda,211 • The development of mobile applications and at an estimated cost of US$3.5 million. This would services aimed at smallholder farmers, for in- be a suitable program of work that could also benefit stance for access to agricultural market informa- Ethiopia. tion services, financial services, and agricultural insurance; Community radio • The use of community radio broadcasting as a way of disseminating basic agricultural information on Mobile applications target individual farmers and con- good practice. sumers while satellite technology generally benefits the nation as a whole. For the intermediate level— As summarized in Table 16, these interventions can outreach to communities—other ICTs, such as commu- have a positive effect on both food production and nity radio, may be more appropriate. They provide a the supply chain that links farmers with their mar- cost-effective way of extending reach and dissemi- kets. A series of targeted actions are proposed in seven nating basic information on good practice. The main specific areas, as shown below: advantages of the radio are its vast coverage area and inexpensive operation costs. In rural and remote ar- 1. Laws, Policies, and Regulations: In the field of eas, radio is often the only medium available to reach overall policy development, what is required is out to wider communities. The United Nation’s Food a national strategy on the development of agri- and Agriculture Association launched the Rural Radio business and on the use of ICT in agriculture. program in Africa, which runs the Food Security Chan- While this would go well beyond simply the ICT nel to help food deficit countries improve their food sector, nevertheless the agribusiness community production.212 can make a major input to the development of improved policies. In the 1990s, rural radio was effectively used in 2. Institutional strengthening: The key institu- Chad to stop intentional land-clearing bushfires. As tions that have been identified for strengthen- a result, active bushfire committees were set up to ing are the Ethiopian Institute of Agricultural help protect the forests, and fires were reduced by Research (EIAR) and the Agri-Net network in- 90%.213 cluding the Ethiopia Commodity Exchange (ECX) and the Ethiopian Livestock Market Information (ELMI). Services like the ECX and ELMI are cru- cial for reducing market arbitrage and provid- ing fair access to information to farmers and 210 Crop Forecas ng Improves With GIS, h p://www.geoconnexion.com/ agro-dealers. They also allow all actors to make uploads/cropforecas ng_intv9i5.pdf 211 infoDev (2011) “Feasibility study for a na onal spa al data infrastruc- better decisions as to when and how to sell and ture in Uganda”, available at: h p://www.infodev.org/en/Publica on purchase products. These services should be fur- .1134.html. ther developed and promoted among farmers, Food Security Channel, h p://www.fao.org/sd/ruralradio/en/24516/ 59 212 along with the development of other platforms index.html that connect farmers, agents, and insurance 213 Rural Radio: A communica on Tool for Rural Communi es, h p://www .fao.org/sd/ruralradio/common/ecg/24516_en_34859_en_Sheet.pdf companies. 3. Infrastructure/connectivity. There are a num- 5. Skills, training, and capacity building: Exten- ber of investment programs that could make a sion services can be rapidly improved and their significant difference. At the level of individual outreach expanded by using mobile technologies, farmers, a program to develop rural internet where farmers send information (e.g., pictures access centers, which would aggregate demand of a product, a leaf) for a quick diagnostic by ex- for high-speed internet access and provide perts based in Addis or even outside the country. training to farmers, could help. At the level of With these technologies, crop production can the supply chain, a spatial data infrastructure be optimized rapidly with minimal investment would enable more coherent policy develop- in technology and infrastructure. Overall, wire- ment. A feasibility study for a national spatial less hand-held devices can be leveraged not only data infrastructure would be a first step, fol- for the provision of the necessary information, lowing similar steps that have been initiated in such as prices, weather forecasts, and insurance Uganda. information, but also for the processing of vari- 4. Service/Enablers. The development of mobile ous important requests from farmers, such as applications, based on local needs and available requests for veterinarian services. in local languages, is an essential step here. For Capacity building and training activities producers, this could involve providing access to cannot be limited to experts and scholars for ex- input prices, for instance for fertilizers and pes- tension services; farmers and producers need to ticides. For the supply chain, this would involve benefit from targeted training in order to fully providing access to sale prices, at both local and understand and use the proposed changes. As in international markets. infoDev, a Global Part- the case of the health sector, radio, digital TV, nership Program of the World Bank, has estab- and mobile phones are essential for tele-educa- lished a mobile applications laboratory (mLab) tion purposes—educating farmers about various in Nairobi to serve the East African region.214 insurance policies and the availability of new There should be scope for providing training and applications and services. Radio and TV are both applications development in conjunction with effective ways to engage citizens in debates im- this new facility. portant to their local communities and to learn There are strong incentives for farmers from one another’s experiences. and agents involved in agribusiness to use ICT, 6. Processes and procedures: At the national including broader opportunities to access in- government level, there are a number of areas formation and the creation of a more efficient where investment in processes and procedures agricultural market. These provide fewer oppor- can bring benefits. As illustrated above, invest- tunities for market arbitrage to the benefit of ment in resources for analysis of remote sensing all actors. Moreover, greater variety and avail- imagery and development of local capacity for ability of services through ICT contribute to the interpreting the results will assist in the coming overall development and improved efficiency in challenge of climate change adaptation. At the the sector. level of the supply chain, greater use of RFIDs in Using a simple mobile-based platform, small livestock management will facilitate an increase producers from a region can aggregate their in livestock and meat exports. crops to get better prices for dealers. An ex- 7. Access to finance: ICT, and mobile phones in ample of this kind of service is mFarm which is particular, can be used to purchase insurance a company incubated by the East African mLab against extreme events such as droughts or ex- (see: http://mfarm.co.ke/). By aggregating de- cess rain. In Kenya and other countries, the mo- mand, farmers will gain power in negotiations. bile platform M-PESA is already widely used for They will also save money on transport by op- many agriculture-related financial transactions. timizing the truck itinerary and load. The im- Various applications can be created, for instance plementation of this simple mobile-based ap- to facilitate and track payments for agricultural plication can have a tremendous impact on the services, or to develop small scale agricultural agricultural sector at the national level. insurance products with low premiums. Table 16 provides a summary of recommendations on 60 how to enhance the development of the agricultural 214 See eee.mlab.co.ke. sector using ICT. TABLE 16: Summary of recommenda ons in priority order for ICT-enabled development of agricultural sector RecommendaƟon Area ProducƟon Supply Chain a. Laws, policies, regula ons, a.1 Develop a na onal strategy on agribusiness and the use of ICT in agriculture strategies b. Ins tu ons, en es, agencies b.1 Strengthen the EIAR215 b.2 Strengthen the Agri-Net network ECX216, ELMI 217 c. Incen ves, promo on -- -- d. Infrastructure, connec vity d.1 Provide ICT access points for rural d.2 Develop a na onal spa al data popula on infrastructure e. Services (enablers) e.1 Develop mobile applica ons for e.2 Develop mobile applica ons for access to input prices (e.g., fer lizers, access to price data (e.g., local and pes cides) world market prices) f. Skills, training, capacity building f.1 Offer technical training on extension f.2 Use community radio to develop ICT services skills and spread extension informa on for farmers g. Processes and procedures g.1 Use satellite remote sensing to g.2 Use RFID 218 tagging for improving advise farmers on the likely impact of livestock management climate change and suitable adapta on measures h. Access to finance h.1 Explore mobile financial applica ons (such as M-PESA) 215 Ethiopian Ins tute of Agricultural Research (EIAR) 216 Ethiopia Commodity Exchange 217 Livestock Market Informa on (ELMI) 218 Radio Frequency Iden fica on (RFID) 61 Creating an Open Innovation Ecosystem Introduction that rests on the idea that in a world of widely distrib- uted knowledge, public and private sector, R&D or- Improved connectivity and widespread use of ICT ganizations, academia, end-users, and citizens stand applications have changed the way nations are in- to benefit from sharing knowledge and learning with novating. Science, technology and innovation actors each other. in developing countries are experiencing new oppor- tunities to conduct R&D, organize the production of goods, and distribute services. Innovators can engage Ethiopian innovation in processes where ideas are shared in global devel- ecosystem: a state-of-play oper communities while applications are co-created together with local users. In this new ecosystem, The Ethiopian government can play a catalytic role collaboration and competition occur in parallel, and in establishing appropriate conditions for ICT-enabled boundaries between knowledge production and prod- innovation through initiatives such as IT parks, living uct implementation are blurred. labs, innovation competitions, and hackathons. For example Google has, together with the Ethiopian ICT Innovation in this landscape involves the ability to ab- association, launched a series of activities that sup- sorb technology created elsewhere and to put it to port the emergence of an innovation ecosystem. These use to serve local needs. The capacity to use applica- include providing funding for innovation competitions tions, generate local content, and deliver it to us- and offering the Government of Ethiopia assistance ers defines modern emerging infrastructure. Indeed, with the development of an IT park. This IT park will today emerging economies and developing countries assemble technology businesses under one roof with are becoming global hotbeds of innovation219 as en- the goal of fostering shared knowledge and expertise trepreneurs introduce more efficient services, new among innovators. With ETB 2 million already invested business models, and cheaper products that reinvent in the park, within the next four to five years the Ethio- traditional methods of reaching customers. Kenya, pian government expects to witness the emergence of for example, is rapidly developing into a regional hub a fully-equipped IT business incubator. for innovation, with technology platforms such as M-PESA, Usahidi, and Huduma gaining international Building sustainable infrastructure and physical nexuses adoption. ICT-enabled innovation provides Ethio- are often critical initiatives to support innovations. pia with an opportunity to build a knowledge-based Equally important is the establishment of mechanisms growth track while moving from a technology adapter that facilitate the networking and cooperation of in- to a leading service exporter. novation actors. Networked initiatives such as Mobile Monday, BarCamps, hackathons, and innovation com- The Ethiopian government has already taken decisive petitions enable the development of ICT solutions for steps towards building a domestic ICT-based industry, local problems. They also serve to create a networked and the foundations for a robust innovation environ- ecosystem of ICT players at the local and national ment are being laid out. However, a lot still remains level. Institutional intermediaries are still needed to to be done. The gaps in entrepreneurial infrastruc- facilitate the knowledge transfer between various lo- ture, adequate digital and business management cal organizations, and they can play a crucial role in skills, connections to international knowledge net- building collaboration and coordination linkages with works, and coordination mechanisms to engage vari- international ecosystems. ous stakeholders in joint development projects demand sustained attention from the government. This involves The establishment of the ICE-Ethiopia (now iceaddis) adopting the approach of open innovation, a concept Hub network, supported by the German Deutsche Ge- 62 schallschaft für Internationale Zusammenarbeit (GiZ) together with the Engineering Capacity Building Pro- 219 The Economist. July. 2010. gram, the Center for Creative Leadership, EIABC, and Digital Opportunity Trust Ethiopia, is among the bold- Despite a number of private sector companies and in- est initiatives and first steps towards the creation of ternational development and aid agencies active in an open innovation environment in Ethiopia. Aligning the ICT space—in addition to the World Bank (e.g., with the recent developments in Africa’s technology GiZ, USAID, Governments of Finland and of Canada)— scene, iceaddis showcases the value of broad-based there is a lack of donor coordination and a need for a participation of various stakeholders in accelerating common results framework. A recent review of donor the adoption and development of intermediate tech- programs shows that most are focused on addressing nologies and services for local use. Like other African the symptoms of weak performance of the different innovation platforms/hubs such as the iHub (Kenya), players within the market system. Lacking from this Bantalabs (Senegal), Wennovation Hub (Botswana) understanding are assessments that address the un- and Hive Colab (Uganda), iceaddis provides a pattern derlying causes of weak performance. for enabling fast technology adaption and a local en- vironment for technology development. One such constraint is the lack of a skilled IT work- force. While the previous chapters of this report iceaddis aims to be a sustainable business incuba- highlight ways to expand the talent pool in Ethio- tion and innovation community whose mission is to pia, more should be done to create a digitally- and close the distance between researchers, develop- entrepreneurially-skilled generation to transform ers, entrepreneurs, creative customers, and citi- the country into an innovation nation. For instance, zens. It not only offers a collaborative workspace the learning mechanisms facilitating exchange of for local startup companies, but it also provides skills and experience are not highly developed. business coaching programs and business develop- Most enterprises invest in new, cheaper technolo- ment consultancy services. Because of high national gies available externally and are thus undermining priority put in ICT policy on empowering regional local firms’ competitiveness. This is also limiting centers (waredas and kebeles), the ultimate goal opportunities for the local workforce and additional of iceaddis is to establish a national network of col- income streams into the economy. Thus, increased laboration and a home of Ethiopian-made innova- exposure to international best practices would be tions through networked local hubs (iceMekelle, critical to trigger cutting-edge, innovative, home- iceJimma, iceBahirDar).220 A non-hierarchical tech- grown solutions. nology development pattern, combined with strong engagement of end-users and tied to collabora- tive spaces of technological innovation, is putting Suggested opportunities and iceaddis in the middle of the emerging ecosystem building on the principle of open innovation. approach for Ethiopia There are several instruments available to help Ethio- The emerging new interventions in the Ethiopian in- pia to reach its development objectives through ICT novation ecosystem should have both a national and and become internationally recognized for its thriv- provincial focus. Efficient technology transfer mecha- ing innovation environment. A program adapted to nisms require close cooperation with provincial and the Ethiopian context could establish a more systemic provincial/city governments as well as with various approach to innovation by (i) pooling scare resources other innovation actors from the private sector and and using open innovations mechanisms and (ii) pro- civil society. Provincial/city governments also have moting open innovation mechanisms and related in- a role to play in ICT infrastructure projects, such as struments for local skills development and community establishing large-scale rural connectivity/broadband engagement. deployment in kebeles or deploying mobile applica- tions for education and training. Ideally, initiatives Designing a systemic approach using open such as iceaddis will also strengthen the networking innovation mechanisms between different layers of government from the na- tional to local level. While individual innovation instruments such as iHubs and living labs may be crucial, it is their interplay and cooperation which provides appropriate resources to innovators to produce services and products for the market. Thus, an innovation ecosystem is needed to 63 ICEEthiopia. Ethiopia’s Green technology and Innova on network. GiZ 220 drive the development and take-up of ICT. Systems and Concept paper. May 2011. individual components exist in Ethiopia and also at the subnational level—but the cooperation and pooling of A global example is the Nokia-infoDev cooperation resources is not well coordinated, leading to lost op- in mobile application labs (mLabs) which is also con- portunities. Managed properly and with sufficient po- nected to infoDev’s global network of incubators. An- litical support, a living lab/co-creation hub like icead- other global network is ENoLL, the model of which dis can catalyze change and boost the connectivity is currently being explored to be replicated on the between different entities in an entire ecosystem (lo- African continent.226 Box 11 describes in more detail cal, national, regional, sectoral, etc.). A strategy for the clusters and innovation networks. establishing and operating the ecosystem is needed. Applying an open innovation approach The idea of building local/regional competitiveness through networking universities/research institutions Central to the open innovation concept is the notion with private companies and public sector players that expertise is available beyond an organization’s through R&D on ICT is quite well accepted and often traditional reach. Therefore, the open innovation embedded in local/regional development strategies. process requires experts from various backgrounds For example, the living lab approach opens the inno- to work closely together throughout the project life vation process by enabling interaction with local com- cycle. One model can be described as an iterative munity users, allowing for cost-effective creation and process that consists of a series of meetings and work- rapid prototyping of products and services to increase shops, interspersed with periods of elaboration by in- feasibility. The lab also provides physical space and dividual experts on specific aspects.227 infrastructure for training, hacking, and technology camps and VC meetings (e.g., Nokia-infoDev m-Labs Focus initially on public service development in Kenya and South Africa). More examples and details The rationale behind focusing on public service devel- on open innovation mechanisms, such as living labs opment is that ICT is a key in improving delivery of and iHubs, are given in Box 11. public services, as is discussed in Chapter 3. Specific at- tention needs to be paid in urban environments where The aforementioned mechanisms are currently tested the traditional “bricks-and-mortar” drivers of prosper- and scaled at the EU level where living labs and their ity are giving way to an economy based on “brains and stakeholders are networked to cross-border cooper- creativity.” To compete in this new economic environ- ation and exchange by R&D projects in the area of ment, cities need to leverage the advanced ICT avail- “Future Internet”- and “Smart Cities”-related work. able to address the challenges they face, e.g., in their Such international cooperation would be important core systems based on ICT (water, energy, transporta- for Ethiopia as well, opening up new opportunities for tion and logistics,).228 Box 12 describes some of these globalizing the Ethiopian ecosystem and sourcing new mechanisms—the tech camps and hackathons—which markets for business and FDI. build on the open innovation approach. The concept of a networked open innovation environ- ment has proven useful not only in Europe but also Suggested way forward: increasingly in emerging economies like China and Brazil, which have opened labs linked to the European launching an open innovation Network of Living Labs.221 Similarly, evolving social in- novations from emerging markets—such as the RLabs program for Ethiopia network originating from South Africa—are establish- In Ethiopia, there is an opportunity to create a col- ing a global presence in the form of open partnership laborative framework to support the development of labs in advanced economies like Finland.222 The con- digital and entrepreneurial skills linked to a National cept is gaining interest on the African continent and System of Innovation in Ethiopia. Such an intervention there are already regional networks emerging such as will also provide an opportunity to link the emerging the Southern African Network of Living Labs223 and Af- rilabs224—of which Ethiopia’s iceaddis is a member.225 226 See h p://www.ist-africa.org/home/default.asp?page=livinglabs 221 See www.openinnova on.eu 227 van Dijk, G, B. Raijmakers, M. van der Heyden & T. Barter. Open Inno- 64 See h p://www.rlabs.org/ 222 va on as Service Design Approach. Paper presented at the Interna onal 223 h p://llisa.meraka.org.za/index.php/Living_Labs_in_Southern_Africa Service Design Conference in Amsterdam (24–26 November) 2008. 224 h p://ict4entrepreneurship.com/ 228 Keeling, M. in Salmelin, B. (Eds) Services Innova on Yearbook 2010– 225 h p://iceaddis.com/ 2011. DG Informa on Society & Media. Brussels. 2011. Box 11: Open innovaƟon instruments partnerships, and find business opportuni es from the local community. In Europe, clustering of digibusinesses Test beds, co-creaƟon forums, living labs through the DigiBIC network229 has helped startups Open test beds, living labs and co-crea on pla orms and SMEs exploit new technologies and catch market are new pilot, test, and trial environments that induce opportuni es through coopera on with leading and extend R&D collabora on beyond tradi onal R&D research ins tu ons. Capacity building of intermediary func ons. They connect developers to users, business organiza ons promotes the integra on of ICT tools into partners, and policymakers to foment a shared innova on local development and poverty reduc on strategies. process combining professional and real life experience Good examples can be found, inter alia, in the European to prac cal development prac ces. They provide a real- Business Innova on Centers Network. life test and experimenta on environment wherein users and producers co-create innova ons. Living labs, Open innova on environments have also been characterized by the European Commission as a public- networked and connected to clusters in many European private-people partnership (PPPP) for user-driven open states. For example the European Network of Living innova on, is a strong example of such innova on hubs. Labs230 consists of local and na onal clusters addressing A living lab employs four main ac vi es: various sectors of the future Internet, such as health, gaming, or mobile technologies. Living labs and their • Co-CreaƟon: co-design by users and producers cross-border networks have become an essen al part • ExploraƟon: discovering emerging usages, behaviors, of the applied R&D process enabling the co-crea on of and market opportuni es products and services through user-driven research in • ExperimentaƟon: implemen ng live scenarios within real-life scenarios. Designing, exploring, experiencing, communi es of users and refining applica ons in a real-life environment allows • EvaluaƟon: assessment of concepts, products, and industry representa ves, researchers, and policymakers services according to socioergonomic, sociocogni ve to evaluate poten al impacts as well as legal and and socioeconomic criteria. regulatory barriers before eventual implementa on of services/products. Labs can also assist in spilling-over Clusters and innovaƟon networks ICT in other sectors, such as health, educa on, tourism, Clustering of small businesses has helped them to gain and agriculture, and thus facilitate learning and provide access in research, open up new markets, engage in new opportuni es to entrepreneurs in various sectors. Box 12: Mechanisms of open innovaƟon vary from business professionals and researchers to students and schoolchildren. Tech camps and hackathons A tech camp or summer school is a training retreat Hackathons are based on the no on that new ideas, focused on technology training, educa on, and be er open data, and innova ve instruments are knowledge sharing. While ini ally addressing hardware, needed to respond to the world’s wicked environmental, networking, coding, and programming, tech camps can social, and economic challenges. A hackathon event is an also include a broader scope of competencies relevant intensive marathon of brainstorming and programming, to the idea on and development of ICT-enabled services where so ware developers and designers collaborate and prototypes and their delivery to the market. Tech to create new tools for solving a set of problems. One camps can include various areas of ICT ranging from example is the Water Hackathon (www.waterhackathon. informa on security to serious games. Camps/summer org) where the World Bank and its partners joined schools can operate on college campuses during the forces in order to seed a new community of so ware summer months due to the availability of housing, developers, designers, and water experts interested in computer labs, and dining facili es. The audience can co-crea ng new solu ons to water-related problems. 65 229 See h p://www.digibic.eu/home. 230 See www.openlivinglabs.eu Ethiopian innovation ecosystem with international in- incubators established under the ICTAD Project in four novation players active in Ethiopia.231 regional capitals (Mekele, Bahirdar, Hawassa, and Ada- ma) can be used to pilot such activities. Strengthening the systemic operation of the existing institutional environment in Ethiopia by targeting ini- As part of this joint ICT Sector Unit-WBI initiative, tiatives that enhance the capacity of innovation ac- cross-disciplinary teams of students and faculty will tors to generate transformative ICT applications will be skilled through ideating and developing prototypes introduce novel, lightweight mechanisms through for ICT applications that enhance government service which innovation collaboration can flourish. Linking delivery and citizen participation. (For examples of local developers and the research community with such applications, see Chapter 3.) the private sector and civil society will also be critical in generating sustainable ICT-enabled services. 2. Creating knowledge-transfer forums The suggested program should include the following Building on the notion that innovation occurs at the interdependent components: local level, the Government of Ethiopia can create an enabling environment for innovation and knowledge 1. Building linkages with existing donor initiatives transfer forums. Entrepreneurial innovation and incen- tives are critical success factors for the future. Lack Ethiopia can take advantage of regional good practices of instruments for cooperation and networking such as such as the “Impact Sourcing” model of Kenya (as intermediaries, knowledge transfer forums, networks, presented in Chapter 2.) The digitization of govern- and co-creation platforms hampers the generation of ment records will allow the government to simplify innovations and delivery of products to market. record filing processes and improve citizen access to public information. The Kenyan experience could be This approach aims to create an environment in which launched in Ethiopia as a pilot, allowing software de- actors from various organizations and fields can con- velopers to use the data gathered to develop appli- tract multidisciplinary teams of students to develop cations and services that would contribute to triple problem statements or unused IPR through practi- bottom line/efficiency gains. It will also help address cal teaching and learning. The facilitator of such co- the issue of youth unemployment in Ethiopia, which creation forums offers a venue; everything else is up stands at over 25% (2006 data) of the total population to/at the discretion of the teams. The concept is based between 15 and 24 years old.232 on the idea is that the immaterial rights belonging to large content owners like corporations and public The proposed project aims to build on the Bank’s previ- authorities (IPR, ideas) can be contracted to student ous support for projects on the development of local teams to develop and validate prototypes and business urban government. The activity proposes to connect the plans with users. Depending on the contract, student Ethiopian government to the innovation teams of the teams can then sell the right of use to the company in World Bank’s ICT Sector Unit and of the World Bank Insti- question or to some other company to make use of the tute (WBI) to explore how ICT can be used to empower innovation. citizens and to strengthen delivery of public services. 3. Building innovation funds The two teams can launch the Entrepreneurship and Innovation for Open Government in Ethiopia, in part- The traditionally siloed approaches and institutional nership with iceaddis and the city of Addis Ababa, with barriers that exist in industry, academia, and civil so- a goal of fostering ICT-assisted public service delivery. ciety may be an impediment to bringing ICT-enabled The project, which positions the government as a tech- innovations to market. Similarly, a lack of horizon- nology client, can initially focus on geospatial tools for tal coordination across the main ministries, agencies, Addis, replicating the mapping work done in support and funders of ICT may result in conflicting objectives of the Bank’s Dar Es Salaam Metropolitan Development among related policies and encourage eternal “pilot- Project (in preparation, see pp. 65-66). ICT business ing” in various sectors. Establishing a dedicated fund to finance partnerships 66 for public ICT application development can help man- age the innovative process. The fund can coordinate 231 As is planned between Iceaddis and German knowledge hubs. 232 World Development Indicators, World Bank. the interplay of strategic institutions and guide the introduction of R&D as part of a national innovation partnerships, sensitive R&D, and similar high involve- strategy. A dedicated innovation fund, with a focused ment activities. Training and capacity building activi- program and steering mechanism, can intermediate ties can help build such trust. Training could focus between key stakeholders, facilitating work on joint on business incubation and be held either in Iceaddis projects and supporting the instruments established Hubs or at regional incubators. under component 2. An innovation fund can be the- matically focused to support projects promoting inter- The training could feature the following approaches: national partnerships and global learning in the area of future Internet. An innovation fund with a thematic (i) Interdisciplinary teams with members skilled in research program can add value to the work of emerg- software engineering, user interface design and ing National Research Education Networks (NRENs) business leading universities in Ethiopia and pro- and their links to global research infrastructures. viding an opportunity to work with an advanced startup from a developed ICT market; 4. Strengthening cooperation and research (ii) An Ethiopian team establishing its own business dissemination in partnership with the advanced startup from a developed ICT market. Strengthening cooperation between research insti- tutions—both locally and globally—and supporting The win-win partnership described above would help public-private partnerships in the service delivery build highly skilled tech communities in Ethiopia while process are key intermediate outcomes for fostering simultaneously allowing startups from developed innovation. Building on previous components and le- markets to create more jobs and stimulate economic veraging the above-mentioned innovation fund, this growth. The startups in question would gain access to component establishes four subprojects to support high quality talent in developing countries at low initial network and knowledge creation locally, nationally, cost, and help grow their businesses across borders. and internationally. These are: The tech teams in developing countries would gain exposure to an international working environment, (i) Building a knowledge base, financing, and co- cutting-edge technologies, and working with entrepre- financing studies exploring and evaluating the neurs. Ethiopia would gain from an expanded pool of needs and opportunities for ICT innovations tech talent and from being part of the organic growth (ii) Disseminating results at an Innovation Forum of technology startups from developed markets.234 and Conference (iii) Training program for researchers (iv) Providing foresight for stakeholder management The expected results and creating joint visions for the future and pol- The results expected from this systemic approach are icy roadmaps for strategic activities233 the following: 5. Training for R&D and incubator experts • Result 1: Increased ability of ICT stakeholder or- ganizations, including iceaddis, to generate and To implement the professional diploma (and higher) apply new knowledge that will positively impact programs discussed in Chapter 2, it will be necessary various stakeholders in Ethiopia. to secure and manage the access of the profession- • Result 2: Improved innovative applications and als to these programs. This intervention can provide e-services for end users. grants for participants to take the course, with a • Result 3: Increased regional, national, and pan- minor incentive grant to be offered on satisfactory African R&D and institutional linkages in the area completion of the course. of innovation. 6. Capacity and capability building for incubatees Table 17 on the following page presents a summary of recommendations on steps to be taken towards the Trust between parties plays a major role in enabling creation of an Open Innovation Ecosystem in Ethiopia. collaboration and connectedness in alliances, business 67 233 Foresight studies can provide vision and assessment of up-and-coming 234 In Poland local developers have been providing high quality ser- technologies and services that can be moved from the laboratory into vices for US-based startups. See h p://eu.techcrunch.com/2010/11/07/ broad-based strategic implementa on. polish-programrs-are-joining-u-s-startups-but-staying-in-poland/ TABLE 17: Summary of recommenda ons in priority order for crea ng an Open Innova on Ecosystem in Ethiopia Area RecommendaƟons a. Laws, policies, regula ons, a.1 Create local-regional compe veness development strategy; Na onal strategies Innova on Strategy; IPR b. Ins tu onal, en es, agencies b.1 Establish an iHub b.2. Establish a Living Lab c. Incen ves, promo on c.1 Offer R&D subsidies as incen ves d. Infrastructure, connec vity d.1 Provide ICT access points for rural popula on d.2 Develop business incubators d.3. Provide connec vity to cloud infrastructure e. Services (enablers) e.1 Use cloud compu ng-enabled solu ons and services f. Skills, training, capacity building f.1 START skills program f.2 SMART skills program g. Processes and procedures g.1 Incorporate foresight processes, clustering, and networking h. Access to finance h.1 Establish innova on funds 68 Strategic Recommendations for ICT-enabled Transformation in Ethiopia The Government of Ethiopia has embarked on a jour- opportunities in creating an open innovation ecosys- ney of ICT-enabled transformation, aiming to enhance tem in Ethiopia. government efficiency across sectors, deliver better public services, foster the development of agriculture The proposed approach and recommendations are il- and health services, improve the lives of its people, lustrated in Figure 7. provide opportunities for economic growth, and cre- ate a vibrant local ICT industry. Possible strategies can be developed in the areas of policy, regulatory, and institutional frameworks (in- In an attempt to provide clear guidance on a pos- cluding an enabling business environment), infrastruc- sible way forward for Ethiopia, this report provides ture, services, applications, skills development, busi- an extensive, although not exhaustive, assessment of ness incubation, and innovation activities. Following the private, public, health, and agricultural sectors, the layered structure proposed in Figure 7, and trying providing focused and implementable recommenda- to focus on quick wins that would maximize the im- tions on how to mainstream ICT in other parts of the pact of possible interventions, the implementation of economy. The study also explores the challenges and the following components is recommended: FIGURE 7: An ar cula on of recommenda ons for Ethiopia /PEN)NNOVATION%COSYSTEM Business incubator e-services & ICT applications for: sCITIZENS IT Park & sBUSINESSES iHub sGOVERNMENT ICT Skills PROGRAM Shared Services Shared Infrastructure 2EGULATORY ,EGAL AND)NSTITUTIONAL&RAMEWORK 69 Creating an enabling vocational education and training to accelerate the emergence of a skilled labor force in rural areas. environment: regulatory, In addition, Ethiopia should also continue equipping legal, and institutional its public agencies and institutions (in the health, ed- framework ucation, and rural development sectors, for instance) with wireless technologies and Internet access, pro- To create an environment that is favorable to economic viding access to information on best practices in the growth and human development in Ethiopia, the govern- sector from various regions or countries. ment may wish to consider developing a comprehensive regulatory and institutional framework that allows for the mainstreaming of ICT across sectors and governmen- Shared Services tal entities. For example, frameworks for interoperabil- When deploying cloud computing infrastructure and ity and cybersecurity, along with authentication/digital extending connectivity, the Government of Ethiopia identification, are part of the cross-sector regulation could also develop shared ICT services, which are that has to be enacted to enable the development and central to the development and delivery of specific delivery of services. Further, this report recommends ICT functionalities and capabilities to a wide range of several institutional arrangements, a key one being the government departments. creation of a central Innovation Unit within government that would work with the ministries and agencies of the Government-wide shared services such as government to implement an ICT-enabled program of authentication/digital ID, along with frameworks for transformation across every sector of the economy in cybersecurity and interoperability, would need to be Ethiopia. strengthened in Ethiopia. Implementing shared ser- vices requires a governance framework to manage the Sustained ICT capacity-building efforts targeting new relationships and balance the rights and interests public officials, as well as extensive outreach cam- of multiple stakeholders. These layers of shared servic- paigns for citizens, local businesses, and other key es can potentially be developed in Ethiopia by building stakeholders are another prerequisite for creating the on existing successful pilots and initiatives supported above-mentioned enabling environment. by the PSCAP Project in the areas of public sector ad- ministration and could potentially be leveraged with Shared Infrastructure success in both health and agricultural sectors. These opportunities should be grasped in order to fully It is recommended that the Government of Ethiopia benefit from the potential offered by the layout of consider creating a common infrastructure and mecha- shared services across sectors in Ethiopia. The horizon- nism for the rapid deployment of ICT-enabled services, tals described above—enabling environment, coupled including a shared cloud computing infrastructure shared infrastructure, and shared services—should and development of the ICT systems needed to de- serve as a platform for the emergence of sector- liver government services over the Internet and on a specific applications and e-services, aimed at improv- mobile platform. The shared infrastructure would be ing overall public service delivery. based on open access principles and could be devel- oped through a public-private partnership. Given the important public investments made recently in de- Applications and e-Services ploying fiber optic infrastructure across the country, it is also recommended that the Government focus By leveraging the horizontal building blocks or en- on extending reach to existing connectivity nodes, ablers, as mentioned above (i.e., enabling environ- namely by increasing the number of access points ment, shared infrastructure, and shared services), to broadband connection. Currently, there is an op- Ethiopia will be taking a systematic and holistic ap- portunity to build on the success of both the ICTAD proach to developing ICT as an enabler for transfor- and CIDEV initiatives and extend the network of tel- mation across sectors. These building blocks are nec- ecenters across the country, potentially by leveraging essary for the development of relevant applications 70 the existing network of Ethiopian post offices. Open- and services in the key sectors of Ethiopian economy. ing additional access points for citizens across the Once ICT solutions are successfully implemented in the country may also involve developing a new platform back-office operations, it can be much more efficient for government service delivery, as well as providing and straightforward to leverage this infrastructure to deliver services, and this can be done through a variety could further be leveraged to provide sustained and of channels (e.g., online portals, mobile devices, etc.). focused support to local SMEs and rural entrepreneurs of Ethiopia. The newly established Addis Ababa IT Park For example, in the health sector in Ethiopia, given could also provide substantive support in this area. the lack of medical personnel and difficulties in ac- cessing in-person health services, telemedicine appli- cations could become a viable alternative for doctor/ Innovation Ecosystem patient communication and remote consultations. Finally, there is an opportunity to create an open inno- Electronic medical records stored in back-office IT vation ecosystem. This would allow innovation actors in systems can enable the use of mobile applications Ethiopia to have opportunities to conduct R&D and or- which can be used effectively for remote monitoring ganize the production of goods and distribute services. of diseases and alert systems. Ethiopia could take advantage of the “Impact Sourc- Similarly, the agribusiness sector could benefit from new ing” model of Kenya, as presented in the chapter on e-services and applications. Services like the Ethiopian ICT for Private Sector Development. Digitization ef- Commodities Exchange (ECX) and Livestock Market In- forts for government records would allow the govern- formation (ELMI) systems are multi-channel and are cru- ment to simplify record filing processes and improve cial for reducing information asymmetries and eliminat- citizen access to public information. In order to do so, ing excess profits made through market arbitrage. These the Ethiopian government should consider joining the platforms should be further developed and promoted Open Development Technology Alliance (ODTA) led by among farmer associations, along with the development the World Bank to explore how ICT can be used to em- of services and mobile applications that connect farm- power citizens, such as through geospatial tools and ers, agents, and insurance companies. application development, leveraging the ICT business incubators established under the ICTAD Project. Capacity building, skills The Government of Ethiopia can create an enabling development, and business environment for innovation and knowledge transfer, through intermediaries, knowledge-transfer forums, incubation activities networks, and co-creation platforms (iHub and living labs). This approach aims to create an environment in Sustained capacity-building efforts targeting public which actors from various organizations and fields can officials, as well as extensive outreach campaigns for contract to student teams to develop and validate the citizens, local businesses, and other key stakeholders prototypes and business plans with users. are another prerequisite for attaining growth targets of the government. Training, capacity building, and strengthening cooper- ation between research institutions - both locally and Ethiopia should actively leverage the CIDEV network globally—are key intermediate outcomes for fostering of telecenters, as well as mobile phones and low-cost innovation. This entails training researchers, build- handheld devices for tele-education and decision-sup- ing a knowledge base, and financing and cofinancing port purposes. Radio, one of the most established and studies exploring and evaluating the needs and oppor- least expensive information and communication tech- tunities for ICT innovations, as well as disseminating nologies, and digital TV are frequently used for dis- results. Possible training scenarios include interdisci- tance education purposes. As in the case of the health plinary teams providing an opportunity to work with sector, mobile phones also provide an additional tool an advanced startup from a developed ICT market or for tele-education purposes—educating farmers about a local startup partnering with an advanced startup. various insurance policies and the availability of new applications and services, and allowing for interactive information search and discovery. Radio and TV are In summary also both effective ways to engage citizens in debates important to their local communities and to facilitate The key recommendations for each sector examined learning from others’ experiences, and with the ad- in this report are summarized in the following table. dition of mobile phones, this can provide a feedback These recommendations are based on the findings mechanism, for instance through SMS. from the cross-sector study in Ethiopia and on the 71 insights drawn from global best practices. They are In addition, the existing business incubation facilities subject to a broad stakeholder consultation, to be un- that have been developed under the ICTAD Project dertaken in Ethiopia in the upcoming months. 72 TABLE 18: Summary of recommenda ons in priority order to the Government of Ethiopia Private sector Public sector Health sector Agricultural InnovaƟon sector ecosystem Laws, policies, a.1 Revise Na onal ICT Policy or a.1 Consider -- a.1 Develop a a.1 Local-regional regulaƟons, strategies develop a targeted strategy for adop ng an na onal strategy compe veness developing a local IT-based services interoperability on agribusiness development strategy; and BPO industry. framework; and the use of ICT Na onal Innova on a.2 Establish adequate legal cybersecurity in agriculture Strategy; IPR and regulatory frameworks for framework; developing the IT-BPO sector and for electronic implemen ng innova ve microwork iden fica on; digital programs. signature, mobile and electronic payment; provision of financial services through postal network; open government framework; InsƟtuƟons, enƟƟes, b.1 Strengthen the ICT industry b.1 Establish a Public b.1-2 Strengthen the b.1-2 Strengthen b.1-2 Establish an agencies associa on (ICT-ET) by leveraging Sector Innova on Ministry of Health and the EIAR, the Agri- iHub and a Living Lab interna onal “good” prac ces—such Unit with analy cs Health units Net network, ECX, as NASSCOM in India and IBPAP in capability and role and ELMI the Philippines. IncenƟves, promoƟon c.1 Strengthen incen ves for -- c.1 Provide incen ves -- c.1 Offer R&D a rac ng foreign investors including for insurance subsidies as incen ves tax incen ves, training subsidies, and companies to increase infrastructure and business support access to basic services services. c.2 Reduce me and costs of health services delivery to pa ents Infrastructure, d.1 Accelerate rollout of high-speed d.1 Explore d.1 Employ biometric d.1 Provide ICT d.1 Provide ICT connecƟvity broadband infrastructure to a ract cloud compu ng (smarts card-based) access points for access points for rural foreign firms and support business infrastructure and health records system rural popula on popula on innova on and produc vity across services—PaaS, IaaS, d.2 Implement an d.2 Develop a d.2 Develop business the economy. SaaS services 235 eHealth/ mHealth na onal spa al incubators d.2 Further promote development of d.2 Provide ICT pla orm data infrastructure d.3. Provide ICT parks for housing and incuba ng access points connec vity to cloud IT-BPO companies and startups. (telecenters) infrastructure Services (enablers) e.1 Review legal and regulatory e.1 Employ e.1 Digi ze medical e.1 Develop e.1 Use cloud frameworks and develop a strategy authen ca on /e-ID records mobile compu ng-enabled for fostering mobile money services, services e.2 Employ applica ons solu ons and services which can be a key enabler for e.2 Implement authen ca on /eID for access to improving access to finance. open data and based on biometrics input prices ci zen feedback (e.g., fer lizers, e.3 Explore pes cides) mechanisms telemedicine e.2 Develop mobile applica ons for access to price data (e.g., local and world market prices) Skills, training, capacity f.1.1 Replicate the “Impact Sourcing” f.1 Offer ICT f.1 Offer ICT training f.1 Offer technical f.1-2 Employ START building model of Kenya by addressing training and skills for medical staff training on and SMART skills increasing demands for the development extension services program digi za on of government records. programs for civil f.2 Use community f.2.1 Conduct an ini al assessment servants radio to develop of BPO founda onal skills, duly f.2 Deliver TVET and ICT skills and benchmarking available skills with the ICT-skills programs spread extension skills and competencies of candidates through telecenters informa on for successfully hired into global BPO to rural popula on farmers companies. f.2.2 Prepare a strategy for systema cally developing skills and addressing skill gaps/deficiencies that could be taken up in close partnership with the private f.3.1 Learn from programs in other developing countries that have successfully aligned development of IT skills with industry requirements. f.3.2 Partner with universi es and private sector in developing targeted programs for developing IT skills f.4.1 Collaborate with global venture and incuba ng firms and link aspiring entrepreneurs in Ethiopia to global startups. 235 Pla orm as a Service (PaaS), Infrastructure as a Service (IaaS), and So ware as a Service (SaaS). 73 74 TABLE 18: Con nued. Private sector Public sector Health sector Agricultural sector InnovaƟon ecosystem Processes and g.1 Simplify processes and establish -- g.1 Foster interagency g.1 Use satellite g.1 Incorporate procedures a one-stop-shop for foreign business coordina on remote sensing to foresight processes, startups advise farmers on clustering, and the likely impact networking of climate change, and suitable adapta on measures g.2 Use RFID236 tagging for improving livestock management Access to finance h.1 Establish government-led venture h.1 Explore PPP h.1 Explore a PPP h.1 Explore h.1 Establish capital funds to help finance ICT models and model for na onal mobile financial innova on funds SMEs and startups community-based health insurance applica ons (such financing system as M-PESA) 236 Radio Frequency Iden fica on (RFID) Annexes ANNEX 1: Overview of latest tariff reduc ons by Ethio Telecom Outcome Indicator/Milestone 2008 baseline 2013 data % of change from baseline Monthly cost of dial-up internet connec on ETB 60 ETB 46 in 2013 23% decrease Monthly cost of a 2 mbps ADSL broadband ETB 47,479 ETB 500 in 2013 99% decrease connec on Cost of fixed landline calls: 45 cents/min 81.9% decrease Broadband infrastructure is developed and the 0.499 Gbps 8.076 Gbps in 2013 1518% increase interna onal gateway bandwidth Source: Ethio Telecom (h p://www.ethionet.et/) and TeleGeography, 2013. ANNEX 2: Basic topology of IT and IT-enabled services IT Engineering: • Upstream product engineering • Embedded so ware • Plant and process engineering IT (Informa on Technology) • So ware product development • So ware maintenance • Gaming IT Applica ons: • Applica on development and maintenance • System integra on • IT infrastructure services • IT and network consul ng BPO—Front office • Call centers • 24X7 help desks BPO—Back Office ITES (Informa on Technology Enabled Services) • Data Entry • Transcrip on • Accoun ng and audi ng • Human Resource processing KPO • Business and financial research • Anima on • Data analy cs 75 • Legal process and patent Source: Adapted from World Bank, 2010 ANNEX 3: A.T. Kearney Global Services Loca on Index 2011 Financial People skills and Business Rank Country a rac veness availability environment Total score 1 India 3.11 2.76 1.14 7.01 2 China 2.62 2.55 1.31 6.49 3 Malaysia 2.78 1.38 1.83 5.99 4 Egypt 3.10 1.36 1.35 5.81 5 Indonesia 3.24 1.53 1.01 5.78 6 Mexico 2.68 1.60 1.44 5.72 7 Thailand 3.05 1.38 1.29 5.72 8 Vietnam 3.27 1.19 1.24 5.69 9 Philippines 3.18 1.31 1.16 5.65 10 Chile 2.44 1.27 1.82 5.52 11 Estonia 2.31 0.95 2.24 5.51 12 Brazil 2.02 2.07 1.38 5.48 13 Latvia 2.56 0.93 1.96 5.46 14 Lithuania 2.48 0.93 2.02 5.43 15 United Arab Emirates 2.41 0.94 2.05 5.41 16 United Kingdom 0.91 2.26 2.23 5.41 17 Bulgaria 2.82 0.88 1.67 5.37 18 United States 0.45 2.88 2.01 5.35 19 Costa Rica 2.84 0.94 1.56 5.34 20 Russia 2.48 1.79 1.07 5.34 21 Sri Lanka 3.20 0.95 1.11 5.26 22 Jordan 2.97 0.77 1.49 5.23 23 Tunisia 3.05 0.81 1.37 5.23 24 Poland 2.14 1.27 1.81 5.23 25 Romania 2.54 1.03 1.65 5.21 26 Germany 0.76 2.17 2.27 5.20 27 Ghana 3.21 0.69 1.28 5.18 28 Pakistan 3.23 1.16 0.76 5.15 29 Senegal 3.23 0.78 1.11 5.12 30 Argen na 2.45 1.58 1.09 5.12 31 Hungary 2.05 1.24 1.82 5.11 32 Singapore 1.00 1.66 2.40 5.06 33 Jamaica 2.81 0.86 1.34 5.01 34 Panama 2.77 0.72 1.49 4.98 35 Czech Republic 1.81 1.14 2.03 4.98 36 Mauri us 2.41 0.87 1.70 4.98 37 Morocco 2.83 0.87 1.26 4.96 38 Ukraine 2.86 1.07 1.02 4.95 39 Canada 0.56 2.14 2.25 4.95 40 Slovakia 2.33 0.93 1.65 4.91 41 Uruguay 2.42 0.91 1.42 4.75 42 Spain 0.81 2.06 1.88 4.75 43 Colombia 2.34 1.20 1.18 4.72 44 France 0.38 2.12 2.11 4.61 45 South Africa 2.27 0.93 1.37 4.57 46 Australia 0.51 1.80 2.13 4.44 76 47 Israel 1.45 1.35 1.64 4.44 48 Turkey 1.87 1.29 1.17 4.33 49 Ireland 0.42 1.74 2.08 4.24 50 Portugal 1.21 1.09 1.85 4.15 ANNEX 4: Loca on Readiness Index Primary Data USA India Kenya Fully loaded cost/FTE/hour (USD) $32.93 $9.19 $8.48 Availability 428,600 1,445,391 25,433 Generalists—Data Suitability 75% 15% 60% Accessibility 90% 80% 90% Willingness 30% 50% 80% Trainability 0% 25% 30% Talent Pool: Willing 86,792 86,723 10,987 Talent Pool: Poten al 86,792 393,869 14,039 Fully loaded cost/FTE/hour (USD) $34.68 $10.70 $9.13 Availability 428,600 619,153 25,433 Generalists—Voice Suitability 70% 15% 30% Accessibility 90% 80% 90% Willingness 20% 30% 80% Trainability 0% 25% 30% Talent Pool: Willing 54,004 22,290 5,493 Talent Pool: Poten al 54,004 153,860 10,834 Fully loaded cost/FTE/hour (USD) $57.37 $19.32 $18.32 Availability 197,100 535,656 5,524 Knowledge Process Suitability 80% 16% 52% Accessibility 96% 80% 90% Willingness 14% 60% 80% Trainability 0% 27% 26% Talent Pool: Willing 20,958 40,007 2,049 Talent Pool: Poten al 20,958 161,950 2,739 Fully loaded cost/FTE/hour (USD) $58.09 $14.56 $13.58 Availability 107,100 305,800 7,540 Suitability 80% 25% 60% Accessibility 90% 80% 90% Willingness 20% 80% 80% IT Services Trainability 0% 25% 25% Talent Pool: Willing 15,422 48,928 3,257 Talent Pool: Poten al 15,422 106,266 4,011 Employees in IT/ITES as % of total employees in non-agriculture 6.60% 4.50% 0.27% Presence of Industry associa on (TRUE / FALSE) TRUE TRUE TRUE IT/ITES GDP as % of total services GDP 3.00% 2.90% 0.10% Incen ves (tax, infrastructure support—e.g., so ware parks, etc.) 4 3 3 77 Secondary Data USA India Kenya Up me of end-to-end network (%) 99.30% 99.60% 97.20% Mean Time to Restore (MTTR)—Hours 1.5 28 14 Total inventory of class A spaces (in square feet) 588,638,000 30,307,177 694,050 Vacancy rate of the class A/B spaces (%) 12.50% 37.50% 8.00% Annual average power outage days 1 2.5 83.6 Peak me shortage (%) 0.00% 13.50% 0.00% Total road length/per capita (in km.) 0.020 0.003 0.002 Total rail length/per capita 0.020 0.004 0.000 Travel me to target des na ons (in minutes) 0 1100 1200 Frequency (non-stop flights / day to target des na on) 100 1 0 Time difference to target des na ons (in hours) 0 9.5 7 HIV/ AIDS- adult prevalence rates 0.01% 0.90% 0.10% Number of murders per capita 0.043 0.034 0.070 Number of rapes per capita 0.301 0.014 0.026 Secondary Data (pre-Indexed) USA India Kenya EIU connec vity ra ng 7.85 1.55 1.25 Stability of law/regula on 5.90 6.27 4.50 Transparency & fairness of legal system 4.00 3.00 2.75 Bureaucracy 4.39 2.79 2.60 Macroeconomic stability 7.80 7.10 6.30 Currency fluctua on 5.00 26.10 30.00 Capital freedom 1.84 3.49 4.00 Protec on of intellectual property 5.00 3.00 2.00 Na onal government policy towards foreign investment 4.00 3.00 2.75 Flexibility of labor laws for industry 0.00 30.00 21.00 Ease of bureaucra c burden 4.00 2.00 2.00 Dura on (days) to start a business 6.00 30.00 44.00 Level of corrup on 7.60 2.90 2.20 Ra ng of overall business environment 8.70 5.80 4.89 Employment prac ces 1.00 30.00 21.00 Compa bility of business ethics/culture with target des na ons 0.00 23.00 33.25 Ra ng of quality of life 8.40 5.70 5.70 78 ANNEX 5: Gartner Hype Cycle for Business Process Outsourcing 2012 79