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Ray Charles, an American singer, asks, What is a soul? It is like electricity – we don’t really know what it is, but it’s a force that can light a room. Christopher Flavin, the former President of an independent research organization focused on natural resource and environmental issues, corroborates this and asserts that the real potential of electricity lies not in providing social amenities but in stimulating long-term economic development. As a key component of the national sector, electricity is a major source of advancement and improvement in people’s living standards by stimulating other sectors like health, education, commerce, and industries. This article starts with Nigeria and focuses on how technology improves the economy when rested on a good electricity supply.

To meet customer demand, many households and businesses in Nigeria resort to purchasing generating sets to power their properties, an energy source that offered 6,000 MW in 2008. Nigeria’s persistent electricity shortage has affected the country for several years. For example, in 2022 alone, its power grid collapsed twice in one week.

Statistical data further shows that over 40% of households in Nigeria own and use generators for their daily electricity requirements. This implied that the impacted households spend about $14 billion annually on generator fueling due to insufficient power supply from the National grid.

In addition, the report titled “Nigeria’s state of power: Electrifying the nation’s Economy” tells us that the exorbitant amount spent by these households on fueling their generators had adverse effects on their expenses and hindered their business growth. Therefore, Nigeria’s shortage of reliable electricity supply is a major constraint on the country’s economic growth. Large and small businesses have significantly relied on self-generated power, which stifles their growth to expand.

As an alternative solution, renewable energy offers some hope as an economic boon from providing lower-cost electricity to generating reliable, local jobs and avoiding costly externalities associated with emissions from burning fossil fuels because renewable energy sources are all around us and offer a way out of import dependency, allowing countries to diversify their economies and protect them from the unpredictable price swings of fossil fuels while driving inclusive economic growth, new jobs, and poverty alleviation. Some advantages of energy economics include cost-effective energy efficiency improvements that can have positive macroeconomic impacts, boosting economic activity and often leading to increased employment. Energy efficiency reduces the energy needed to deliver services, such as mobility, lighting, heating, and cooling.

However, there are some current challenges faced by the electricity generation industry in Nigeria, such as infrastructure constraints across the entire value chain from fuel to power distribution link, including set energy sources for electricity (80% thermal and 20% hydro), insufficient gas pipelines, obsolete generation plants, and equipment, as well as inadequate and poorly maintained transmission and distribution networks. All further worsened by vandalism. We must therefore consider how electricity generation will change; using renewable energy sources such as wind and solar power remains one of the fastest-growing ways to get greener, cleaner electricity. This means that to reduce carbon emissions and reach net zero, more aspects of our lives that previously relied on fossil fuels will need to start using electricity instead.

Moreover, addressing how electricity contributes to the economy, Stern, D.I. et al. have said in The Impact of Electricity on Economic Development: A Macroeconomic Perspective that Energy infrastructure may improve economic growth and development in several ways. First, electricity is a key factor of production for companies which, from research, has low substitutability with other factors of production and thus may constrain output when unavailable. Second, the state uses energy to deliver key public services, including health and education. Third, consuming electricity may improve household well-being and create efficiency gains, such as time savings, communication, and educational investments. Also worthy of mention is that energy infrastructure depends on other forms of infrastructure that complement each other and help support broader economic development.

In economics, it is widely accepted that technology is the key driver of the economic growth of countries, regions, and cities. Technological progress allows for the more efficient production of more and better goods and services, which prosperity depends on. However, the mechanisms through which technology is developed, adopted, and used in production are complex. Their more detailed analysis can allow for new findings impacting many policy areas, including science policy, research and development, industrial policy, and national and regional development policies.

Furthermore, it is necessary to remember that the two primary ingredients for the development of new technology are codified knowledge (presented as frameworks, scientific research papers, theories, patents, recipes, protocols, routines, and instruction manuals) and tacit knowledge or experience (often acquired through learning by doing in a dedicated process of imitation and repetition, which finds storage only in brains).

In another article focused on future tech, we see that of the top ten technology trends for the next ten years, three that stood atop are Datafication of the World – The Internet of Behaviours (IoB) – The volume of data generated across the globe reached over 79 zettabytes in 2021 and a forecast to hit 181 zettabytes by 2026. Data is a crucial enabler fueling most tech trends. Making sense of this huge amount of data and realizing its value through analytics and big data techniques have been referred to as the Internet of Behaviors (IoB) since 2012. Second is Artificial Intelligence and Machine Learning – Over 50% of human interaction with computers is estimated to be through AI-generated speech in the next two years. Due to this, consumers would expect businesses to cater to their needs, especially for customer experience and disservice, on a much faster basis. Machine vision, natural language processing, speech and gesture recognition (including emotions), pattern recognition, real-time AI, and others will increase by 2031. The third is Edge Computing – A distributed computing paradigm – Two tech trends, Edge Computing, and Distributed Computing, are distinct yet related and will move closer in the coming years. Computer processing power and the use of the industrial internet are increasing, but their physical size is shrinking daily. This has made computing at the edge and multi-cloud infrastructure a part of distributed computing. Decentralized computing has several advantages, from data security and privacy to lower power and bandwidth requirements to enabling near real-time processing and decision-making. In the coming years of hyper-automation and interconnectedness, Edge Computing would provide an effective means to reduce the amount of data transmitted with better results.

Nonetheless, all three aforementioned top trends cannot survive without electricity as it plays a huge part in our everyday lives. China’s electric power industry is the world’s largest electricity producer, passing the United States in 2011 after rapid growth since the early 1990s. In 2019, China produced more electricity than the next three countries (U.S., India, and Russia) combined. Wonder why they stand tall at the second position next to the United States in GDP? Our daily routines rely heavily on electricity at home, school, the local shopping center, or our workplace. From waking up in the morning to hitting the pillow at night, our daily life depends on electricity. We must now look at how tech comes into all of these.

As we delve into what technology means in economics, it is anything that helps us produce things faster, better, or cheaper. When you think of technology, there is a good chance you think of physical things like big machines or fast computers. But when economists talk about technology, they think more broadly about new ways of doing things. In economics, it is widely accepted that technology is the key driver of the economic growth of countries, regions, and cities. Technological progress allows for the more efficient production of more and better goods and services, which prosperity depends on. American companies significantly contribute to China’s high-tech manufacturing (and exports). Note that the parameters here are gigantic: in 2020, China produced 250 million computers, 25 million cars, and 1.5 billion smartphones – the connection with their huge electricity generation becomes apparent.

As the second indicator of economic growth, technological advances are the whole system of information, organization, and techniques required in the production processes. With the help of technology, it is possible to obtain more outputs using the same quantity of inputs in any production process. Technology can help the economy through direct job creation, contribution to GDP growth, the emergence of new services and industries, workforce transformation, and business innovation. Also, improving energy efficiency can lower individual utility bills, create jobs, and help stabilize electricity prices and volatility.

A low-hanging approach, technology transfer is critical to the success of Africa and remains important for a country like Nigeria to address electricity issues. Technology transfer can be done between universities, businesses, and governments to share skills, knowledge, technologies, manufacturing methods, and more. This form of knowledge sharing helps ensure that scientific and technological developments are available to a wider range of users who can help develop them. And we must forge ahead with technology transfer as we address future changes.

In conclusion, technology will change the world in the next ten years, including machine vision, language processing, speech and gesture recognition, pattern recognition, real-time AI, Embedded AI or ML, etc. And a good mastery of technology for economic development must rest on a growing supply of electricity, preferably through alternative green sources for a cleaner society.

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