Economist Special Report highlights Paramount’s Technologies

10 Nov 2017
ALONG A WINDING road down the edge of an airport near Pretoria, South Africa’s capital, is an aeronautical version of a Mad Max world. An old UN cargo plane rusts in a field. Jammed up against fences are aeroplanes of various vintages and states of disassembly. “Airheads” (aviation enthusiasts) scrounge for parts to get their machines aloft again.

Just around the corner is one of the most modern aircraft assembly plants anywhere in the world. In it stand two brand new prototypes of the Advanced High Performance Reconnaissance Light Aircraft, or AHRLAC, designed to fill a gap in the market for a rugged aeroplane jam-packed with sensors that can patrol borders, look for poachers and drop guided weapons on insurgents.

This is not the first military aircraft designed in South Africa. During apartheid the country circumvented an arms embargo by building its own attack helicopters. But these planes are a private venture aimed at a niche in the export market. The firm that makes them, AHRLAC Holdings, has had some early successes. On the production line a wing that will be mounted on the first aircraft for export is taking shape. The factory is preparing to churn out between two and four planes a month, though it will not say who has ordered them, or in what quantities.

AHRLAC planes were designed and built in an entirely novel way using the latest computers

Significantly, these planes were designed and built in an entirely novel way using the latest computers, which reduced the time it took to develop them from decades to just a few years. The digital design is so precise that its robot-made parts fit together like a child’s Meccano set, making assembly quick and cheap. “It is easier designing something new with a completely clean sheet of paper,” says Andries Uys, a metallurgist working on the plane. Legacy aircraft firms such as Boeing would “have to change 50 years of procedures and practices” to adopt such techniques.

The new plane is more than just a business venture for its backers, which include Paramount Group, Africa’s biggest defence firm. It started as a project to preserve engineering skills and reverse a brain drain of young local aerospace graduates who were leaving to work abroad, says Ivor Ichikowitz, Paramount’s founder. But it has morphed into a multimillion-dollar venture that is spurring the development of other technologies across South Africa. One taking shape in a nearby government laboratory is the world’s largest 3D printer, which can print aircraft parts from powdered titanium.

In many parts of the world advanced robotics and 3D printers are seen as a threat to manufacturing jobs. Yet in most of Africa manufacturing has never taken off, contributing just 5% of the continent’s jobs, compared with 15-18% in other developing regions, so robots will not kill many jobs. Instead, they offer the opportunity to create new ones by helping African firms overcome bottlenecks in production and by lowering barriers to making and selling things to the world. Without the rapid advances recently seen in digital design and manufacturing, the AHRLAC would never have taken flight.

Other examples abound. In IBM’s new innovation centre in Johannesburg a 3D printer turns out cases for wearable electronics that IBM is developing to track the spread of infectious diseases. Additive manufacturing is helping to lower the cost of innovation for firms across Africa. Until recently, when BRCK wanted to make a prototype for its Wi-Fi transmitters, it had to order it from abroad, wait for weeks and pay up to $250 in shipping and taxes for a small part. Now that 3D printers are available in Nairobi, BRCK can get new prototypes made in days for about $25.

Yet there are many aspects of technology where Africa is not moving fast enough. In 2016 it bought only 400 industrial robots, or less than 0.2% of the world’s total. The lion’s share, 86%, went to Asia. One reason why Africa buys so few is that its labour costs are low and finance is difficult to come by. Besides, it does not export a lot of manufactured goods. That is a problem, because it runs huge trade deficits with the rest of the world and needs to export more than just raw materials to provide jobs for the millions of youngsters leaving school every year. It also matters because African firms that export tend to grow faster and raise their productivity more quickly than those that do not, says Dirk Willem te Velde of the Overseas Development Institute in London. Africa’s weak infrastructure and inefficient ports have put many potential exporters off investing there. However, Andela, a high-tech firm, demonstrates how pure brainpower can be exported from a snazzy office block in Lagos to sophisticated customers halfway round the world without going near an overcrowded port or broken railway line.

Andela was founded on the premise that “talent is distributed evenly around the world but opportunity is not,” says Jeremy Johnson, the firm’s chief executive. It finds talented young computer programmers (many of whom have taught themselves to code online, using websites), trains them intensively and gets them to work remotely with mainly American tech firms. The company (which counts Facebook’s Mark Zuckerberg among its investors) says its model is different from that of Indian outsourcing firms such as Tata Consultancy Services because its developers become fully fledged team members of the firms they are contracted to, even though Andela bills for them and provides ongoing training. For example, Andela collaborates with Fathom, a company in Austin, Texas, that provides cloud-based software used by water utilities across America, so in one corner of the Lagos campus large blue banners proclaim “Fathom Team East”. Fathom’s office in Austin has a similar sign saying “Fathom Team West”.

Part of Andela’s appeal is that the cost of hiring a Nigerian developer is less than half that of a similarly qualified worker in Texas or California. More important, it helps tech firms overcome a desperate shortage of good programmers. “We’re trying to find the best talent in every corner of the world, which means looking beyond our own backyard,” says Chris Lambert, chief technology officer of Lyft, an American ride-hailing firm, who recently visited Lagos to see Andela.

The search for talent has brought other big tech firms to Africa too. Amazon, for instance, opened a large centre in Cape Town in 2004 where it developed much of the technology used in its Elastic Cloud Compute platform, now the main plank of its web-services business. “This is where we are building the next-generation technologies for Amazon Web Services,” says Geoff Brown, AWS’s regional manager for sub-Saharan Africa. “In 2015 we continued expansion and opened an office in Johannesburg, and since then have added hundreds of jobs in the country to support the growth of AWS in Africa and around the world.”

Such businesses employ only a minuscule share of the local workforce, so their direct impact is small, but the indirect effect will be significant. Andela takes about 40 people a month into its four-year work-and-training programme. Its first graduates are due to finish soon, having worked with startups across America. Many of them want to found their own technology firms, bringing to bear not just their newly acquired skills but also a Silicon Valley mindset that embraces entrepreneurialism and a willingness to experiment. “We are hoping that the people we are training in Andela today will become the founders of the next Andela in five years’ time,” says Seni Sulyman, who runs the Nigeria operation. In that sense, firms such as Andela may be helping to deal with the real deficit in Africa, which is not a shortage of technology but of people willing and able to adopt and adapt it.

“There is lots of tech already out there in the world. When we go looking for it we can find it,” says David Kelly, who runs a venture-capital firm that starts greenfield businesses in agriculture and food processing throughout Africa. “It is the tech-adopters who are missing.”

This article appeared in the Special report section of the print edition under the headline "Robots in the rainforest"