Disrupting Africa: Riding the wave of the digital revolution

Disruptive innovation is transforming Africa’s economic potential

Disruptive innovation is transforming Africa’s economic potential, creating new target markets and unprecedented consumer choice. Capitalising on these potential opportunities demands a complete rethink of customer engagement and business development strategies. So how can your business ride the wave?

Unconstrained by legacy

Africa has far less legacy to get in the way than in other regions, creating a clean sheet upon which companies can develop their own distinctive business models. We see this in the speed that many markets are expanding. We also see it in the blurring of industry boundaries – the coming together of renewable energy, mobile payment and consumer finance is a clear case in point.

The power and potential of disruption

Technological disruption is transforming markets and societies across Africa in ways that wouldn’t have been possible even five years ago. And this opens up huge and still largely untapped commercial potential for domestic and international businesses.

From the demographic dividend of a young and rapidly expanding population to an increasingly affluent and aspirational middle class, Africa has the potential to become a new powerhouse of production and consumption in the 21st century, just as Asia was able to do in the late 20th.

Implications for businesses and policymakers

Drawing on our market experience and wide-ranging market analysis, we believe that there are five fundamental priorities for mainstream businesses, disruptors and policymakers:

Mainstream businesses

  1. Disruption isn’t just a tech opportunity but opens up opportunity for further commercial potential through development of the relevant infrastructure
  2. Partnerships with Africa’s growing tech hubs and ‘technopreneurs’ can provide access to innovation 
  3. Broaden your outlook to include Africa's emerging consumer class
  4. Keep a disruptive mindset – get to market quickly and be prepared to fail but learn and adapt
  5. Think differently about your workforce: a disrupted economy demands people who are creative, collaborative and ready to embrace change

Disruptors

  1. One size fits none in Africa – models can’t necessarily be lifted directly from one country and replicated in another
  2. Look beyond technological innovation to ensure the business model and customer relevance
  3. Think about where you fit in and what gaps you can fill in the existing markets
  4. Think scale and look how to build up growth capacity and market reach before you outgrow your platforms
  5. Expect resistance from vested interests and look at partnership as an initial option

Policymakers

  1. Embrace change and technological disruption as an opportunity
  2. Improve data quality and share to target investment and improve efficiency of public services
  3. Leapfrog developments elsewhere
  4. Put agriculture at the forefront of development, to boost yields and move up the value chain
  5. Foster greater transparency and trust through digital connectivity

We discuss six main ways in which businesses, disruptors and policymakers can capitalise on the potential of disruptive technology in Africa

1. Driving efficiency in business and public service

Boosting connectivity through increasing access and affordability is essential for disruptive development in Africa. Connectivity links consumers to businesses but also enables innovators to share ideas and seek funding and advice through the shared economy.

While mobile connectivity is well-advanced across Africa, internet availability lags behind. Less than 30% of African people have access to mobile broadband (compared to 43% in Asia) and only 15% have internet at home.

2. Strengthening trust and combatting corruption

Blockchain is emerging as a key tool in stamping out corruption and waste, particularly in the public sector. Blockchain is already being used in Africa to improve traceability in the diamond trade, and has the potential for many other applications including combatting tax avoidance, avoiding land registry disputes and providing greater transparency of public spending.

3. Improving market access and ease of doing business

Nigeria’s experience highlights the opportunities and challenges facing companies in Africa’s e-commerce sector. Nigeria is Africa’s largest market, both by size of GDP and population and with an estimated two thirds of Nigeria’s internet users having shopped online at least once, there is an e-customer base of almost 60 million Nigerians. Drone technology and 3D printing have also helped Africa to bypass infrastructure challenges and improve access to markets, previously unreachable.

4. Healthcare and crisis prevention

Disruptive technology is helping to overcome the traditional barriers of distance and limited access to healthcare. One example is Peek, a portable eye examination kit which lets users carry out eye exams by taking high quality retinal images with their mobile phone. Another combines big data and drone technology to avert potential epidemics through early detection and tracking.

5. Education, innovation and job creation

From Cape Town up to the ‘Silicon Savannah’ of East Africa, more than 100 tech hubs have been set up across Africa over the past decade to help foster home grown innovation. Many hubs focus on supporting social enterprises that are developing solutions to social problems. 

Technology has also been transforming teaching and training in Africa, through delivering educational content on mobile and online channels.

6. Bringing the informal sector into the mainstream economy

Mobile connectivity brings financial inclusion by enabling banks and telecoms providers to reach out to previously unbanked customers with low cost accessible services.

Through the success of the M-PESA payments platform, Kenya has one of the highest rates of inclusion in Africa, yet comparable platforms in other countries have found the going harder.

Contact us

Joel Segal
Africa Business Group Chair
Tel: +44 (0) 20 7804 1161
Email

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