central bank of kenya the technical university of kenya ( tuk ) 1 international tuk - sbms international conference st rethinking economic and business sustainability in disruptive times keynote address by dr. patrick njoroge governor, central bank of kenya thursday, november 25, 2021 as prepared for delivery good morning! i am pleased to join you at the inaugural technical university of kenya ( tuk ), school of business and management studies international conference. let me at the outset express my gratitude for the invite. the theme of the conference — rethinking economic and business sustainaibility in disruptive times — is timely, as we reflect on the challenges and opportunities that the coronavirus ( covid - 19 ) pandemic has brought to the fore. importantly, how will governments and businesses build on the lessons from the pandemic, and thereby enhance their agility to grow and thrive in a dynamic environment? i note the wide array of papers to be presented over the next two days, that will enrich the outcomes of the conference. the pandemic has upended lives and livelihoods while fundamentally changing enonomies and businesses. in kenya, a robust response from the government and private sector has served us well in containing the pandemic and ensuring business continuity. the economy is now on a steady recovery path, while the financial sector has been resilient in supporting businesses and households. we must however remain vigilant as covid is an enemy that attacks with stealth, with devastating consequences. tellingly, we have seen in recent weeks a resurgence of the virus in europe and parts of the united states, inspite of their high rates of vaccination against covid - 19. coming back to the theme of the conference, what has changed over the last one and a half years with the pandemic? and how do we rethink economic and business sustainability in disruptive times? in venturing to answer these questions, i will first highlight three recent trends in the business landscape. first, is the dominance of bigtechs. the pandemic has been characterized by accelerated digitization that enabled keeping the lights on for essential services including finance, education and health. digital payment rails for instance in kenya, rwanda, ghana and other african countries were a critical platform for official and personal transfers to the vulnerable segments of our population. more broadly, in the wake of covid - 19 containment measures, global technology platforms ( bigtechs ) offering information

technology, e - commerce, entertainment and other services have increased their reach and influence during the pandemic. globally, microsoft, google, meta ( formely facebook ), amazon and apple are the face of bigtechs. but beyond the united states, alibaba and tencent in china, mercado libre ( online market ) in latin america, ride - hailing services grub and gojek in south east asia, and mobile phone financial services firms in africa are increasingly exhibiting the characteristics of bigtechs though on a more regional scale. the global bigtechs are now estimated at 20 percent of the market capitalization on the new york stock exchange. to paint the picture more vividly, apple took 42 years to reach a market capitalization of us $ 1 trillion and 2 years to hit us $ 2 trillion. shockingly, all of the second trillion in valuation came in just 21 weeks to august 2020! the bigtechs have far and away displaced the traditional bluechips companies in manufacturing and aviation such as general electric and boeing in their dominance. second, is the proliferation of technology and innovations. from mobile banking to cloud computing, artificial intelligence to blockchain technology, internet of things, and robotics. all these developments herald significant opportunities to re - engineer the operations of governments and business and transform lives and livelihoods. indeed, we are at the cusp of the fourth industrial revolution, whose transformative powers are already evident in the financial sector, and will transform the way we live, work, and relate to one another. in the words of professor klaus schwab, who popularized this label : “ it is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. ” some of these technologies, such as artificial intelligence ( ai ) present significant opportunities to address some of our most pressing problems on the continent. for instance, despite micro, small and medium enterprises ( msmes ) being the engines of our economies, access to credit remains a key challenge. this in part arises from lack of traditional collateral such as title deeds used by financial institutions to secure credit facilities. with the proliferation of digital footprints, ai can be used to generate credit histories of msmes. these credit histories can then be used to appraise and appropriately price credit for msmes that would otherwise be excluded from accessing credit. the potential of ai extends to other critical areas including retail, advertising, manufacturing and health. but these