The research proposal comprises of a background overview of the proposed concept against the manufacturing background situation in the target East African countries. It also presents a statement of the problem to explain the observed phenomenon that is posing problem and opportunity for which this research intends to solve. The guiding objectives are presented with the research questions that correspond to the conceptual framework that has been conceived from literature reviewed as the guiding framework for the research. The approach and methodology for the research is explained systematically including the Research and Development approach where following this research an implementation model will be executed through establishing a prototype Blockchain and Artificial Intelligence Businesses East African forum. The forum will debut knowledge transfer and technical support for Internet of Business (IOB) and Industrial Internet of Things (IIOT) initiatives and the forays in the Digital Economy drive for East Africa. The research outcome will be monitored using EASTCO prescribed monitoring log frame and with stringent application of funds applied for. The log frame has presented indicators to measure attainment of expected outcomes and the impact of activity/resource. This research will be expected to be conducted between years 2018 and 2019 with a budget not exceeding USD 120,000 and the research team is collaborative, multidisciplinary, multi-institution and multi-country (Tanzania, Kenya, Rwanda and Uganda). The researchers are drawn from academia, industry and research institutions and will also work with respective science councils of East Africa and respective Governments and private institutions that are stakeholders and players in the manufacturing sector in East Africa. The research will observe fundamental ethical principles and gender inclusivity so as to ensure unbiased philosophy guides the team from selection, implementation and dissemination. The manufacturing landscape in East Africa has encountered mixed results. While it largely leans on processing of agricultural produce, import of finished goods continue to cause a huge imbalance in balance of trade. Furthermore, with the raising number of middle income earners, the consumer market especially for electronics has grown exponentially. These effects have been shared across all the East Africa states albeit in disproportionate measures but to the same detriment of erosion of foreign exchange and loss of employment and dwindling job creation. In view of this development of manufacturing sector has become an economic priority with Kenya naming it top of its Big Four Agenda and placing in the frontline of its Vision 2030. In the same suit the Tanzania Development Vision (TDV) 2025 and the Second Five Year Development Plan 2016/2017 to 2020/2021 (FYDP II) has recognized the socio-economic benefits manufacturing innovations and applications that need to be harnessed fully to accelerate growth of manufacturing from 8% recently to 12.1%. Uganda on the other hand intends to increase share of industrial sector in GDP from 25% (2010) to 31%; total manufacturing exports from 24.1% to 50%; labour productivity in the industrial sector from US$3,550 to US$24,820; and the labour force in the industrial sector from 7.6% to 26% by 2040 through technology achievement, enhanced public expenditure on R&D and innovations. In Rwanda the vision is on transformation from subsistence agriculture economy to a knowledge-based society by increasing industrial sector share to GDP to 20% in the next 5 years (EASTCO, 2018).
Blockchain (BC) is a Distributed Ledger Technology (DLT) that is resistant to tampering and modification. It uses a cryptographic hash with a timestamp and data about the transaction, to generate a continuously expanding chain of records – blocks – that are linked and secured via the cryptography. This creates a networked audit trail of transactions, or actions that have been taken in automated Business Systems. Tampering with any one record creates a ledger entry that differs to all of the verified copies that are shared across the network. Block chain has enabled realization of fully automated and secure Internet of Business (IOB) and new inroads of manufacturing processes efficiency. The greatest success story of application of BC is the Bitcoin and other emerging Cryptocurrencies that are disrupting traditional money systems (Gausdal, Czachorowski & Solesvik, 2018).
The other twin problem of manufacturing has been cost and quality efficiency. Artificial Intelligence (AI) as a field of computer science has emerged as the revolutionary technology for creating expert systems that have intelligent behavior and imitate human expertise while eliminating human limitations of fatigue, speed and consistency (Kikitamara, 2017). By use of the manufacturing sector has been able to implement Human Intelligence in machines, which create the machines that understand, think, learn, and behave like humans.
Integration of BC and AI in Manufacturing
While block chain theoretically builds trust, transparency, and networked verification into every record, AI on the other hand enhances manufacturing productivity through automation of intelligent systems that necessarily do not replace humans but help them to perform better. The decentralized nature of blockchain is what makes it so attractive. Centralized database creates a single point of vulnerability and thus demand a gatekeeper or overseer to ensure that only authorized parties are able to access data and that all transactions are ‘legitimate’ – this is where Enterprise Resource Planning (ERPs) reach their limit. Given the strong digital tide in Internet of Things (IOT), intelligent and unsupervised manufacturing processes need to be harnessed. A convergence of functions into real-time automated processes for smart manufacturing is no longer a dream but a debutant challenger of traditional management of manufacturing enterprises. Traditional transaction intermediaries like banks are becoming integrated into manufacturing Supply Chain Management (SCM) and settlement of payments among other transactions (WEF, 2017; Pickington, 2016).
This automated seamless systems inevitably need non repudiation technology and that is what blockchain has come to deliver by offering an unprecedented level of traceability and transparency that does not require an overseer. It is its resultant combination of trust, transparency and traceability that will dramatically guarantee the manufacturer that adoption of manufacturing automation leveraged on cutting edge technologies such as AI and IOT will be of integrity (Smart Industry, 2018). It will allow unsupervised intelligent automated manufacturing plant to run while humans continue in the more obtrusive management tasks in order to achieve the elusive global competitive position of delivering higher quality and productivity at lower costs.
Although Blockchain and Artificial Intelligence technologies are helping many manufacturing enterprises to have competitive advantage in the global market arena, the manufacturing sector in East Africa has remained largely a mortar and pestle tradition. This causes goods manufactured in this region to be expensive due to low productivity and huge operating cost overruns (Heshmati & Rashidghalam, 2016; Simushi, 2017). The proposed research is aimed at research and development of blockchain application in artificial intelligence for manufacturing automation in East Africa. It will be a multidisciplinary, multi-country and multi-institutions research by including experts from research institutions, academia and the industry. The research will be guided by the following specific objectives:
To determine the extent of adoption of BC and AI in a cross section of manufacturing enterprises in East Africa.
To determine factors that could affect preparedness of adoption of BC and AI in a cross section of manufacturing enterprises in East Africa.
To determine the magnitude of opportunities from adoption of BC and AI in a cross section of manufacturing enterprises in East Africa.
To implement Blockchain and Artificial Intelligence East African Business forum for Knowledge Transfer and Technical Support on BC and AI to a cross section of manufacturing enterprises in East Africa.
The research will be completed using the R&D approach where objectives (1), (2) and (3) will focus on the research element and objective (4) will focus on the development aspect. The research aspect will be conducted based on descriptive research design with a cross section survey where the manufacturing enterprises surveyed will be studied as they are with no manipulation of inputs and data will be collected at one instance. The data collected will be analyzed and reported in descriptive statistics and inferential statistics will be used to obtain relationships and explanations of the observed manufacturing environment. The development aspect will be achieved by development of a social forum for knowledge transfer (KT) and technical support for forerunner manufacturers adopting this technologies. The findings of this research will be used to make recommendations through the East African Science and Technology Commission (EASTCO) to the respective Government membership, and the industry at large.
Justification/Significance of the Study
This research is important for addressing the gap of transforming the manufacturing sector in East Africa to a digital economy, one that has high productivity, quality and competitive enough in the global arena. It will also help in Knowledge Transfer across different manufacturing sub-sectors including agro-processing, pharmaceuticals, textiles, leather, mining, telecommunications and energy, among others.
His Excellency Mr. Uhuru Kenyatta, President of the Republic of Kenya, has identified blockchain as a major driver for delivering his “Big Four” priorities – manufacturing, affordable housing, universal healthcare, and food security; and key to “Digital Drivers: Enabling the Growth of Africa’s Digital Economy.” To actualize its implementation a taskforce on Blockchain and IoT was unveiled in February 2018 (PSCU, 2018). Tanzania on the other hand held its first Tanzanian Blockchain Community event on June 30, 2018 (Bitcoinafrica, 2018) and the President of the Republic of Tanzania, His Excellency Mr. John Magufuli is very enthusiastic about realization of a strong manufacturing sector in Tanzania. Further, Uganda hosted the first Africa Blockchain Conference opened by His Excellence Mr. Yoweri Museveni, President of the Republic of Uganda in May 2018 (Africablockchain, 2018). Rwanda on the other hand in January 2018 identified blockchain as a means to making land Registry more digital (Techinafrica, 2018) and His Excellency Mr Paul Kagame, President of the Republic of Rwanda has observed that by adoption of digital economy using technologies such as blockchain Africa can stand on its own (The East African, 2018).
The findings of this research will therefore be useful to the collaborative researchers’ countries and the entire East Africa at large. It will also generate new knowledge for academia to the existing on innovative application of Blockchain, Artificial Intelligence and the Internet of Things. The target manufacturing sub sectors will use this knowledge as the revolutionary drivers of the digital economy and their potential application in their global competitiveness as well as the Governments involved will capture value on learning and policy directions for exploiting opportunities of BC and AI in driving their development agenda. There will be deliberate participation of private sector industry to ensure that the research results will gain uptake and demystify BC and AI as the new drivers of digital economy where manufacturing sector cannot be sidelined (McKinsey & Company, 2018). The manufacturing sector holds the key for leapfrogging East African economy from over dependence on low economic agricultural activities that lack value addition and many perennial problems. It will also help to establish efficient systems for managing economic resources on which manufacturing supply systems ride on while opening new economic frontiers for the 167 million population the four participating countries and by extension to 434 million population in the Eastern Africa (Worldometers, 2018).
The regional benefits of this research are likely to span beyond the private sector manufacturing enterprises to East Africa Community bloc. In order to eliminate residual trade barriers the Digital Single Market (DSM) has been fronted by the regional Head of States in East Africa and the broader Africa through the African Union. A DSM integrates a heterogeneous Government agencies’ ecosystem into a single common platform. This will streamline clearance processes for cargo via sea, air and land. Kenya’s TradeNet was the first comprehensive Single Window in the East African Community and was launched in May 2014 (The Standard Digital, 2014). The European Union has embraced DSM strategy to open up digital opportunities for its people and businesses in the European Union so as to enhance Europe’s position as a world leader in the digital economy. The initial implementation was in regional ecommerce protocol to harmonize ecommerce markets for online firms (The Guardian, 2018). The EU DSM would be worth additional 2.5 trillion Euros to Europe’s GDP by 2025; yet Africa with the largest African Continental Free Trade Area of young innovative population is alarmingly undermined by Internet penetration at 18% of its 1.2 billion population (Trademark East Africa, 2018).