The future is suddenly much more unpredictable. COVID19 has thrown the world into a spin in a direction that no one could have predicted in 2019.
On Wednesday, 15 April, I was fortunate enough to attended a webinar hosted by the Stellenbosch Network and the Launchlab, entrepreneurship incubator at the University of Stellenbosch. The theme: Innovation in Africa: Challenges, Trends, and Outlook. The University of Stellenbosch Professor and Head of Future Studies, Prof. André Roux, gave his view on the future trends for business in Africa. Josh Romisher, CEO of the Launchlab, discussed the future of innovation and technology in Africa.
According to Prof. André Roux, Africa has a few factors in its favour: The population of Africa is young, growing, moving and getting more prosperous. He sums up the trends for business in Africa with the acronym FORESIGHT:
- Fourth Industrial Revolution: The Fourth Industrial Revolution will continue with more momentum throughout the next decade. The African Continent has its challenges with infrastructure that has a considerable impact on the implementation of technology. It just means that tech solutions look different for Africa than it may in the developed world.
- Oriental: What happens in China affects the rest of the world. In 2009 the number of middle-income consumers in Asia was projected to grow by 614% from 525 million in 2009 to 3228 million in 2030. This growth in comparison with the USA and Europe with almost no growth projected. The rise in the number of consumers in Asia will mean a staggering need for food and other resources, of which much will be sourced from Africa.
- Rewriting the Economic Paradigm: COVID19 ensured a severe revision of the script for this decade. This week published IMF growth outlook for the world for 2020 shows a contraction of 3%. The world economy is facing a recession that would be more severe than the great depression, although it will hopefully recover faster than it did then.
- Empowerment of individuals: Almost 90% of primary school-aged girls are in school. Literacy levels in Africa have improved, and access to communication is increasing daily.
- Saturation: Natural resources are running out because the numbers of consumers are growing. The challenge of surviving prosperity.
- Inequitable /divided world: Poverty internationally has decreased, but Africa is still the exception
- Grey: The rest of the world is ageing, but Africa has a young population. This trend could be in Africa’s favour since more and more people are getting to be economically active.
- Hotter and dryer: Although Africa is least responsible for global warming, ironically Africa will be affected to a more significant extent than other continents.
- Tele-everything: Everybody has a cell phone. Mobile money, e-libraries, and online learning provide opportunities.
Prof Roux feels that the two biggest challenges for Africa remain:
- Developing legitimate and effective leadership and governance and
- Generating sufficient and appropriate skills.
Josh talks about “What is innovation?” He divines innovation as “earned insight”. It is hard to innovate. Innovation is earned, over the course of time, as insight is gained. It takes thousands of hours to make a product scalable, affordable and workable.
The other important piece of the puzzle is ACTION. Josh does not see research such as publications, citations and patent applications as innovation. It only becomes innovation as the process of application turns those insights into action.
The challenge in Africa
- Infrastructure is non-existent meaning that the whole supply chain needs to be implemented and resolved. The fact that every person has a cellphone means the solutions for Africa is different than for the rest of the world.
- Coordination of diverse stakeholders requires strong leadership.
- Funding models are different for Africa. Risk is high, so investors are looking for high returns. The runway is much longer, so entrepreneurs need stamina.
Josh sees the following trends for Africa:
- Fintech gets funded most in Africa. Fintech businesses do not require the same infrastructure and support which other investments may require.
- Public-private partnerships. The private sector will step in to provide services that governments in developing countries offer.
- Solution sets of possible private partners for Africa: World-shapers are trying to work with Africa.
- The democratisation of entrepreneurship: more information is freely available online – you don’t need to obtain a qualification to be a successful entrepreneur
Where is innovation most needed? “Disruption has turned into a distraction. Valuation has overtaken values. Give the youth of South Africa a taste of entrepreneurship. “
What is the new normal? Not a v-shaped recovery. What do we need to do to sustain the planet? Josh motivates us to use this time in lockdown to decide what we think the new normal should look like.
Thank you to the Launchlab and the University of Stellenbosch for the opportunity they provided by hosting the webinar.