It is imperative that Africa quickly develop agency in data and artificial intelligence and it will be lucrative for investors who support them by financing Africa’s telecom and data backbone. Two Stocks with Impressive Records. While Democratic presidential nominee Joe Biden is unlikely to prioritize a financial industry crackdown if he wins on Nov. 3, he is expected to take a much tougher line than Trump and his former boss President Barack Obama. Biden has also pledged to review rules by Trump's housing regulator, which
Rapid advances in technology, connectivity and telecommunications are conspiring to make Africa’s large, rapidly growing population a valuable asset for the automation revolution. It is imperative that Africa quickly develop agency in data and artificial intelligence and it will be lucrative for investors who support them by financing Africa’s telecom and data backbone.
Africa must urgently develop cogent digital strategy. This at first seems fanciful, or even superfluous, given the continent’s relative lack of more basic development. Indeed, there are myriad other challenges to which most would assign primacy. However, by setting their sights on participating in the ongoing fourth industrial revolution, developing nations in Africa may be able to chart a navigable course to rapidly raising living standards. With the window for pursuing labor led industrial development narrowing, Africa can’t afford to take a gradual approach towards rapidly matching prevailing technological standards. Several opportunities are open to Africa within the corridors of the coming age of hyperconnectivity and automation. Africa focused investors will be well served by a bold approach to the continent’s digital infrastructure.
Telephone House, headquarters of Uganda Telecom, in the central business district of Kampala
One wonders what it must have been like to live through the bewildering gyrations of the industrial revolution. In more fanciful ruminations, one might imagine upheavals and turmoil as people try to cope with radical new technologies and abrupt discontinuation of professions, traditions and ways of life. However, the reality was far more mundane. Most people didn’t immediately realize that significant changes were underfoot. The steam engine, locomotive, electricity and even internal combustion were obscure novelties for decades before becoming sufficiently commercialized to become embedded in every day lives. It took longer still for these technologies to alter the production process enough to begin to eliminate certain jobs and alter modes of life. We tend to imagine the emergence of dominant technological innovations as the sudden bursting of a dam; the reality tends to be a steadily rising tide eventually flooding unsuspecting communities unprepared for the deluge of change.
A similar process is currently underway, with cloud computing, 5G telecommunications, machine learning and the internet of things gradually cresting our economic river banks. Today these technologies are the domain of specialist researchers and TED talks, but they are inexorably, if imperceptibly, seeping into all the seams and crevices of our everyday lives. The combination of these innovations portends a near future of widespread automation which will fundamentally reshape the global economy and are likely to reorder human societies. Sooner than most of us expect, the economic potency of highly efficient, self-directed machines will severely pressure wages and the aggregate demand for human labor. Already, machine-based intelligence has matched or eclipsed human performance in optical and speech recognition, medical diagnostics, war games and perhaps most noisily, chess. The supremacy may extend to legal drafting, investment management and architectural rendering – knowledge professions will not be exempt. Machines employing human like intelligence in narrow domains that can simultaneously execute an abundance of tasks with precise accuracy and don’t require food, breaks or weekends will create an extraordinary, and irresistible, economic asset for global producers and owners of capital.
The industrial commodity of this new technological epoch is data. Deep learning, the process by which an algorithm independently improves and refines itself by being exposed to vast quantities of targeted data, has sharply brought forward the timeline for when much economic activity will be governed by automated processes. The process is perhaps most easily understood when trying to comprehend optical recognition. Machines can be taught, for instance, to recognize a housecat – and distinguish it from other types of animals or even felines – most efficiently by exposing an object recognition algorithm to billions of individual images of cats and not-cats. Often the process also includes ‘reinforcement learning’, offering rewards for correct guesses by the algorithms and penalties for errors. This is far more accurate and expedient than trying to specify a list of rules for what visual inputs together comprise a cat to the exclusion of other similar objects. Such technology, called computer vision, is rapidly being applied to driverless cars, warehouse management technology, facial recognition and medical x-ray diagnostics.
Most fears in the popular imagination about the onset of the age of artificial intelligence conjure images of all-conquering and all-knowing sinister robots enslaving the world. In the near term, the real danger worrying the informed is the power these tools will imbue to those humans who will own the algorithms and pilot the applications driven by machine learning. Unseen levels of profits, wealth concentration and the attendant political – and perhaps, military – power that follow will enthrone a new order of global power. Ascendant powers such as China are working assiduously to understand and set the standards for artificially intelligent systems and the telecommunication infrastructure needed to bring it to markets and strategic theaters around the globe; traditional powers such as the US and European nations are just as keen to stake their ground. Just as multi-masted ships with lateen sails and the maxim gun helped the West ascend to the apex of global supremacy, these technological step changes will play an important role in the geopolitical destinies of tomorrow.
As such, Africa must not sit idly by as this ground shaking revolution takes shape. It’s geopolitical and economic future will be dictated by the level to which it has input in and ownership over these emerging technological standards. Moreover, the nascence of humanity’s understanding of these categories leaves open to Africa unusually rich opportunities to catch up. The African academy and the continent’s budding technology ecosystem, for perhaps the first time in a century, has an opening to participate in the determination of standard setting paradigms. Such defining technologies will have profound ramifications on the relationships between labor and capital, business and governments, private ownership and the commons, nation states and multinational enterprise – certainly Africa should develop its own opinions on the way our brave new world takes shape. If for no other reason, than the fact that the 3 billion plus Africans expected to be alive in the year 2100 will not be exempt from whatever new rules take shape in the age of AI. By that time, Nigeria is expected to be the world’s second most populous nation.
Banking, warehousing, organizing and transmitting the data that trains and develops ever more intelligent machine applications will be the critical path to success in this new landscape; data is the new crude oil. Enormous productivity gains will inure to those who master this artificial intelligence and thus maximize the output their societies can produce. The winners will be those that develop the best applications to process data, train machine systems and perform tasks on behalf of people. Just as in our current economic hierarchy, the rest of us will consume these applications and send surpluses and profits to those who do the hard work of value addition – storing, labelling and processing data. The first great fortunes in the age of AI and connectivity will likely be made in the infrastructure that will effectively store, transmit and deliver this data and its applications.
This is already happening. The sharp increase in demand for data storage and remote connectivity during covid-19 forced lockdowns with billions across the planet working remotely has exploded valuations for so called “work from home” stocks. Cloud storage providers, digital productivity services, videoconferencing facilitators and online commerce will continue to be the big winners long after the novel coronavirus is brought to heel. The current pandemic has simply accelerated long developing trends in the evolution of the way we work together. None of these businesses are possible without the oft-unseen material infrastructure that makes our brave new digital world possible. Data centers, sub-sea cables, fiber optic connections, cell sites and radio spectrum form the unseen arterial network enabling the broad consumption of these innovations. These backbone system assets generally provide reliable yields increasingly favorable supply-demand dynamics.
In Africa, the investment case may be even clearer. During the pandemic, African businesses have suffered from lacking the sort of telecommunications connectivity familiar to the developed world. But herein lies opportunity. This has spurred an acute awareness amongst policymakers and business leaders alike on the urgency of moving more of the economy online. Payments and mobile money applications have led this move with a raft of mobile network operators applying for banking licenses and at least as many banks expanding their already robust digital offerings. Africa has actually led innovation in the digital financial space. Ghana issued the world’s first digital finance policy as part of its Covid-19 response, accelerating the country’s move to a cashless society. Vodafone Group plc and Kenya’s Safaricom famously pioneered mobile money with M-Pesa, a strong precedent for the opportunities available to international investors in Africa’s digital advance. M-Pesa’s extraordinary 99% market share has driven consistent expansion of earnings and delivered enormous returns to its investors.
A few categories stand poised to offer similar opportunities to investors in Africa’s automation and connectivity related future:
Africa can ill afford to be absent from this discussion and artificial intelligence applications will arrive on the continent much sooner than most assume. The continent fell behind global competitors in adopting new technologies once before; that had disastrous ramifications for the continent’s future. Another great game is taking shape. This emerging reality is an opportunity for both policy makers and investors alike: on a continent that is virgin terrain for many industries, the automation and connectivity boom is one of the few areas where Africa may find itself on more equal footing to the rest of the world – at the moment, no one has a clear lead on these sectors. That won’t be the case for long.
Men lay down fiber optic cable lines for C-Squared
Author: Franklin Olakunle Amoo
Top Stock Picks for Week of October 19, 2020
United Natural Foods, Inc. (UNFI – Free Report) , is the leading distributor of natural, organic and specialty food and non-food products in the U.S. and Canada. Shares of United Natural have outperformed the industry on a year-to-date basis. The company is gaining from rising demand stemming from coronavirus-induced higher at-home consumption. This was seen in the fourth quarter of fiscal 2020, with earnings gaining on higher sales and improved gross margin. Also, revenues were backed by robust demand, including benefits from cross selling. Moreover, management anticipates food-at-home consumption demand to remain elevated outpacing the demand for away from home services for fiscal 2021. Apart from these, integration synergies related to Supervalu is helping United Natural. Further, such upsides are likely to help the company battle additional coronavirus-induced costs like labor safety and sanitization protocol.
eGain Corporation (EGAN – Free Report) , provides customer engagement solutions. This stock was a big mover recently, as the company saw its shares rise. The move came on solid volume too with far more shares changing hands. This continues the recent uptrend for the company—as the stock is now up by double digits in the past one-month time frame. The company has seen two positive estimate revisions in the past few months, while its Zacks Consensus Estimate for the current quarter has also moved higher over the past few months, suggesting that more solid trading could be ahead for eGain. The stock currently has a Zacks Rank of #1, Strong Buy. So make sure to keep an eye on this stock going forward to see if this recent jump can turn into more strength down the road.
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Factbox: What a Joe Biden win could mean for financial policy
By Pete Schroeder and Katanga Johnson
WASHINGTON (Reuters) – While Democratic presidential nominee Joe Biden is unlikely to prioritize a financial industry crackdown if he wins on Nov. 3, he is expected to take a much tougher line than Trump and his former boss President Barack Obama.
Two weeks ahead of the election, Biden leads Republican president Donald Trump nationally and in battleground states.
Here are some of the key areas his administration and agency picks would likely focus on.
THE COMMUNITY REINVESTMENT ACT
The pandemic has shone a harsh spotlight on America’s racial and wealth inequalities, galvanizing Democrats to use a range of policy levers to address the problems. Those include the 1977 Community Reinvestment Act, a fair lending law giving banks regulatory points for lending to low-income communities. Biden has pledged in campaign materials to expand the rules to other sectors, including mortgage and insurance companies.
Addressing the country’s affordable housing crisis is a priority for Democrats and Biden. A Biden administration would likely halt the Trump plan to release housing finance giants Fannie Mae and Freddie Mac from government control, a move Democrats worry would increase the cost of mortgages for middle and lower-income Americans.
Biden has also pledged to review rules by Trump’s housing regulator, which are meant to guard against lending behaviors which disproportionately adversely impact racial minorities or other protected groups.
CONSUMER PROTECTIONS, CREDIT REPORTING
Biden has called for a robust Consumer Financial Protection Bureau (CFPB), created following the 2009 financial crisis to ensure banks did not take advantage of consumers. The agency has been less aggressive under Trump, and Biden has endorsed stricter oversight of consumer lending and called for a crackdown on discriminatory lending practices.
Among Biden’s most eye-catching policy proposals is creation of a public credit reporting agency to compete against the likes of Equifax and TransUnion. According to Biden’s campaign materials, the new agency would aim to “minimize racial disparities” in credit reporting after some studies found the current system disadvantages and excludes minorities.
CLIMATE CHANGE RISKS
Influential Democratic lawmakers and policy experts are pushing hard for public corporations to be required to disclose climate change risks to their businesses and for such risks to be incorporated into the financial regulatory system. Biden has called for swift action to address climate change and policy experts believe his agency picks will pursue these ideas.
In a policy about-face, Biden has adopted a bankruptcy reform plan pushed by consumer advocate Democratic Senator Elizabeth Warren which he previously opposed as a Senator. The proposal would make it easier for Americans to pursue bankruptcy and shield assets like houses and cars from debtors during the process. Such a plan, though, would require passage of legislation which would be unlikely without a Democratic majority in the Senate.
Biden has expressed support for a long-held progressive policy to get the U.S. Postal Service to provide basic banking services. Progressives say the plan would reduce economic inequality by allowing “unbanked” Americans to access reasonably priced banking services and credit and avoid predatory lenders and expensive check cashing services.
The banking industry opposes creation of a taxpayer funded competitor and would fight the plan.
PAYDAY LENDING, DEBT COLLECTION
Democrats including Biden cried foul in July when the CFPB stripped out a key provision in a payday lending role, first drawn up by the Obama-run CFPB, that would require payday lenders to ensure consumers had the ability to repay. Lenders said that provision was so onerous it could kill their businesses.
Likewise, consumer groups have criticized the agency’s proposed May debt collection rule which they say would allow collectors to harass consumers with unlimited text messages and emails. A Biden administration is likely to try to rescind or rewrite those rules, whether through Congress in the case of the payday rule, or at the agency level.
(Reporting by Pete Schroeder and Katange Johnson; Editing by Nick Zieminski and David Gregorio)
Author: Pete Schroeder and Katanga Johnson