Want to spot innovation opportunities? – take a closer look at Africa

by Cecilia Magnergård on October 25, 2013

Lack of basics in life, war and scarcity is still the common picture when we in the west flip on our TV-news channels and open the daily newspapers. This is still true, but it is definitely not the only truth anymore. GDP in the Sub-Saharan African countries is blooming in a way that makes European economies blush with envy.

clip_image001In Africa the genuine and authentic innovation spurs; people are solving tangible problems because they have to, and when those individuals solve these specific problems – they do solve them for the rest of the world as well. Many companies do not, however, realize the potentials in Africa that are ripe at this very moment. Numerous do not contemplate the fact that the population in the Sub-Saharan African countries is expected to double from 856 million to 1.646 million in 2040 – what business opportunities does this bring? Just imagine the increased need for life science services, or the internet linking millions to a network of enormous possibilities.

Throughout the preceding decade a fundamental change has been brought to Sub-Saharan Africa, and the GDP has tripled.

Democratisation is gradually spreading, the inhabitants’ standard of living is increasing, and the large and growing middle class is demanding better and increased access to health care. Even though there are still great challenges ahead, Africa is flourishing! For instance, the ICT-sector in Sub-Saharan Africa had the globally fastest annual compounded growth rate – over 40 % last five years.

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In some aspects the key of becoming successful in Africa will mean a need to re-think business model completely. Although a number of suggestions on how to act upon these opportunities can be deliberated; the final and fundamental tactic will always include innovation.

clip_image005People that have read this blog before may have noticed hat I particularly enthuses by small stories of success, stories that I pleasurably share. It is fascinating to study M-Pesa, the African SMS-service that works on almost all mobile phones, which allows their customers to buy groceries, send payments and pay their bills through the phone. Today, M-Pesa is having over 15 million active customers, moving about $500-700 million every month; corresponding to 20% of Kenya’s GDP. The following video demonstrates their story further in depth.

The Story of M-Pesa

 

clip_image007Another example of companies that the rapid technology boom in Africa has given rise to is iCow, a simple but very useful telephone-application, helping farmers to look after their herds. Via test-messages and voice-mails the system, which is designed to run both low-end and high-end mobile phones, is giving the farmers valuable guidelines on cow breeding, animal nutrition, milk production efficiency and gestation meanwhile it is helping them to keep track on the oestrous stage of their cows. The messages cost about 10 Kenyan shillings each, € 0.09, and are sent to the customers continuously throughout the 365-day cow cycle.

There are however even more hands-on practical stories of success where the lack of fundamentals, in this case power, gives rise to fantastic products. At only an age of 14 the Malawi inventor William Kamkwamba built a windmill solely by spare parts and scrap in order to power his family’s home. The following TED-talk is a meeting with William Kamkwamba – the young man who gave the power of action a face!

William Kamkwamba–How I build a windmill

 

If you desire to understand and identify innovation and the opportunities it brings, take a closer look at Africa. It is currently in Africa the different faces of innovation spurs!

About Cecilia Magnergård :

Analyst with deep knowledge in Economic Strategy, Innovation Management and Business Developmed combined with a profound interest in complex problem solving and the global financial markets. She has an BSc in economics and a Master of Science with a major in Engineering and Management specialised in Economics of Innovation and Growth from the Royal Institute of Technology.

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