*2.4.2 Improving access through 4G digital technologies*

The last mile coverage especially in advanced systems like fourth generation (4G) network is a major strength of access to digital technologies. 4G network is an advanced network to replace 2G and 3G systems that were used for communication across the world. Its introduction was celebrated as important in SSA because many people first accessed the internet on their mobile phones. As such, 4G with its higher download speeds, sometimes as fast as high-speed fixed broadband, greatly improved user experience. Its introduction has helped to improve productivity. Investments in 4G have largely been in urban areas with much of the rural areas using the older generations. To unlock Africa's digital potential to stimulate enterprise, each country must work toward improving access and affordability.

### *2.4.3 Broadband affordability for improved access to digital technologies*

Affordable broadband improves access to digital technologies and facilitates economic growth. Recent research however, questions if the internet has any effect on economic development. A study by McKinsey Global Institute (2011, p.7) [13] noted that "much of the impact of the internet and the way that it contributes to growth and raising standards of living have gone unmeasured". Follow up studies like Vanags and Grāvelis, 2015 [16], indicated that investment in broadband positively impacted on GDP gain as well as employment. The investment in 4G for example, was meant to improve broadband penetration but comparison between 4G coverage and broadband penetration revealed that without affordability, access alone had no impact. For example, 4G rollout in Rwanda is almost 100% compared to Kenya's 53% but Rwanda's broadband penetration (11.3%) is less than half of Kenya's (47.8%). The difference is explained by affordability, access to devices and human development index.

#### **2.5 Technology-enabled business models**

Technology has created a range of new opportunities in the gig economy, a demand-driven independent, short-term or a task-by-task economic activities that payment is received upon the completion of the assignment. The opportunities are available to anyone in the world and provided for anyone who demands them [3]. The operating models of the online gig platforms can be divided into 'on-demand' work like ride hailing drivers like Uber taxis for instance and 'crowd-work' which includes for instance a Kenyan online gig worker, providing translation services for a client based anywhere in the world through Upwork. These platforms may also include homestay hosts like Airbnb, e-commerce logistics like LoriSytems, e-commerce sellers like Jumia, and business-to-business marketplace platform like Twiga Foods. These enterprises would not be possible without investment in ICT infrastructure.

Digital progression enables informal businesses to successfully make the progressive transition from start-up to formal enterprise making each step at less cost and lesser risk [2]. This is exhibited in **Figure 3**.

As observed in **Figure 3**, an informal economy gradually gets used to mobile money and other additional steps. Unlike the Digital business progression model, the ascent in the traditional business progression model is very steep. The use of mobile money has enabled improved financial inclusion in the informal economies [1]. Indeed, according to GSMA [19], Sub Saharan Africa leads in the uptake of mobile money across the globe. This is shown in **Figure 4**.

The growth of mobile money in Sub Saharan Africa has been phenomenal thereby creating massive opportunities for integration. In due course, the firms get

#### **Figure 3.**

*Digital vs. traditional formalization process. Source: Ng'weno and Porteous (2018) [2].*

*Evolution of the global Mobile money landscape, 2001–2019. Source: GSMA (2019) [19].*

*Orchestrating Smart Cities, New Disruptive Business Models and Informal Enterprises DOI: http://dx.doi.org/10.5772/intechopen.94075*

#### **Figure 5.**

*Platform launches across eight African countries. Source: Smit et al. (2019) [23].*

absorbed into the formal economy, paying taxes as required amongst other formal activities. This creates massive opportunities for the formalization of the national economies. In Kenya for example, a study by Genesis Analytics Limited [21] suggested that the total size of the online Kenyan gig economy as at 2019 was \$109 million and employed more than 36,000 workers and was projected to grow by over 33% over the next 5 years. Additionally, an estimated 4.8 million African workers reported having derived an income from online gig work in seven surveyed countries namely Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania and Uganda [22]. These digital labour markets have a potential for future growth [1]. In addition to this, Smit, Johnson, Hunter, Dunn and van Vuuren (2019) [23] established that the growth of platform launches across Africa has been steady and this is shown in **Figure 5**.

In spite all this, there have been challenges that are associated with working conditions in platforms and online gigs [2, 3, 21, 24]. These challenges range from low remuneration, social isolation as a result of having to work alone, working unsocial and irregular hours to meet strict deadlines, overwork, sleep deprivation and exhaustion as a result of the gig workers having to balance the gigs and their normal responsibilities [24].

Innovation hubs create various pan-sectoral initiatives that promote beneficial ecosystems where entrepreneurs and other stakeholders can collaborate and promote their ideas. To a large extent, these are mostly driven by technology. Hubs characteristically provide in-kind support that includes trainings, advice and facilities as well as financial support programmes. The number of identified tech-hubs in Africa, have seen a phenomenal growth from 314 in 2016 to 643 in 2019. This is represented by **Figure 6**.

According to the survey by Briter Bridges and Afrilabs, as shown in **Figures 6**, 41% of the tech-hub facilities are incubators, 24% are innovation hubs, 14% are accelerators and 39% offer coworking space [25].

#### **2.6 Digitization of informal settlements and inclusivity**

The use of information and communication technologies (ICT) and geographic information systems (GIS) to map informal settlements, and by openly providing spatial maps, has led to improved conditions for the poor people living in slums.

#### **Figure 6.**

*Tech hubs in Africa, 2019. Source: Afrilabs and Briter Bridges (2019) [25].*

Furthermore, ICTs and GIS has forced policymakers to apply much-needed changes of urban renewal, by beginning to pay attention to the plight of the poor in slums to not only identify their slum assets but become but of the growing e-commerce that has brought greater inclusivity improving both livelihood and security. Whereas those living in slums have complex situations, increased transparency through open mapping has provided a platform for sustainable renewal and created new enterprises [15].
