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2017: Entrepreneurship and Innovation – How Africa Can Compete

UPDATED June 19, 2019 02:42 pm .


Francis Cordor
June 19, 2019 02:42 pm

We’ve heard a lot about emerging nations in recent years, but what about an emerging continent: Africa? Indeed, the entire continent has tremendous potential, but can Africa compete with the rest of the world? Countries as diverse as Switzerland, Singapore, the United States, Germany, and China are among the most competitive on the planet. Meanwhile, Africa continues to struggle with the basics.

According to the World Economic Forum’s 2016-2017 Global Competitiveness Report’s ranking of countries based on their competitiveness, only two sub-Sahara African countries, Mauritius (45) and South Africa (47), made the top 50. Down at the bottom of the list, you’ll find the least competitive countries in the world – with the vast majority of them being African countries like Benin (124), Mali (125), Zimbabwe (126), Nigeria (127), Madagascar (128), the Democratic Republic of the Congo (129), Liberia (131), Sierra Leone (132), Mozambique (133), Malawi (134), Burundi (135), Chad (136), and Mauritania (137).

While it’s disheartening to see African countries down at the bottom of the list, the World Economic Forum also notes that we’re in what it calls the “Fourth Industrial Revolution,” which brings both opportunity and an accelerated speed of change.

The World Economic Forum describes the four industrial revolutions as:

  • First Industrial Revolution – Started in 1784 with steam, water and mechanical production equipment.
  • Second Industrial Revolution – Started in 1870 with the division of labor, electricity and mass production.
  • Third Industrial Revolution – Started in 1969 with electronics, IT, and automated production.
  • Fourth Industrial Revolution – Started in the middle of the last century with the fusion of technologies that blur the lines between physical, digital, and biological spheres.

The report says:

Leveraging the opportunities of the Fourth Industrial Revolution will require not only businesses willing and able to innovate, but also sound institutions, both public and private; basic infrastructure, health, and education; macroeconomic stability; and well-functioning labor, financial, and human capital markets.

The report also identifies 12 pillars that are essential in competitiveness:

  • Institutions
  • Infrastructure
  • Macro-economic environment
  • Health and primary education
  • Higher education and training
  • Goods market efficiency
  • Labor market efficiency
  • Financial market development
  • Technological readiness
  • Market size
  • Business sophistication
  • Innovation

Some African countries are doing well in some of these pillars. Botswana, for example, has a well-developed macro-economic environment while Rwanda scored well for both institutions and labor market efficiency. Meanwhile, governments across the continent are working on initiatives to strengthen these pillars within their countries.

However, one pillar is absent from the list, and one we believe can help Africa compete: entrepreneurship. Entrepreneurship is already helping to power African economies. With entrepreneurship also comes innovation, one of the drivers of competitiveness.

Entrepreneurship in Africa

In 2015, Nigerian billionaire and investor, Tony O. Elumelu, gave a commencement speech at Georgetown University where he shared his thoughts on entrepreneur-led development and African entrepreneurs. First, he spoke about development from an African perspective and how it differs from the American perspective which has a lot to do with homeland security.

He said that from the African perspective, development is…

  • a matter of realizing our potential and making the progress that we know is humanly possible because others have gotten there;
  • a matter of dignity and self-reliance;
  • a matter of creating the opportunities that will empower individuals and communities; and
  • of course, it means the beginning of the end of aid.

He also said that many African entrepreneurs are currently running home-grown businesses. As such, they have deep insights into local consumer demand, can spot gaps in the market, and can tap into strong networks. Not only that, these entrepreneurs often “exhibit a burning drive to create innovative, often disruptive, solutions to complex challenges.”

Realizing potential, making progress, dignity and self-reliance, empowering individuals and communities, and ultimately ending aid, are all excellent reasons to foster entrepreneurship and innovation in Africa.

The Tony Elumelu Foundation’s $100 million entrepreneurship program is on a 10-year mission to identify and grow 10,000 African entrepreneurs, create 1 million jobs, and add $10 billion in annual revenue across Africa.

Tony Elumelu calls this “Africapitalism.” Each job created translates into the opportunity to pull a family out of poverty for good; a wider tax revenue base for governments; and improved social stability because minds are engaged. Elumelu suggests that business development is not the sole responsibility of government; rather it comes down to individuals behind companies. It comes down to successful entrepreneurs replicating their success in others. He believes that the entrepreneurship model for Africa is the answer to its previous intractable problems. It can empower individuals and “harness the power of innovation, personal initiative, hard work, and collective market.”

It’s important to note just how young Africa’s population is. More than 40 percent of Africa’s working population is between 15 and 24 years old. Africa is the youngest continent in the world, a potential advantage as the rest of the world ages. For example, World Atlas lists Japan, Italy, Greece, Germany, and Portugal as the countries with the highest percentages of elderly inhabitants. Japan and Germany are both among the top 10 most competitive countries.

CNN noted the following trends in its Africa’s Surprising Future article:

  • Africa’s population is expected to increase from 1 billion today to more than 4 billion by the end of the century.
  • Within the next 35 years, Africa is expected to be home to 40 percent of the world’s children.
  • Women and girls are playing an important role in fueling economic and social development. In fact, in Uganda, Namibia, and other sub-Saharan regions, female entrepreneurial activity is nearly equal to that of their male counterparts.

At the same time, access to mobile technology is on the rise, as are initiatives to innovate in the technology sector. For example, Ghana’s Ashesi University added an engineering major in 2014 with a goal of achieving gender parity. According to the Clinton Foundation, this program will prepare female students to address some of Africa’s most pressing problems with engineering solutions.

Meanwhile, many young African entrepreneurs recognize that accessing financing for their projects and startups won’t be easy. If they’re going to make it, they’re going to have to make it on their own. In other words, they’re going to have to bootstrap it. This concept is not new to Africans; it’s a way of life. This ability to start and run a business with minimal financing could serve as a competitive advantage as Africa continues to find its place on the international stage.

Technology, Innovation, and the Rapid Speed of Acceleration

The introduction of mobile phones in Africa brought tremendous change to the continent and is an example of how transformative the Fourth Industrial Revolution can be – and how fast change can arrive. Landlines are virtually nonexistent now, while mobile phones have proliferated. Mobile banking services and wireless Internet access are now in the hands of the general public, bringing the potential for major business and lifestyle changes. What other innovations are in store for Africa or by Africans?

 Africa is the most youthful continent on the planet. While the powers that be work on shoring up Africa’s institutions, infrastructure, macro-economic environments, health and education, higher education and training, goods and labor market efficiencies, financial markets, and technological readiness, it’s up to the business community to become more sophisticated and innovative.

Government and business alike would do Africa a huge service by encouraging entrepreneurship and innovation to help equip our young, future leaders with the knowledge, tools, and resources required to take Africa down a path of self-reliance and empowerment. The youth of Africa hold its future in their hands; they are better equipped with technology than ever before, and they are ready and eager.

It’s a tall order, but if Africa can execute all of the above, it will be able to compete.

 

Featured Photo: Microsoft’s 4Afrika initiative was created in 2013 to train potential future employees and to place smart tech devices in the hands of young Africans. Greg Von Doersten — Microsoft








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