Here’s a challenge for you: Ask any man or woman on the street in London, New York, Sydney or Tokyo if significant innovations today are solely or predominantly the province of the world’s most advanced countries, especially the wealthiest of the G-20 nations?
Throughout much of modern times that has been true — in no small way because of the plentiful resources, both financial and human, possessed by those countries. But I bet it will come as a huge surprise to them to learn that, at present, emerging markets are increasingly the locus of significant innovations in the global economy. Perhaps most shocking will be when they learn that some sub-Saharan African countries are quickly becoming the leaders of the pack.
In fact, there are locales on the African continent where there are substantial technology incubators stimulating wholly new, home-grown inventions, not simply the adaptation or adoption of existing technologies. Who would a thought?
Unlike the advanced countries, in Africa and in other emerging markets the drive for innovation stems from the necessity to make up for inadequacies or in some cases the sheer absence of elements fundamental to economic development.
If you’re one of those rare people in the world that actually has been following Africa’s comparatively robust, steady economic progress over the last decade and a half — in contrast to its dismal, volatile growth over many decades before — this really should not come as much of a surprise. For the others of you, it’s largely understandable. After all, Africa is the “continent of economic misperceptions”.
What are some of the recent innovation breakthroughs in sub-Saharan Africa? Here are a few:
Certainly, the advent of mobile banking in Kenya in the last decade is among the best known home-grown inventions on the continent. Indeed, it epitomises how advances in technology emanating from emerging markets actually find their way to advanced country markets on later. This phenomenon is emblematic of how the traditional pattern embodied in the “product life cycle” is now being turned on its head.
Portable Solar Chargers
With unreliable or often absent electrical grids across much of Africa, locating let alone using mobile phone charging devices can be very difficult. Phoenix International, a venture-backed private company introduced “ReadySet”, which is a portable solar-powered mobile phone charger designed for the African market. The result is not only greater use of otherwise idle phones enabling users to engage in mobile banking or to more effectively time when to harvest crops by being able to keep track of daily fluctuations in prices in the market which is often in a distant location, but also more revenue coming to the phone companies.
Pest-Resistant Crop Storage Bags
West and Central African farmers teamed with agricultural researchers from Purdue University to develop a triple-layered air- and watertight storage bag, which provides extreme protection from moisture, pests, and high temperatures for a variety of crops. Consequently, farmers can time their plantings to favourable weather conditions and bring harvested crops to market at a time when prices are higher so as to generate greater income.
In addition, the bags help farmers reduce reliance on pesticides, making agricultural communities healthier overall and enhancing food security. And these bags are manufactured and distributed locally, creating a new labour-intensive industry.
Local educational software firms in East Africa, in collaboration with non-governmental organisations, have developed a new pay-per-view tablet that allows teachers to customise courses, pulling information from different textbooks and other reading material in an economical way. The changeable course materials help schools and their teachers overcome deficits in the educational infrastructure, and the pay-per-view rate results in less cost to students than that of a traditional textbook or laptop.
Drone Cargo and Healthcare service delivery
In advanced economies, drones are not yet in widespread use for product delivery. In parts of Africa, however, they’re already being used to overcome poor transportation networks, especially in the health care industry.
The United Parcel Service has established a joint venture with robotics maker Zipline to begin making up to 150 deliveries a day of transfusion blood to 21 rural clinics in western Rwanda. Drones are also being tested in Malawi to deliver blood samples of rural area infants for highly specialised HIV testing in the capital city’s major hospital.
Outside of the health care area, research is underway in Kenya on long distance unmanned drone cargo shipments as a run-up to a commercial robotic cargo drone test flight planned for 2017. At the same time, plans are underway to establish a “drone port” in Rwanda, with the goal of operating the first commercial cargo drones by 2020.
It’s hard to not celebrate the rise of sub-Saharan Africa’s new entrepreneur. Pick up any magazine focused on business in Africa and you’ll see for yourself the sheer number of stories devoted to innovation. You’ll sense the giddiness that runs through most of them.
In many respects this is warranted. After all, this is a region where just under half of its 800-plus million people lives in poverty and where the absolute number of the poor is increasing.
The giddiness, however, may be premature. For one, the process of economic development is everywhere notoriously complex and non-linear.
Moreover, in the case of Africa, the vast majority of its countries possess huge numbers of unemployed youth and adults. This poses significant risks for innovations that, by dint of their productivity-enhancing nature, result in reducing the need for labour.
That outcome, especially with respect social stability and poverty reduction could be worse than the status quo ante.
In short, African entrepreneurs may well find themselves on a knife edge.
To be sure, we all should be rooting for Africa’s success to capitalise on its newly found innovation path. Hopefully, this will help countries on the continent achieve a bona fide economic take-off, something that has been more than illusive for many decades.
But a lot depends on just how African businesses as well as policymakers actually harness this opportunity. In light of the initial conditions in most African countries today, in particular, the staggering unemployment rates, innovations whose dominant focus is on raising labour productivity and thus likely shedding workers, carry significant downside risks.
Should they be realised, Africa’s take-off could be yet again jeopardised.
The writer is CEO and Managing Partner of Proa Global Partners.